Monday, 29 March 2010

China Energy Recovery: simple and compelling business model

China Energy Recovery, Inc. (OTCBB: CGYV) China Energy Recovery is an international leader in designing, fabricating, implementing, and servicing “waste heat energy recovery” systems. CER's technology captures industrial waste energy to produce low cost electrical power. This enables industrial manufacturers to reduce their energy costs, shrink their emissions footprint, and generate sellable emissions credits. CER's systems are effective at reducing sulfur dioxide emissions which are a leading cause of acid rain. CER's technology delivers several key benefits to customers including:

·    Reduces energy consumption and overall energy cost;
·    Reduces  greenhouse gases and other harmful emissions;
·    Provides an attractive and quick return on invested capital.

CER's vision is to become the international leader in “waste heat energy recovery” systems by providing a low cost, environmentally friendly energy solution to manufacturing, reefing, and power generation companies. With its headquarters in Shanghai, the Company's primary focus is on the expanding Chinese market, where the Company has deployed its systems along with other international markets such as Egypt, Korea, Vietnam, and Malaysia. CER continues to invest in R&D and plans to build China's first state-of-the-art energy recovery system research and fabrication facility to allow CER to meet the increased demand for its products and services. The Company’s industry focus includes:

·    Petrochemicals
·    Paper Manufacturing
·    Refining/Power Generation (including Methanol refining)
·    Coke Processing
·    Cement
·    Steel

What is Waste Heat Energy Recovery?

Industrial facilities release significant amounts of excess heat into the atmosphere in the form of hot exhaust gases or high-pressure steam. Energy recovery is the process of recovering vast amounts of that wasted energy and converting it into usable heat energy or electricity, dramatically lowering energy costs for customers. Energy recovery systems are also capable of lowering heat pollution and capturing harmful pollutants that would otherwise be released into the atmosphere. It is estimated that if the energy currently wasted by all the U.S. industrial facilities could be recovered, it could produce power equivalent to 20% of U.S. electricity generation capacity without burning any additional fossil fuel and could help many industries meet stringent environmental regulations.


CER’s revenues were $8.9 million for the six months ended June 30, 2008 as compared to $9.9 million for the six months ended June 30, 2008, a decrease of 9.9%. Much of this decrease was due to the changing and challenging energy market over the last year. Loss from operations totaled $1.7 million for the six months ended June 30, 2009 as compared to an income of $813,816 for the six months ended June 30, 2008

In January 2010, CER secured $5.0 million in new debt financing which will be applied to the continued development and construction of its new production facility in Shanghai. Two investors provided an aggregate of $4 million under separate loans of $2 million, each of which matures in January 2013 and bears interest at an annual rate of 15.1%. An additional $1 million was provided through Haide Engineering (Hong Kong) Ltd., a company that CER's Chairman and CEO, Qinghuan Wu controls. This is an unsecured, interest-only loan bearing an annual interest rate of 9.5% and matures in January 2012.

With this transaction, CER has raised approximately $10 million in loans during the last six months toward the design and construction of its new production facility, which is scheduled to be completed this year. This facility will provide CER with more efficient production, increase its overall production capacity, and position the Company to continue to extend its operations in building and installing cost efficient, high-performance waste heat recovery systems in China and other markets.


Modern industrial processes utilize large quantities of fuel and electricity that produce heat as a byproduct of the manufacturing or refining process. The vast majority of this heat is released into the atmosphere despite having economic value. CER's technology enables manufacturers to recover this otherwise lost energy and reuse it to generate electrical power.

While CER has a proven ROI model for customers, in down markets and a down economy clients and prospects shrink their capital expenditure budgets. As the global economy heals and energy markets have continued to stabilize, CER’s revenues should again begin to increase in 2010 and beyond. China's new energy savings standard demands an increase and implementation of energy recovery technology. The phosphate fertilizer and sulfuric acid industry can expect a reduction in energy consumption and pollution once these new waste energy recovery systems are in place.

