Proactive Investors UK - Patagonia Gold, Pan African Resources, Norseman Gold, Medusa Mining and Minera IRL among top 100 best performing gold stocks
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Thursday, 30 July 2009
China markets recover on expectation of measures to control lending
The Shanghai Stock Exchange rebounded from yesterday's falls gaining 1.69 percent. Turnover was down to RMB219.8bn from yesterday's record RMB296.9bn. Hong Kong also closed slightly up, at 0.5 percent, with a large drop in turnover from HK$101.8bn to HK$76.2bn. The Shenzhen Composite Index rose 1.11 percent. Taiwan's Taiex index dropped 0.8 percent.
Banks led the rises on continued speculation that the government will soon act to rein in bank lending. There were RMB7.4 trillion yuan of new loans in the first half of 2008, equivilent to about half of the country's GDP for the same period, prompting calls for greater controls.
Industrial & Commercial Bank of China (SH:601398, HK:1398) China's largest lender, rose 3.29 percent in Shanghai and 0.36 percent in Hong Kong. China Construction Bank (SH:601939, HK:0939) advanced 6.02 percent in Shanghai and 0.32 percent in Hong Kong. Bank of China (SH:601988, HK:3988) increased 3.81 percent in Shanghai and dropped 0.8 percent in Hong Kong.
IT and telecom shares also made broad gains today, riding an average of 5.5 percent. China Unicom (SH:600050, HK:0762) surged 9.57 percent in Shanghai and 0.54 percent in Hong Kong. Seven stocks all rose to the 10 percent trading cap in Shanghai, including: Beijing Teamsun Technology (SH:600410), China National Software & Service (SH:600536) and Shanghai Feilo (SH:600654).
Property led gains in Hong Kong. The Hang Seng Property Index added 1.3 percent. Beijing North Star Co. (HK:0588) rose 9.3 percent. China Properties Investment Holdings Ltd (HK:0736) rose 8.7 percent.
Legend Media signs three year advertising deal with Golfzone
Legend Media announced that it has signed a three-year advertising contract worth RMB5m (US$732,000) with Beijing Huifengzhou Investment Co., Ltd. for its Golfzone business, which offers reservation services at 200 golf courses accross China.
Golfzone has 80,000 membership subscriptions, has organized over 100 golf events and 28 stores. It originally started in 2003 as a chain stores for golf gear distribution.
BHP Billiton introduces new pricing mechanism for iron-ore
BHP Billiton is to sell a third of its 2009 iron-ore volume under a new pricing mechanism rather than the traditional annual term prices. The system will be a mix of quarterly negotiated pricing, spot market and index-based pricing.
China's steel industry is still in a deadlock over iron-ore negotiations as it demands biggers discounts cuts after Japanese and South Korean mills accepted a 33-percent cut for benchmark ore with Rio Tinto.
While some Chinese steel mills also accepted a temporary 33-percent price cut, the China Iron and Steel Association is playing for even better prices.
eFuture co-operates with Microsoft for China retail operating system
eFuture yesterday announced it has entered into a strategic relationship with Microsoft to provide a standardized POS-ERP system for retailers in China. This system will integrate Microsoft Windows Embedded POSReady 2009 into eFuture's POS-ERP Store Operation System.
The standardized POS-ERP system pairs eFuture's POS-ERP Store Operation System, which facilitates the flow of goods, orders, information and cash in-store, with the familiarity of Microsoft operating systems.
During the past three months, eFuture conducted a pilot program of the embedded solution with a retailer in Hebei Province. Based on the success of this pilot effort, eFuture will invite additional clients to join throughout the duration of the pilot program.
NF Energy in agreement with GE to co-operate on Chinese energy savings projects
China-focused NF Energy Saving Corp of America said it has signed a strategic cooperation agreement with GE Enterprise Development (Shanghai) Co Ltd, a subsidiary of US group GE (NYSE:GE), to jointly promote sustainable market development and to cooperate in energy savings projects in China.
NF Energy chairman and CEO Li Gang said: "It is definitely a win-win cooperation. The energy-saving market perspective is very strong and is supported by favorable Chinese government policies that promote and reward these types of projects."
Wednesday, 29 July 2009
Easyjet expects full year pre-tax profit of £25million to £50million
Shares in Easyjet climbed higher this morning after the company reported solid results for the third quarter of its financial year.
The no-frills airline recorded a 12% increase in revenues to £721million, boosted by a 10.9% increase in revenue per seat to £51.42, or 4.8% on a constant currency basis. Passengers carried also increased, by 2.9%, to 11.9 million with a 12% growth in passengers originating from mainlaind Europe.
The headline numbers were in contrast to figures released from rival RyanAir (RYA) last week, which reported a far larger increase in passenger's carried, but lower revenues per seat.
Easyjet benefited from its strong presence in a number of European airports, including London's Gatwick Airport and airports in Milan, Paris and Madrid.
Both RyanAir and Easyjet have often boasted about the strength of their balance sheets compared to most competitors, and today was no different. Easyjet reported cash and money market deposits of £962million and undrawn financing facilities of US$0.5billion
Looking ahead to the all important summer flight season, Easyjet said it had now sold 75% of available summer seats. Easyjet also issued guidance for the full year ended 30 September 2009,stating that it expected underlying pre-tax profits to be in the range of £25million to £50million.
Commenting on the results, Andy Harrison, easyJet Chief Executive said:
"This has been a resilient third quarter and our position has continued to strengthen as we made market share gains across Europe. easyJet is continuing to perform relatively well in tough trading conditions and we expect to be one of the few airlines to make a profit this year."
www.proactiveinvestors.co.uk
Cadbury reports solid interims and raises dividend 8 pct
Confectionery group Cadbury PLC (LSE: CBRY) said it has made good progress in the first half, with a strong chocolate performance and good growth in emerging markets more than offsetting a slow start in North America and continued softness in Europe, and it is raising its interim dividend 8 percent to 5.7 pence per share.
Revenue was up 13 percent at £2.767 billion, a 4 percent rise at constant currencies, generating an underlying pretax profit of £262 million, up from £212 million in the previous first half, a year-on-year rise of 24 percent and up 11 percent at constant currencies.
Chocolate sales saw a strong 10 percent growth over the last year’s performance, led by excellent market share gains in the UK and very good growth in emerging markets, particularly India and South Africa, Cadbury said.
CEO Todd Stitzer said: "Looking forward for the year as a whole, given the continuing economic uncertainty, we reconfirm our guidance to deliver revenue growth around the lower end of our 4-6 percent goal range. In addition, we now expect to deliver a full year margin increase of between 80-100 basis points in constant currency."
www.proactiveinvestors.co.uk
Revenue was up 13 percent at £2.767 billion, a 4 percent rise at constant currencies, generating an underlying pretax profit of £262 million, up from £212 million in the previous first half, a year-on-year rise of 24 percent and up 11 percent at constant currencies.
Chocolate sales saw a strong 10 percent growth over the last year’s performance, led by excellent market share gains in the UK and very good growth in emerging markets, particularly India and South Africa, Cadbury said.
CEO Todd Stitzer said: "Looking forward for the year as a whole, given the continuing economic uncertainty, we reconfirm our guidance to deliver revenue growth around the lower end of our 4-6 percent goal range. In addition, we now expect to deliver a full year margin increase of between 80-100 basis points in constant currency."
www.proactiveinvestors.co.uk
BG Group Q2 profits down 31%, won’t meet 2009 production target
Natural gas produced and FTSE 100 constituent BG Group (LSE: BG) released its half yearly report today, marking steep drops in profits and revenues as a result of the falling fuel prices this year.
Revenue for Q2 2009 was down 28% year on year form the equivalent period of 2008. The year on year decline for the first half amounted to £910 million, or 14%.
Net profit for Q2 was down to £513 million, marking a 31% year on year drop from Q2 2008. BG put the blame on sharp declines in oil and gas prices the industry has seen over the past year for the disappointing performance and said it would not meet the production target set for 2009.
The report highlighted some positive developments, including a 7% year on year increase in production for Q2 and an expected annualised hike in production of 6-7%. The company also entered into an alliance with EXCO Resources to develop shale gas fields in Louisiana and Texas and reached a 20 year agreement with the China National Offshore Oil Company (CNOOC) to sell 3.6 million tonnes of LNG annually from its Queensland Curtis LNG project.
BG also lifted the interim dividend 20% year on year.
The company said it expects further increased in production, which is projected to average 700,000 barrels of oil equivalent per day (boed) in Q4, but will still fall short of the target of 680,000 boed, reaching it over the 12 months to 31 March 2010, a quarter later than initially planned.
The not so impressive results were expected by the market as BG Group was roughly flat on LSE following the release of the report this morning.
James Halstead confident of meeting market expectations for the full year
James Halstead PLC (AIM: JHD) said market conditions have remained very challenging since it reported interim results at the end of March, but a decent performance of its overseas operations leads it to be fully confident of meeting market expectations for the full year.
In a pre-close trading update, the manufacturer and global supplier of commercial flooring said that in the UK, which represents around 40 percent of its sales, the last six months have seen a number of school, hospital and government PFI projects being delayed or deferred and there has been a slowdown in sales.
However, the group has continued to experience good growth in many overseas markets including Germany, its largest. Added to that the performance of its outsourced flooring products, positive exchange rates and overseas earnings, it means it is on track to meet market expectations for the year.
BHP settles prices for 53% of 2009 iron ore volumes
BHP Billiton (LSE: BLT) released as update on iron ore price negotiations, announcing it has come to terms with customers to sell 23% of iron ore volumes with significant discounts to the 2008 prices.
The discount for iron ore fines compared to the previous year will be 33%, while the discount for iron ore lump will amount to 44 percent. Another 30% of BHP’s iron ore volumes will be sold on a mix of quarterly negotiated pricing, spot market and index-based prices.
Chinese mills will be the main consumers of BHP’s iron ore. BHP is currently trying to settle contracts for 47% of iron ore volumes, still holding negotiations with customers that are trying to buy ore on better terms than those already agreed upon for 23% of the volumes.
The prices are similar to those agreed on by Rio Tinto with its Japanese, Taiwanese and South Korean customers this year.
The company noted the change in the pricing system in its statement.
“The Company believes that current settlements are indicative of continued progress towards transparent market pricing,” said BHP.
BHP’s stock went through a turbulent period last week after stating China’s build up of commodities inventory was almost complete, setting a mixed demand outlook for the year and simultaneously reporting a 10% decline in Q4 iron ore output.
BHP was down 2% on the news on LSE this morning.
Nautilus hires Fugro’s services for 2009 exploration programs
Mineral exploration company Nautilus Minerals Inc (TSX: NUS) said it has reached an agreement with Fugro to provide services for Nautilus’ 2009 programs in Papua New Guinea and the Solomon Islands.
The services provided by Fugro under the terms of the contract will include regional geophysical and geochemical surveys and target testing, which consists of detailed geophysical surveys, geological traversing and sampling of SMS prospects with a Remote Operated Vehicle.
The deal runs over a period of 124 days, beginning on 10 August 2009 with options for Nautilus to extend it by up to 98 days.
“Focusing on building our high grade SMS prospect inventory, we will apply exploration techniques which we have refined each year since 2006. This is the first time we have been supported by Fugro in our exploration effort and we look forward to building a relationship founded on its strong global track record in the mining and oil and gas sectors," said Nautilus CEO Stephen Rogers.
Nautilus is focusing its efforts on the projects in Papua New Guinea and the Solomon Islands after completing the second phase of its target generation program in Tonga in the beginning of the month. The company wholly owns the Bismark and Woodlark (Papua New Guinea) and Solomon Islands exploration licenses.
The statement did not disclose the financial terms of the agreement.
Nautilus dipped 1.8% on TSX today.
NF Energy in strategic cooperation with GE subsidiary for Chinese market
China-focused NF Energy Saving Corp of America (OTCBB: NFES) said it has signed a strategic cooperation agreement with GE Enterprise Development (Shanghai) Co Ltd, a subsidiary of US group GE (NYSE: GE), to jointly promote sustainable market development and to cooperate in energy savings projects in China.
NF Energy chairman and CEO Li Gang said: "It is definitely a win-win cooperation. The energy-saving market perspective is very strong and is supported by favorable Chinese government policies that promote and reward these types of projects."
Liberty discovers Co-Cu-Zn-Ag mineralization in OntarioLiberty discovers Co-Cu-Zn-Ag mineralization in Ontario
Canadian mineral exploration and development company Liberty Mines (TSX: LBE) today announced the discovery of cobalt-copper-zinc-silver mineralization near its McAra Lake project in Ontario.
The mineralized zone is located in Ray Township, just 9 kilometers north of Liberty’s McAra Lake Copper Cobalt project in Ontario, Canada. The mineralization was intersected during exploration diamond drilling in August 2008 and found to consist of veins with values of up to 1.27% Co and 6.23% Cu.
After geological mapping, prospecting and IP ground survey were positive, seven short diamind drill holes were drilled, also returning positive results.
Liberty hopes the strong results produced by the first round of drilling will carry on and treats the mineralization's proximity to McAra Lake as a positive signal.
"The nature of the mineralization and its similarity with McAra Lake lends itself to the realistic expectation that a main break with similar grades may be associated with those discovered," said William Randall, the supervisor of the project.
Hawthorne Gold says drilling at Taurus deposit so far exceeds expectations
Hawthorne Gold Corp (TSX-: HGC) said it results to date from drilling at the Taurus deposit in British Columbia have exceeded its expectations and have identified very promising grades close to surface.
Results from the first four of a total eight diamond drill holes of the Taurus zone drill program are confirming that higher grade zones, mineable by open pit method, may exist within the deposit.
Highlights of the results so far include hole TA09-001 intersecting 2.63 metres of 11,6 g/t of gold, and TA09-002 encountering 2.65 metres at 8.4 g/t and TA09-003 finding 1,93 metres at 9.2 g/t. Hole TA09-004 encountered gold at 20.6 g/t along a 1.93 metres strike length.
The Taurus deposit currently contains an NI 43-101 mineral inferred resource estimate of 1.06 million ounces of gold, 33.06 million tonnes grading 1.00 grams per ton.
“Based on the positive results, our exploration program in the Cassiar Gold Camp is focusing on Taurus during the month of August," commented Richard Barclay, president and CEO of Hawthorne.
Further assays from the remaining four holes have been received from the lab and are currently being reviewed with results expected to be announced shortly.
www.proactiveinvestors.comNortel gets Canadian and US court approvals to sell CDMA operations to Sweden’s Ericsson
Nortel Networks Corp (OTCBB: NRTLQ) said it has received court approval to sell its CDMA business and LTE Access assets to Sweden’s LM Ericsson for US$1.13 billion.
The Ontario Superior Court of Justice and the United States Bankruptcy Court for the District of Delaware approved the sale agreement with Ericsson which was announced at the weekend.
As part of this agreement, a minimum of 2,500 Nortel employees supporting the CDMA and LTE Access business will receive offers of employment from Ericsson. Completion of the sale is expected later this year.
Dragon Oil’s Dzheitune 28/136 well tests successfully at 3,291 bpd
Dragon Oil PLC (LSE: DGO) said the Dzheitune (Lam) 28/136 development well in the Kaspian Sea offshore Turkmenistan was completed on schedule and tested successfully, producing at a rate of 3.291 barrels of oil per day.
Rurther testing and optimisation is scheduled to take place over the coming weeks. The well is the third well to be completed from the refurbished Dzheitune (Lam) 28 platform.
The Iran Khazar jack-up rig has now skidded to slot 1 on Platform 28 where it has spudded the Dzheitune (Lam) 28/137 development well.
The platform-based Rig 40 is completing the Dzheitune (Lam) 13/135 development well with testing expected to be finalized within the next few days.
Chief executive Abdul Jaleel Al Khalifa commented: “We are due to announce the test results of the development well Dzheitune (Lam) 13/135 shortly. We remain committed to ensuring good progress of the drilling programme to meet our annual production growth targets for 2009-2011.www.proactiveinvestors.com
Penny Stock Chaser Reviews NavStar Technologies, Biocentric Energy Holdings & US Canadian Minerals
Every trading day PennyStockChaser.com sifts through thousands of stocks to identify those that are poised and ready to move up. Some of our recent picks includes: NVSR, BEHL and USCN. To receive more hot stock alerts, investors simply need to join our FREE newsletter service by visiting the following link: http://www.pennystockchaser.com/join-now/
NavStar Technologies, Inc. (PINKSHEETS: NVSR), a multinational firm focused on developing and commercializing asset tracking and monitoring devices for vehicles and high value cargo with specific geographic focus in Latin America.
NVSR was on our watch list on July 20st 2009 trading at 0.0045 and the next day NVSR opened at 0.006 and it’s been trading on huge volume for 5 days consecutively. Yesterday, the stock traded as high as 0.015 which is gain of 150% and closed at 0.0148
http://www.nasdaq.com/aspx/historical_quotes.aspx?symbol=NVSR&selected=NVSR 
Biocentric Energy Holdings, Inc. (pinksheets:BEHL) is dedicated to the development of new technologies as well as acquiring and fostering companies with innovative technologies designed to provide unique and effective green energy solutions for the 21st century. Along with the cultivation of important relationships and partnerships with synergistic entities, BioCentric Energy has devoted substantial time and effort in research and development in order to bring a range of innovative green alternatives to the marketplace.
We alerted BEHL to our members on June 4th 2009 at 0.0085 and yesterday the stock traded as high as 0.0385 which is about 350% gain and closed at 0.0365.
http://www.nasdaq.com/aspx/historical_quotes.aspx?symbol=BEHL&selected=BEHL
US Canadian Minerals Inc. (OTCBB:USCN) is a junior mining and exploration company whose business strategy is to grow shareholder value through acquisition, exploration and exploitation of near term production precious metal properties in North and South America. We alerted to our members USCN at 0.06 on May 25th 2009 and the next day it opened at 0.25 and yesterday it closed at 0.88.
http://www.nasdaq.com/aspx/historical_quotes.aspx?symbol=USCN&selected=USCN
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White Canyon Uranium progresses tolling agreement with Denison Mines - and Toronto listing by Andrew McCrea
White Canyon Uranium (ASX: WCU) has concluded a June 2009 quarter, achieving a significant milestone.
The US federal Bureau of Land Management (“BLM”) delivered the final approvals for the Company’s Mine Permit for the development of the Daneros Mine in Utah, USA in May 2009.
This was the first new uranium mine permit issued in Utah for 30 years and culminated 15 months of work by White Canyon Uranium since listing on the ASX in March 2008.
The Daneros uranium deposit is located in close proximity to major past producing uranium mines of the Red Canyon mining area, near Blanding, Utah. The deposit is 100 km by established roads from the White Mesa Uranium Mill owned by Denison Mines (TSX: DML) at Blanding.
Underground development commenced immediately on receipt of the BLM approvals. Site earthworks were commenced prior to the transport of infrastructure and the decline portals were surveyed and mining commenced within a week of receiving the approvals.
Mining Progress
To date, the portals were completed and the declines had advanced 30m. Daneros will utilise a twin decline development with an access decline and a ventilation decline. Ventilation fans and generator are in place and operational ahead of requirement.
The site office is in place and the workshops and utility buildings are available awaiting the construction of pads for their erection. The water bore was completed and the infrastructure for water storage is in place.
This progress is within the company's budgeted schedule and the expectation is that the declines will be completed at the end of the following quarter.
WCU has re-iterated that underground development and mine production will be achieved within current cash reserves, which at the end of the quarter stood at $4.5 million.
Processing Options
There are solid options for WCU for sale of output from the Daneros Mine. Given proximity to Denison's White Mesa Uranium Mill, WCU can sell production into the Denison Ore Buying Schedule already in operation and open to third parties at the White Mesa Mill in nearby Blanding.
A toll treatment agreement with Denison is another option. This would enable WCU to pay a contract rate to have Denison process ore from the Daneros Mine and WCU would receive the U3O8 produced at the end of the process.
WCU could then negotiate an offtake agreement or long term contract for the sale of product to achieve higher returns for shareholders.
WCU has indicated Denison has agreed to draw up a Toll Treating Agreement. The Company is in contact with Denison and the arrangement is progressing.
Toronto Stock Exchange listing
A listing on the TSX Venture Exchange is also progressing. A new non-executive director Greg Burns, based in Vancouver, has been appointed effective 1 August 2009. He will assist with the listing in Toronto.
Fat Prophets upgrades ANZ Bank to "Buy" status by Fat Prophets
During the lead up to the GFC we had a long held negative view on the banks and consumer discretionary sectors. This was borne from the credit bubble that developed primarily from Greenspan’s excessively loose post 9/11 monetary policy.
Corporate and personal debt levels were becoming too cumbersome and the banks were simply failing to account for these risks in their lending practices.
While our negative view on the banks was subsequently justified, there was no opportunity for backslapping as the crisis eventually engulfed practically all areas of the market.
Now though, as we look ahead to the prospect of economic recovery we view the long-term outlook for the banks as considerably more favourable. We are therefore moving to upgrade our previous Traffic Light status on ANZ Banking Group (ASX: ANZ), the terrier of the big four, to a buy.
At this point in the bad debt cycle, a decent capital buffer is one of the more important considerations for the banks.
Fresh from gorging to the fullest extent possible on retail investors’ applications for its share purchase plan, ANZ certainly isn’t wanting for capital.
The question is of course, does their hunger for extra cash imply worse than expected future bad debt write-offs, additional acquisitions or simply prudent management? In reality, all three are likely to have factored in the decision.
As we discussed in our last review (FAT427), ANZ raised $2.5 billion from institutional investors back in May. Management stated at that time that they would limit the retail component of the capital raising to a maximum of $350 million. In the event, the flood of retail investors’ dollars proved too much to resist and the bank opted instead to take the lot.
This added a further $2.2 billion to ANZ’s war chest and took its tier 1 capital ratio to a mighty 9.5%.
Management of course isn’t raising capital simply to sit on it. Rather, ANZ is set to deploy upwards of $1 billion to acquire certain of Royal Bank of Scotland’s Asian assets. Even after doing so though, the bank’s tier 1 capital will remain in comfortable territory at probably more than 8%.
Given the poor performance of the bank’s loan book relative to the sector so far, however, the capital buffer will almost certainly face some erosion in the year ahead.
Australia’s banks have suffered from exposure to a considerable volume of large-scale corporate failures since the credit crisis began in mid-2007. ANZ however has absorbed a disproportionately large share of the losses. The bank has the dubious honour of holding the largest exposure of the big four to many of the most high profile collapses.
These include the likes of Opes Prime, ABC Learning, Babcock and Brown, Lehman Brothers, Timbercorp and Great Southern.
The big name failures are probably complete with the bad debt cycle now moving through the small to medium sized businesses (SMEs). Even so, extrapolating ANZ’s comparatively poor lending practices to the SME sector would suggest that the bank is in for further pain as the loan-loss cycle climbs to its peak.
The extent of the loan loss cycle and further write-offs for the banks is contingent on one’s view of the depth of recession. As we have discussed in the past, our view is that Australia will suffer only a shallow recession.
Unemployment will find a lower peak than many suggest, potentially less than 8%, and Australian property will avoid a US/UK style meltdown.
If we’re correct on this, then the banks and specifically ANZ may in fact be adequately capitalised. Furthermore, the blame for ANZ’s poor corporate lending track record rests with Mike Smith’s predecessor, John McFarlane. We therefore do not view the performance of the bank’s previous lending as indicative of their likely future performance.
This story continues in the Fat Prophets Members area. To get the complete report, join Fat Prophets today!
To access more complimentary research reports from Fat Prophets click here.ValiRx cancer compound patent accepted by Australian regulator
ValiRx PLC said it has received acceptance from the Australian Patent Office for the patent application relating to its lead cancer compound, VAL 101, which is derived from the GeneICE technology platform for gene silencing.
Provided there is no opposition the full patent is anticipated to be issued in due course, the group said.
ValiRx holds the rights to GeneICE through its wholly owned subsidiary, ValiPharma Ltd, which has an exclusive worldwide license agreement with Imperial College Innovations Ltd.
GeneICE compounds have the potential to freeze the development and growth of cancerous cells and also have potential major applications in inflammatory disease and inherited genetic conditions.
Previous results have shown VAL 101's efficacy in several cell-based cancer models, including prostate, ovarian and pancreatic cancers in vitro.
CogState is cash flow positive to June 30, strong sales pipeline ahead
Cognitive testing products provider, CogState (ASX:CGS) has reported positive cash flows for the year to 30 June 2009.
It has been a banner six months for the company, as the CGS share price has almost doubled, to 28 cents.
Cash reserves at 30 June 2009 totalled $3.0 million. This is an increase of $2.0 million from the $1.0 million of cash reserves held at 30 June 2008.
The increase in cash reserves was driven by a net cash inflow from operations of $1.1 million along with the proceeds of the capital raising undertaken by CogState in July and August 2008.
CogState specialises in the development and commercialisation of rapid, computerised tests of cognition (brain function).
The tests are sold to pharmaceutical, biotechnology, nutraceutical and functional food companies to quantify the effect of drugs or other interventions on human subjects participating in clinical trials.
Since sales into the clinical trials market began in 2004, CogState has secured agreements with organisations including Pfizer, AstraZeneca, GlaxoSmithKline, Merck, Johnson & Johnson, Novartis, Lundbeck, Dainippon Sumitomo, Otsuka, Servier,
CogState has no external debt. At 30 June 2009, Net Assets totalled $4.9 million, an increase of $3.0 million from the $1.9 million Net Assets at 30 June 2008.
The business turnaround began for Cogstate in the June 2008 quarter and has continued throughout the 2009 financial year.
CogState continues to experience positive trading conditions, with more than $4 million of sales proposals currently outstanding.
www.proactiveinvestors.com.auTNG reports scoping study at Mount Peake Vanadium Project has positive economics
TNG's (ASX: TNG) initial scoping study at Mount Peake Vanadium Project in the Northern Territory has demonstrated positive project viability.
The initial independent study by Snowden considered the viability of an open pit mining operation study using a marginal cut-off of 0.22 % vanadium pentoxide (V2O5), conservative V2O5 price of US$8/lb, and processing of 5mt per year, with an estimated capital cost of between $400 – 500m.
Despite the high capital cost, the results demonstrated viable project economics given the parameters and assumptions of this initial study.
Metallurgical cost and recovery estimates for the Study were supplied by Mineral Engineering Technical Services (METS), who are carrying out metallurgical testwork to optimise recovery and grade on the Mount Peake ore.
The capital cost has been estimated based on information supplied by METS who are undertaking the metallurgical test work. This work is ongoing and the final processing route not yet been established.
TNG said is was encouraged by the results of the initial Scoping Study, particularly as this optimisation has been based on TNG’s maiden Inferred Mineral Resource of 107 million tonnes at a grade of 0.32% V2O5, 5.9% TiO2, 29% Fe, estimated from its first round of drilling on the project.
A significant portion of the Mount Peake magnetic anomaly remains untested and offers the potential to increase the initial resource and further enhance the project’s economics.
TNG is pleased will now consider the optimum route to progress the Mount Peake Project to the next phase, including the possibility of introducing a joint venture partner to fund ongoing resource drilling and project feasibility work.
www.proactiveinvestors.com.auFrontier Resources looks to two gold deposits in Tasmania for potential development
Australian and German stock exchange listed, Frontier Resources (ASX: FNT) has inked a maiden inferred JORC Resource for the gold-bismuth Stormont Deposit in central-northern Tasmania, Australia.
The Inferred Resource for the ‘high grade’ zone at Stormont contains 13,430 ounces gold plus 27.7 tonnes bismuth, plus 10,340 ounces silver, within 91,400 tonnes of mineralised rock grading 4.57g/t gold, 0.30% bismuth and 3.52g/t silver (1.5g/t gold cut-off grade).
What is interesting about Frontier, is that Managing Director, Peter McNeil has significant gold development experience - including the Lihir gold deposit (+45 million ounces) in Papua New Guinea on the "Ring of Fire" and the Sunrise Dam Mine in Western Australia (+16 million ounces of gold).
Frontier is also exploring for and developing mineral deposits in the highly mineralised Pacific ‘Rim of Fire’ region in Papua New Guinea, as well as the highly prospective Dolcoath Granite and Mt Read Volcanics of Tasmania.
Stormont is a skarn-style stratiform deposit located on or very near surface and ranges in stratigraphic thickness between 10m and 15m.
The Stormont Deposit is located 6.5km west of Frontier’s Narrawa precious - base metal Deposit.
A conceptual Mining Study is now being updated, utilising long term projected metal prices and it will recommend possible development paths forward.
Frontier Resources Managing Director, Peter McNeil said "the resource is currently modest in size with a respectable grade and Frontier hope to combine it with the Company’s resource at the nearby Narrawa Deposit and create a potentially economic project for near-term development."
The Indicated and Inferred Resource at Narrawa contains 23,550 ounces of gold equivalent grading 3.5 g/t gold equivalent. This consists of 14,125 ounces of gold, plus 131,300 ounces of silver, 2,765 tonnes of lead and 2,335 tonnes of zinc (0.5g/t gold cut-off grade).
Exploration will likely be undertaken soon at Frontier's high-grade gold Bulago EL in the Highlands of PNG. Frontier retains 4 other ELs in PNG that are highly prospective for gold and copper-gold-molybdenum.
www.proactiveinvestors.com.auIndago Resources identifies high grade gold with Barrick in Tanzania
Tanzanian gold explorer, Indago Resources (ASX: IDG) has identified further broad gold mineralisation at the Nyanzaga Project from infill drilling.
Indago owns a 49% interest in the Nyanzaga Project in Joint Venture with Barrick Exploration Africa Ltd and has the ability to earn up to 68% on completing a Bankable Feasibility Study. Indago is Project Manager.
A total of 22 RC holes have been drilled with assay results received from the first 15 holes.
Infill drilling adjoining previously announced results has defined broad mineralization including 62m at 4.53 g/t from 3 metres and 62 metres at 2.89 g/t from 37 metres. Drilling has also high grade zones including 16 metres at 10.45 g/t from 144 metres.
Extension drilling shows continuation of mineralization to north east with 4 metres at 2.08 g/t from 56 metres and 6 metres at 6.6 g/t from 68 metres.
In work for the Pre-Feasibility Study, Indago is aiming to increase the available ounces in, and surrounding, the conceptual Tusker open cut mining operation defined in the Nyanzaga Scoping Study and increase the resource estimation confidence under JORC guidelines.
www.proactiveinvestors.com.auToro Energy wraps up successful March quarter, progressing key uranium optimisation study
The March 2009 quarter was also a busy one for uranium developer, Toro Energy (ASX: TOE).
There was a substantial increase of 31% in the grade of Wiluna Uranium resource, that will enhance project economics.
Resource infill and extension drilling at Wiluna in Western Australia (Centipede and Lake Way deposite) resulted in the grade increase from 419 parts per million (ppm) U3O8 to 548ppm U3O8. This was significant, as the tonnage of ore requiring processing for the same uranium output reduces by 20%.
Toro has received considerable interest in its Australian uranium assets from Chinese and Japanese investment groups, in line with the nuclear power industry development and expansion in those two countries.
Discussions are continuing regarding funding options for Toro for future project development work.
Wiluna’s new total resource for the quarter has increased to 20.21 million tonnes at 548ppm U3O8 for 11,070 tonnes (24.4 million pounds) of contained uranium oxide compared to the previously reported resource of 25.83 million tonnes @ 419ppm U3O8 for 10,835 tonnes (23.89 million pounds), both at 200ppm cut-off grade.
Metallurgical testing on Wiluna samples demonstrated viability of the direct precipitation of uranium from saline alkaline leach with improved recovery, providing the opportunity for further capital and operating cost savings.
Capital and Operating cost re-estimates under the Optimisation Study are currently underway. As with the Pre-Feasibility, these estimates will continue to include all costs needed to advance and operate a project, including infrastructure and closure costs. The Study is due for completion early September.
Research Capital said in a recent research report on Toro Energy, "the current optimisation study look set to substantial improve the economics of the project, therefore, as it was designed to lift grades by at least 20% and cut the capex figure by at least 10%. This means optimisation study release in 3Q09 will be a huge milestone for Toro Energy and its share price.”
Toro has fashioned a Joint Venture with Deep Yellow's (ASX: DYL) Namibian company, Reptile, over Toro's majority owned Namibian exploration tenements.
This will enable exploration of these highly prospective tenements to be fast-tracked, as well as access Deep Yellow's Namibian expertise. Deep Yellow will also fund the exploration. Reptile will spend A$3.5m over the next two and a half years to earn a 65% interest. Toro will retain 25% while a black empowerment enterprise, Sixzone Investments, retains 10%.
Airborne and magnetic / radiometric interpretation of the western end of the Lake Mackay tenements identified six targets for further follow-up via geochemical sampling and gravity data collection. A geochemical sampling and gravity surveying program using helicopter support was completed during May and early June. Results are expected late in July followed by drilling late in August.
At the end of the June 2009 quarter, the Company held cash and net receivables of A$9 million.
Jameson Resources has strong quarter as Basin Coal mine momentum, pushes shares higher
Jameson Resources (ASX: JAL) investors have alot to crow about during the June quarter - the share price was up a tidy 182% to 48 cents.
Here are the reasons why.
A resource upgrade from 19 Mt to 117 Mt of bituminous thermal coal the Basin thermal coal mine in British Columbia, Canada substantially increased potential for extended mine life.
The Resource classification includes 82.3 Mt measured/indicated and 35.1 Mt inferred at cut off stripping ratio of 8:1 (BCM: tonne raw coal). Measured Indicated and Inferred Resource is based on the Canadian NI43‐101 guidelines.
Indicative coal quality tests yielded 5,780 kcal/kg (AR), 12.5% ash, 10.5% moisture, and 0.57% sulphur returned from first phase of bulk sample test work.
A placement was made at 25 cents per share to raise funds from overseas based institutional investors provided first tranche of working capital required for recommissioning of the Basin thermal coal mine.
Several existing coal transportation options are under review with capacity available at port. Basin is the closest mainland coal project to the Western Canadian ports and has good rail and road access with significant available capacity. The existing infrastructure, including logging roads, loading facilities and rail, will significantly minimize the capital required to recommence operations.
Interesingly, Canada is emerging as an alternative supplier for high quality thermal coal with its available port capacity. 2008 estimates show Asia importing approximately 18.5 million tonnes of coal from Canada which is 500,000 tonnes up from 2007. In 2007, Japan and South Korea were the two leading buyers of Canadian coal with 10.6 million tonnes and 6.1 million tonnes respectively.
Approvals are in place to re‐start mining and processing operations at Basin within 12 months.
Independent consultant, Norwest Corporation anticipates completion of the recommissioning study on the Basin coal mine Mine in Q3 2009. Norwest Corporation is undertaking a feasibility study on behalf of the Company to develop a project implementation schedule to recommission the project as a low cost open pit coal mine under the existing 250,000 tpa mining permit.
Preliminary scoping studies and environmental assessment are also being undertaken to assess the viability of an expanded production scenario of approximately 1M tonnes per annum. Pending successful outcome of the study, production could commence within 12 months.
Discussions with potential domestic and overseas off‐take partners are advancing. These include international utilities and local cement manufacturers. Cash balance was $3.2 million.
www.proactiveinvestors.com.auPo Valley Energy has strong quarter, to connect to Italian gas pipeline grid in 2009
Italian gas developer, Po Valley Energy (ASX: PVE) has had one of its best quarters on record - on the verge of becoming a gas producer in the under-supplied Italian market.
Po Valley will bring its first Italian gas fields into production and is on track to connect its first production wells to Italy’s national pipeline grid during 2009.
The equation for Po Valley investors is attractive: low production costs, easy connection to an extensive pipeline grid and the historically strong price for gas in Italy.
For the June 2009 quarter, Sillaro and Castello Installation of surface plant commences at Castello Castello pipeline grid connection nears completion. Sillaro-2 was successfully drilled to target depth – well completion underway.
Bezzecca-1 well was successfully drilled and completed with downhole production equipment. Combined 3.9 million cubic feet per day flow rate was achieved across three levels.
New exploration licences were gained. Geological work is advancing on the Grattasasso and CadelBo-sco di Sopra licences. AR168PY (Azzurra) is proceeding towards grant Gradizza drilling application under preparation.
Italian gas market (Euro-denominated) prices eased from €0.29 per cubic metre at end of March to €0.21 at 30 June.
€5m of existing debt was converted to senior long term debt at attractive rates. Cash at bank at 30 June was A$7.8 million.
Monaro Mining reports positive uranium values detected by Vale in Arizona project
Monaro Mining (ASX: MRO) has been advised by Vale that field evaluation at the Apache Basin uranium project in Arizona has detected uranium values up to 0.20% U308.
Vale is funding exploration and has spent US$750,000 in the first year as per the agreement with Monaro.
Follow up rock chip sampling and assessment by spectrographic analysis demonstrated that a number of samples are highly anomalous for uranium. Rock chip sampling of several prospects and anomalies have yielded values of between 0.064 and 0.20% U3O8.
Interesingly, the style of mineralisation is quite comparable to the better known uranium deposits within the Apache basin such as Workman Creek (not owned by the Company), Jim and Red Bluff claims, Bull Claims and Sue mine.
Historic records indicate that between 1953 and 1955, 3009 tonnes grading 0.19% U3O8 were taken from the Red Bluff mine, and much of that material still remains in stockpiles controlled by UCA. Grades of up to 2.0% U3O8 have been reported at Red Bluff. The Sue mine was worked between 1954 and 1956 and reportedly shipped about 500 tons of ore containing an average 0.18% U3O8.
Vale has explored a number of survey blocks and several significant anomalies have been confirmed and new prospective areas have been delineated.
The permitting process on the Jim and Bull claims is continuing with the view to facilitate drilling operations as soon as possible. It is now anticipated that drilling will commence in February of next year.
Monaro believes the Apache project is highly attractive on a conceptual basis as it represents a significant regional “play” with the possibility of yielding multiple targets.
Field work by a combination of Vale personnel and UCA contractors is planned for late Third Quarter 2009. The intent of this work will be to continue field examination of high priority locations within the airborne survey area, obtain samples where required and recommend the acquisition of additional land as may be indicated by the results of the field work.
Large IPOs and talk of cooling measures bring China markets down
After a day of volatile trading, Chinese markets plunged by the largest drop in 8 months, driven by concerns that the world's largest IPO in 16 months will eventually weigh on the Shanghai index, and that the government might finally act to control the flow of hot money.
The Shanghai Composite ended down 5.1 percent. The Hang Seng Index fell 3.2 percent, with the Hang Seng China Enterprises Index sinking 4.3 percent. Taiwan's Taiex slid 0.8 percent.
There were RMB7.4 trillion yuan of new loans in the first half of 2008, equivilent to about half of the country's GDP for the same period, prompting economists to call on the central bank to tighten up monetary policy for fear of asset bubbles. Though the government gave no sign of change today, analysts predicted it will soon.
China Cosco Holdings Co., (SH:601919, HK:1919) the world's biggest operator of dry-bulk ships, sank 6.7 percent in Hong Kong and 8.36 in Shanghai after issuing a profit warning predicting a loss. PetroChina (SH:601857, HK:0857) lost 5.99 percent in Shanghai and 3.9 percent in Hong Kong after last night's news that China is cutting fuel prices
Two IPOs
China State Construction Engineering Corp. (SH:601668) shares ended 56 percent up from their offering price. The US$7.3bn offering.
In Hong Kong, BBMG Corp (HK:2009), a large manufacturer of construction materials, jumped 60 percent from its opening price in its IPO today.
Metal producers down
Non-ferrous metal stocks dropped 8.14 percent on average.
Henan Yuguang Gold & Lead (SH:600531), Zhuzhou Smelter Group (SH:600961), Baoji Titanium Industry (SH:600456) all plunged to the 10 percent trading floor.
Jiangxi Copper (SH:600362, HK: 0358) lost 8.95 percent in Shanghai and 8.52 percent in Hong Kong. Chinalco (SH:601600, HK:2600) declined 8.36 percent in Shanghai and 5.91 percent in Hong Kong.
Real estate stocks sink
Property stocks lost 6.99 percent on average on mainland markets. The Hang Seng Property Index lost 3.63 percent.
CC Land Holdings Limited (HK:1224), dropped 11.85 percent. Hopson Development Holdings (HK:0754) dropped 8.12 percent. SRE Group Ltd. (HK:1207) dropped 7.1 percent.
Over a dozen stocks plunged to the 10 percent floor on mainland markets including Zhejiang Guangsha (SH:600052), Wolong Real Estate Group (SH:600173) and Beijing Huaye Realestate (600240).
The largest two developers, China Vanke (SZ:000002) and Poly (SH:600048), declined 7.3 and 8.7 percent, respectively.
China is the gorilla of commodities demand
Frank Holmes, CEO and chief investment officer at U.S. Global Investor, gives his views on the prospects for inflation and the impact of China on global commodities makets and prices. Interview with The Gold Report.
The Gold Report:
Frank, U. S. Global Investors has published a chart showing copper price fluctuations on a monthly basis with 30-, 15- and 5-year trend lines. Can you speak to why that chart is important?
Frank Holmes:
First let me start with a little background. There was a wonderful book written back in the '30s called The Battle for Investment Survival by Gerald Loeb. When I first got in the business, I was told I had to read it every year to remind myself of the cycles, different asset classes, and the value drivers for them. And the book says buy copper when it's soft in November and sell in March.
The 30-year pattern on the graph follows what Loeb's book advised and what was the rule of thumb when I first got into this business-that "buy in November and sell in March." This was because of seasonal stockpiling during winter months leading into major building and construction projects in the spring and summer months.
About 15 years ago, when China started becoming a significant buyer of copper, the pattern started to change. This pattern shows copper prices rising from January through May and then trading pretty much sideways for the rest of the year, with modest peaks and valleys along the way. A similar pattern is drawn to represent the past five years. The five-year and 15-year cycles are very much aligned with the infrastructure spending taking place in China, as well as with the lack of new mine supply coming on-stream from anywhere in the world to meet this increasing demand.
China has changed the demand for copper by making very strong commitments in infrastructure spending. Five years ago they were building power stations - now they're building power lines. They're basically expanding their spider web of copper wire all across the country to get more people access to electricity, especially in the rural areas, and this is setting up demand for copper that relates to their infrastructure spending.
TGR: One of the theories I've heard is that China has been divesting U.S. dollars by stockpiling basic commodities, one of which is copper. If that's true, could China's copper buying boom be short-lived?
FH: You're not seeing the Chinese dump dollars to go and buy copper or gold, etc. What we're seeing is, rather than rolling dollars over and buying new notes where the yields are so much cheaper, they're going and buying other commodities. And that's a much different statement than saying "I don't like American dollars." They're just saying that they prefer at this stage to own commodities rather than a note that's paying 10 basis points.
I think it's important to take a look at seasonal patterns. You can see the relationship between infrastructure spending and demand. And one should always take a look at China and ask whether or not they are a net exporter of a specific commodity. If they are, then they've stockpiled that commodity. That's just a well-known fact. For example, at the beginning of this super-cycle, zinc prices lagged. Then prices exploded and all of a sudden China became a net exporter instead of a net importer. That's the tipping point.
TGR: How could a regular investor monitor this? Are there some key elements to look for?
FH: Use a good money manager. The best money managers understand macro themes and they understand stocks and stock picking.
TGR: When we spoke last October, you indicated that we were at a tipping point, moving from deflation to inflation. Clearly a lot has happened. Do you think we've moved from that tipping point yet?
FH: When I made that statement, it was because of the huge increase in money supply. Money supply is one important aspect of inflation. The other real key factor is protectionism and unionism. If you go back to the '70s, it was a combination of rising money supply, rising oil prices, and huge labor strikes all over Europe and all over America.
And so right now all this money that's going into the system is like shoveling sand with a pitchfork. Populist policies that are focused on protectionism and unionism will force inflation in America.
Do I see across-the-board inflation? No. Do I see certain commodities having stronger inflation than others? Yes. Will that permeate and destroy and create a huge inflationary cycle? I don't see that yet, but the threat of that happening is still there over the longer term.
TGR: What sectors do you think will do well over the next six months to the end of the year?
FH: As far as commodities demand, China is the 800-pound gorilla. After that it's India, and also Japan. Even if North America's economic growth is slow and Europe's growth is slow, it will have an impact on demand for oil and other commodities.
I think the real sleeper is platinum. If the car business turns around in America, I think platinum has the capacity to have a spectacular move. Something like 90% of all cars sold in America are financed with loans in some form. Of course, the car business started a huge contraction when banks weren't funding the loans, and that affected the platinum industry since it's used in automobile emissions control devices.
If that process of money turnover starts to expand, however, and if there are low interest rates, then we could see a boom in car demand. With such a strong environmental movement, commodities like platinum will do exceptionally well because of industrial needs coupled with environmental concerns.
TGR: What percentage of gold bullion versus stocks do you recommend in a portfolio?
FH: We're consistent in suggesting to investors that they consider a maximum 10% allocation to gold, half in gold equities and half in bullion. We preach a message of moderation. You shouldn't try to get rich with gold or gold stocks because you would take too much risk trying to do that. I have said you buy gold and gold stocks as a form of financial insurance in your portfolio. Even when the price of gold is soaring, as it was in 2006 and again last year, we never changed our position about not chasing the momentum. It's also important to rebalance at least annually, so every year or even each quarter when gold is up substantially, you take some profits and you maintain that allocation.
TGR: Regarding gold equities, what do you recommend that individual investors look at-explorers, near-term or producers?
FH: That depends on the risk profile and volatility they are willing to assume. The biggest potential for alpha is going to come from the junior mining stocks, particularly the mid-caps, where there is something coming into production.
The big money to be made with the least amount of risk is when a company is just coming into production, or a bigger company is going to increase its production. At that point there's sort of a re-rating that takes place in the market. The greatest risks are the explorers who have a discovery. It doesn't matter how far they go up, it all falls 70% before they ever produce an ounce. It's very risky as they go through this production phase, as it takes time and money. When you're within six months of that new production, and it's been well funded, that's a less risky decision.
When looking at the major companies, one has to look at the currency impact of the country where it's being produced. If you're looking at South African gold stocks, for example, one has to be aware of the Rand. If the price of the Rand is going up faster than the price of gold, that means there's going to be a compression in the profit margin. If the price of gold is rising and the Rand is falling, that means you're going to have a huge expansion in profit margin.
Look at those currency patterns when looking at the big producers; it's the number one, simple way to look at it. Those stocks that outperform their peers on an historical basis have the highest production per share. There have been so many gold-mining companies that immediately do a financing, and they dilute, which dilutes the investors' upside.
Our best-performing stock year to date and the number-one holding is Randgold Resources Ltd. (Nasdaq:GOLD). Why is that? Because Dr. Mark Bristow, the CEO, made a commitment not to dilute the production per share and to not do a financing for the sake of raising money. And that showed in the marketplace; it simply pulled a trigger, and it was the best-performing stock.
TGR: Are there other gold stocks either in junior mining or near-term that are performing well for you?
FH: Jaguar Mining Inc. (TSX:JAG) (NYSE:JAG) did well. They were able to do a funding to maintain what they were doing, so stocks like that have done reasonably well. One of the biggest disappointments was Yamana Gold Inc. (NYSE:AUY). Again, Yamana made commitments or made statements to the Street, and all the analysts were very bullish, and they just never delivered the production per share that they were going to deliver for each quarter for the past six quarters. So, they were the number-one pick for their growth, and they never delivered it.
Gammon Gold Inc. (NYSE:GRS) initially disappointed everyone on their production per share. Then they got a new management and started to deliver, and the stock started performing much better. They started showing that production per share.
TGR: Are there other companies that you're looking at and saying, "They're approaching near-term production, and we expect them to do quite well"?
FH: I was recently down in Colombia. I think that Colombia Goldfields Ltd. (TSX:GOL) (OTCBB:CGDF), which works on Marmato Mountain, with gold over it, has a huge resource. Medoro Resources Ltd. (TSX.V:MRS) is going to acquireCGL, and if management is able to consolidate Marmato Mountain, put that into the company, you will have a very inexpensive company, even though it will take two years to do this. Compare that with the average stock trading at $47 for an ounce in the ground, and this trades at substantially less.
So, I think it's stocks like Medoro that are very exciting and in a great area where there have been big discoveries. The Colombia government is very pro-America, very supportive for any type of resources in the country. I think that they have something that is very, very special. Medoro Gold is up 14%, and I think has lots of opportunity on the upside.
Now, the last one that I think is most interesting and is closer to the production profile as proven up is Romarco Minerals (TSX.V:R). But it's still several years away. The management there has done a wonderful job of pulling that asset together, fixing it up, and building it out, and as it gets closer to that production profile, it will probably be taken over.
And we're long on both of these stocks; I am speaking from a very biased long position.
TGR: You were following at one point Royal Gold. Is that still in your portfolio?
FH: Yes, We love Royal Gold Inc. (Nasdaq:RGLD), a precious metals royalty company, for a simple reason-high profit margin. That profit margin is very important because most gold stocks have a low profit margins.
Franco Nevada Corp. (FNV.TO) is also one of our holdings, and FNV has an attractive seven-year warrant. Pierre Lassonde is the chairman, and one of the largest shareholders. Of all the gold mining shareholders up there, I would think he's probably one of the wealthiest, and it's all been made as an investor and not by pre-stock options. He doesn't believe in that. They have a very, very tight policy about giving out stock options; they're very much of a Warren Buffett model.
Royal Gold-same thing-management owned, very focused, a return on capital model.
TGR: Any other gold insights you can give us for our readers?
FH: Red Back Mining Inc. (TSX:RBI) has been a great performer, with Lukas Lundin, a great entrepreneur, behind it. That's part of the Lundin empire. Made a bid for Moto Goldmines Ltd. (TSX:MGL). If the deal gets done, it's extremely accretive, and they're doing a wonderful job of executing.
[Editor's note: on July 17, Moto Goldmines Ltd. confirmed the receipt of an unsolicited acquisition offer from Randgold Resources Ltd. (GOLD, RRS.L) by way of a proposed plan of arrangement. Yesterday, the company's board decided that the Randgold offer is superior to the plan of arrangement it had with Red Back Mining Inc., announced on June 1.]
Red Back's CEO Rick Clark has done a fabulous job of building that company for the Lundin empire. So, Red Back shows up as an important part of our investments and I think that's one of the more exciting opportunities. They will probably become a big cap gold stock.
TGR: Thanks very much Frank, this has been great. We appreciate your time.
Frank Holmes is the CEO and chief investment officer at U.S. Global Investors Inc., a registered investment adviser managing 13 no-load mutual funds specializing in natural resources, emerging markets and global infrastructure. He is one of the world's most authoritative and respected voices on gold, and is the co-author of the book "The Goldwatcher: Demystifying Gold Investing." (2008: John Wiley & Sons). He is also the lead contributor to U.S. Global's investment blog "Frank Talk: Insight for Investors." U.S. Global's funds have received numerous awards and honors during Mr. Holmes' tenure, including more than two dozen Lipper Fund Awards and certificates. Mr. Holmes was named 2006 Mining Fund Manager of the Year by Mining Journal. He is a much-sought-after keynote speaker at national and international investment conferences. He is also a regular commentator on the financial television networks CNBC and Bloomberg, and has been profiled by Fortune, Barron's, The Financial Times and other publications.
Published courtesy of The Gold Report - www.theaureport.com
CADC adds four portable concrete plants to serve railway expansion
China Advanced Construction Materials Group Inc, a provider of ready-mix concrete and related services, said it has increased the number of portable, ready-mix concrete plants serving the build-out of the national rail network to nine from five.
The new plants are located between railway stations near Qinhuangdao, Yongfu, Hangzhou, Liuzhou and Guilin.
Chairman and CEO Xianfu Han said: "We continue to generate very strong cash flow, which has allowed us to rapidly expand our network of portable plants. Each of these plants is directly tied to contracts we have recently won and will be operating near capacity."
"The cost for each plant and associated equipment is approximately US$3 million. Each plant is capable of generating over US$2 million in revenue per year, with very attractive margins and high return on investment. We are very confident in our ability to win additional railway projects in the near future and expect to add more portable plants to support these contracts," he added.
China ACM, founded in 2002 and based in Beijing, is primarily focused on producing and supplying a range of ready-mix concrete materials for highly technical, large scale, and environmental construction projects.
www.proactiveinvestors.com.hkChina Crescent Enterprises wins US$2m software contract
China Crescent Enterprises said it has been engaged by a Hong Kong-based software company to develop a new functionality for an updated release of its proprietary software product. The contract is valued at US$2 million.
China Crescent recently announced strong sales progress and its management anticipates reporting increased revenue and net income in 2009 compared to 2008, when it reported revenue of US$41.9 million.
www.proactiveinvestors.com.hkTuesday, 28 July 2009
Anglo Platinum gets bailed out by parent, Anglo American by Barry Sergeant, Mineweb.net
Anglo Platinum's operating cash flow fell by 94% in the first half of 2009, from ZAR 10bn in the year-ago period, underpinning the total collapse in earnings, as the group warned on 15 July. For years, Anglo Platinum, 80% held by Anglo American, has been a significant contributor to Anglo American's cash flow, but the dividend for at least the first half of this year has been passed up, in line with Anglo American passing its final 2008 dividend.
Platinum group metal (PGM) prices have been an issue for many months, and for most of this year, the inordinately strong rand has further undermined profits. Anglo American naturally had earlier and clearer sight on Anglo Platinum's plight, and the R13.8bn total dividend paid by Anglo Platinum in 2008, per its cash flow statements, is going to be sorely missed.
| Anglo Platinum |
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|
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| ZAR bn | 1H09 | 1H08 | 2008 |
| Operating cash flows | 0.642 | 9.975 | 17.345 |
| Investing activities | -4.620 | -5.602 | -14.556 |
|
| -3.978 | 4.373 | 2.789 |
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|
| Dividends | 0.003 | 5.448 | 13.816 |
|
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|
|
| Cash on hand | 1.603 | 4.466 | 2.870 |
|
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|
|
|
| Net debt | -17.957 | -5.907 | -13.459 |
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It seems as if the smash that Anglo Platinum has encountered may just be reason enough for the beleagured world No 1 in platinum to reinvent itself. Specialist analysts have pointed out that the global platinum sector - about two thirds from southern Africa, and most of the rest from Russia's Norilsk and scrap - has continued to overproduce, relative to demand, leaving miners trashed up on the supply-demand equation for much of the past 12 months.
Even in its latest set of results, Anglo Platinum prides itself on a "strong" production outcome: "While production in the first half of 2008 was impacted by numerous ‘abnormal events such as flooding and electricity constraints, production in the first half of 2009 was managed, in line with our lower annual production target as planned. Anglo Platinum is pleased with the strong production performance, while implementing the restructuring, productivity and cost improvement plans". Clearly, profits and cash flows were not in line with expectations.
Refined platinum production at 1.056m ounces for the first half of 2009 amounted to an increase of 6% against the year-ago period, and the target of 2.4m ounces of refined platinum production for the full year "remains in place". Here, "refined platinum production" refers to the so-called 4E platinum group metals (PGMs), platinum (1.056m ounces in the first half of 2009, as noted), about 597,000 ounces of palladium, 164,000 ounces of rhodium, and 44,000 ounces of gold).
| Global PGM supply, 2008, Koz |
| |
| South Africa | 4767 | 66.3% |
| North America | 345 | 4.8% |
| Russian & other | 775 | 10.8% |
| Zimbabwe & other | 331 | 4.6% |
| Scrap | 970 | 13.5% |
| Total | 7188 | 100.0% |
| Of which: |
|
|
| 2387 | 33.2% | |
| 1907 | 26.5% | |
| 880 | 12.2% | |
| 732 | 10.2% | |
| 500 | 7.0% | |
| 59 | 0.8% | |
| 180 | 2.5% | |
Looking at the longer term, Anglo Platinum is budgeting on a platinum price of $1,350 an ounce, near double the low seen in the latter parts of 2008, and about $145 an ounce higher than the current quote.
| METAL PRICES | Low* | High* | Current | From low | From high |
| Precious, USD/oz |
|
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|
|
|
| Gold | 682.41 | 1006.29 | 956.94 | 40.2% | -4.9% |
| Platinum | 744.25 | 1784.00 | 1205.20 | 61.9% | -32.4% |
| Palladium | 160.75 | 394.50 | 260.93 | 62.3% | -33.9% |
| Silver | 8.46 | 17.91 | 14.04 | 65.9% | -21.7% |
| * 12-month |
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Anglo Platinum's production plan is now to "set up operations to produce around 2.5 million platinum ounces per annum for the next three years, with a small but steady increase in production thereafter". While this may suit Anglo Platinum, to the extent that the group has missed production targets year in, year out, it may also comprise belated admission that as global "swing producer" of PGMs, Anglo Platinum is indeed crying out for reinvention.
The majority of miners impacted by the sudden collapse in most commodity prices during the latter parts of 2008 took drastic action, with most efforts aimed at cash preservation. Production and/or sales were cut, often by massive amounts. At De Beers, the world's biggest diamond digger, recovered carats of diamonds fell three quarters to 6.6m in the first half of 2009, compared to 24.2m carats in the first half of 2008.
Vale, the world's biggest miner of seaborne iron ore, and No 2 miner in the world, by market value, sold 49m tonnes of iron ore in the first quarter of 2009, compared to 68.3m tonnes in the first quarter of 2008. Vale remains one of the world's most profitable mining enterprises.
Anglo American, however, appears to have a "plan B", given its declared wisdom that "it is extremely difficult to forecast and plan for short term market changes, as we experienced over the past year". The plan here is an "intention to establish flexibility and increase our ability to react to these shifts more efficiently than was traditionally the case in underground hard rock environments".
The main sources of this flexibility have been identified as Mogalakwena, the large open pit mine "that can practically and cost effectively be ramped up or down". This is slated as a "unique attribute of Anglo Platinum and the largest open pit platinum mine in the world". The high volume of production from Anglo Platinum's large suite of underground mines are thought to be able to adjust volume "by up to 10% on a short-term basis".
In total, Anglo Platinum reckons its flexibility could amount up to 500,000 PGMs, "and allows us to adjust market requirements efficiently". There is also an admission that "there are shafts in Anglo Platinum that cannot be mined efficiently in the current and forecast environment"; a process is underway that "could lead to these shafts being put on care and maintenance, a process we intend to complete by the end of this year".
But while recognizing that there is a "market", the idea of losing production continues to rankle, apparently: "It should be noted that although a total of 140,000oz of high cost production is under threat, and likely to be stopped, we still intend to make up this shortfall by increasing production from our more efficient mines".
While Anglo Platinum has again rolled out the normal intentions to cut costs, increase efficiencies and productivity, and even do something about overheads, stay in business capital (SIB) expenditure is expected to remain around current levels of some R10bn a year. Anglo Platinum appears happy that "our capital management will achieve these objectives".
Production is marching on with the inevitable prospect, at least as Anglo Platinum puts it, of again increasing funding requirements in the second half of the year "largely due to lower cash from operations and capital expenditure".
After 30 June 2009, Anglo American nearly tripled its committed facility to Anglo Platinum by R7.1bn to R20.6bn, a bail out of R13.5bn. Anglo Platinum has indicated that on these metrics, it will probably not need a rights issue for at least a year, and possibly not at all. Without the bail out from Anglo American, Anglo Platinum would be a very different animal. Across the way, Anglo American has extended interest-free loans to 45%-held De Beers, amounting to $368m on 30 June 2009.
So far as capital expenditure is concerned, Anglo Platinum could well be in boom times, as "the following major projects are progressing without delay":
• Rustenburg Paardekraal 2 shaft replacement project (R2.3bn), which will produce 120,000 ounces of refined platinum a year by 2015
• Amandelbult East Upper UG2 project (R1.5bn), which will contribute 100,000 ounces of refined platinum per annum by 2012
• The Mainstream Inert Grind (MIG) projects (R1.4bn) to improve mineral liberation and PGM recovery
• Rustenburg Townlands Ore Replacement project (R1.0bn), which will contribute 70,000 refined platinum ounces a year from 2014
• The MC Plant capacity expansion (R0.7bn), and
• Unki Mine (R2.9bn) development in Zimbabwe, continuing as planned.
| Selected platinum stocks |
|
| ||
|
| Stock | From | From | Value |
| Tier I platinum | price | high* | low* | USD bn |
| ZAR 575.00 | -45.0% | 64.3% | 17.634 | |
| ZAR 182.35 | -28.5% | 110.7% | 14.206 | |
| GBP 12.91 | -61.3% | 152.2% | 4.113 | |
| Averages/total |
| -44.9% | 109.1% | 35.952 |
| Weighted averages |
| -42.5% | 88.2% |
|
| Diversified |
|
|
|
|
| GBP 19.01 | -36.8% | 109.8% | 42.109 | |
| ZAR 35.00 | -34.0% | 125.8% | 0.965 | |
| USD 10.16 | -56.8% | 189.5% | 19.368 | |
| ZAR 127.00 | -52.1% | 67.1% | 3.467 | |
| Averages/total |
| -44.9% | 123.0% | 65.909 |
| Weighted averages |
| -45.1% | 125.2% |
|
| Tier II platinum |
|
|
| |
| USD 6.37 | -39.8% | 261.9% | 0.600 | |
| GBP 2.50 | -52.8% | 226.5% | 1.710 | |
| ZAR 33.00 | -41.1% | 100.0% | 1.529 | |
| CAD 2.90 | -37.1% | 154.4% | 0.271 | |
| AUD 8.00 | -38.5% | 128.6% | 0.708 | |
| CAD 0.51 | -74.4% | 175.7% | 0.347 | |
| CAD 0.95 | -62.3% | 331.8% | 0.163 | |
| Averages/total |
| -49.4% | 197.0% | 5.328 |
| Weighted averages |
| -49.7% | 162.0% |
|
| Developers and explorers |
|
|
| |
| CAD 1.12 | -77.6% | 250.0% | 0.461 | |
| ZAR 2.36 | -60.7% | 133.7% | 0.178 | |
| CAD 1.47 | -57.4% | 237.9% | 0.210 | |
| CAD 2.02 | -70.9% | 180.6% | 0.141 | |
| AUD 0.94 | -63.3% | 159.7% | 0.213 | |
| GBP 0.18 | -62.0% | 16.7% | 0.024 | |
| GBP 0.69 | -21.7% | 185.4% | 0.201 | |
| CAD 0.16 | -83.3% | 121.4% | 0.048 | |
| GBP 0.90 | -21.1% | 328.6% | 0.137 | |
| CAD 1.18 | -61.7% | 66.2% | 0.101 | |
| CAD 2.20 | -51.1% | 71.9% | 0.060 | |
| CAD 2.90 | -21.2% | 574.4% | 0.154 | |
| GBP 0.39 | -35.3% | 447.4% | 0.077 | |
| AUD 0.30 | -71.1% | 195.0% | 0.124 | |
| GBP 0.02 | -68.7% | 135.0% | 0.031 | |
| Marathon | CAD 0.75 | -72.3% | 200.0% | 0.021 |
| CAD 0.06 | -63.6% | 140.0% | 0.028 | |
| CAD 0.10 | -84.6% | 17.6% | 0.006 | |
| AUD 0.65 | -10.4% | 207.1% | 0.086 | |
| CAD 0.25 | -76.2% | 150.0% | 0.014 | |
| AUD 0.11 | -8.3% | 450.0% | 0.012 | |
| CAD 2.19 | -4.4% | 642.4% | 0.141 | |
| Rusina | AUD 0.07 | -63.3% | 100.0% | 0.013 |
| CAD 0.11 | -87.9% | 133.3% | 0.019 | |
| Macdonald Mines | CAD 0.13 | -51.9% | 400.0% | 0.017 |
| Hard Creek | CAD 0.19 | -59.1% | 137.5% | 0.011 |
| CAD 1.40 | -61.5% | 133.3% | 0.178 | |
| CAD 0.14 | -80.1% | 125.0% | 0.006 | |
| Wallbridge | CAD 0.13 | -51.9% | 257.1% | 0.011 |
| CAD 0.33 | -37.5% | 195.5% | 0.021 | |
| Mustang Minerals | CAD 0.22 | -42.9% | 340.0% | 0.017 |
| Northern Shield | CAD 0.26 | -62.3% | 372.7% | 0.017 |
| Platina | AUD 0.28 | -48.1% | 100.0% | 0.013 |
| CAD 0.11 | -65.0% | 110.0% | 0.005 | |
| Pacific NW Cap. | CAD 0.09 | -67.9% | 80.0% | 0.005 |
| AUD 0.23 | -45.2% | 283.3% | 0.014 | |
| Starcore | CAD 0.10 | -50.0% | 100.0% | 0.006 |
| Huston Lake | CAD 0.25 | -61.5% | 78.6% | 0.008 |
| Goldplat | GBP 0.10 | -25.9% | 8.1% | 0.018 |
| CAD 0.07 | -40.9% | 550.0% | 0.003 | |
| AUD 0.13 | -13.3% | 1525.0% | 0.032 | |
| Premium Exp. | CAD 0.46 | -4.2% | 922.2% | 0.020 |
| Eurasia Mining | GBP 0.01 | -58.3% | 25.0% | 0.006 |
| Silvermet | CAD 0.12 | -40.0% | 700.0% | 0.013 |
| Andulela | ZAR 0.05 | -94.1% | 25.0% | 0.003 |
| Developer averages/total | -59.0% | 290.3% | 2.921 | |
| Weighted averages |
| -62.2% | 196.7% |
|
|
|
|
|
|
|
| Overall averages/total | -53.1% | 251.3% | 44.201 | |
| Overall weighted averages | -45.3% | 99.8% |
| |
| * 12-month |
|
|
|
|
| Source: market data; table compiled by Barry Sergeant
Mineweb is a web-based international mining publication focusing on mining financial and corporate news and comment. | ||||
www.proactiveinvestors.co.uk
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