Management believes that net income will gradually increase due to its strategy of attempting to increase future sales by securing larger orders in the growing Chinese market.

On January 20, 2010, CER was recently granted a 10-year patent covering its cement kiln forced-circulated waste heat recovery boiler technology. The patent was authorized by the State Intellectual Property Office of People's Republic of China and granted to CER Energy Recovery on January 20, 2010. Cement plant waste heat boilers are a new technology developed by Vice General Manager and senior engineer at CER Shanghai, Wang Weiqing. CER is the only company currently using this technology and it expects, after further R&D, to develop new energy recovery technology solutions for energy intensive industrial processes.

In January 2010, CER signed a $2.6 million engineering, procurement, and construction (EPC) contract with sulfuric acid producer Wylton (Dazhou) Chemical Co. Ltd., a subsidiary of Wylton (China) Chemical Co., Ltd. to build and install a low-temperature waste heat recovery system for Wylton's 800,000 ton-per-year sulfuric acid plant. CER received an initial payment equal to 20 percent of the contract from Wylton. The remainder of the contract will be remitted over the course of the project, which is scheduled for completion in December 2010.

Despite the firm’s progress, during the past year its share price has performed poorly. However, with its restructured balance sheet in January 2010 and its position in the Chinese market, CER should begin to reestablish itself in the burgeoning energy recovery market.


Chief Executive Officer, Mr. Qinghuan Wu is a special expert of the Chinese Phosphate Fertilizer Industrial Association and the Chinese Sulfuric Acid Industrial Association. He recently participated as a special expert in achieving energy efficiencies before a Chinese State Standard Energy Consumption Conference held in Beijing. The conference examined sulfuric acid's energy consumption per unit product and established an energy consumption norm as part of the State Standard of the People's Republic of China.

CER's experienced engineering team and sophisticated production facilities enable the Company to deliver consistently high quality products and offer a complete solution from technical design through fabrication to final installation. With its significant experience, CER's engineering team has the knowledge and capability to deploy very complicated and large scale systems globally.

The Company has continued to make substantial gains in energy efficiency and is investing heavily in R&D to enhance the efficiency and range of its technology. CER employs over 150 highly experienced, specialized engineers that allow the Company to produce the largest and most complex systems in its industry.

Waste Heat Energy Recovery Market

Electrical power shortages and intolerable levels of pollution have resulted in mounting domestic and international pressures to initiate policies that will support the domestic production of clean energy. As a result, Chinese production of renewable energy is rapidly expanding and economically feasible technologies are in high demand.

The amount of energy currently lost in industrial processes is so great that it is estimated the U.S. could make 20% of all its electricity simply by using existing technologies to capture the energy that industry wastes, according to the EPA.

However, it is not surprising that at the moment China remains the firm’s main market. The country is the world’s second-largest consumer of energy, with China’s industrial sector accounting for 70% of its total energy consumption. Recent customers signed up in China include fertilizer companies Dongsheng Chemical and Hubei Yangfeng Group, and leading Chinese chemical firm Jiangsu Sopo Chemical Group.

Waste heat energy recovery and conversion will grow due to its simple and compelling reasons. Waste Heat Energy is free. Waste Heat Energy has zero pollution. Waste Heat energy recovery is very profitable and will be justified using tomorrow’s systems on distributed power systems.

Caza Oil & Gas cuts 2009 pre-tax losses as expenses decline, production up 28%

Caza Oil & Gas (TSX: CAZ; AIM: CAZA) responded to lower gas prices by growing production and cutting expenses to bring down pretax losses for full year 2009, while shifting focus on its oil exploration projects.

Caza’s production volumes rose 28% during the year to end-December, while revenues were down 27% due to the declines in gas prices. However, while revenues decreased by less than US$1 million from US$3.35 million to US$2.45 million, expenses were cut from US$8.3 million to US$6.2 million, resulting in a pre-tax loss of US$3.7 million compared to US$4.65 million in 2008. Losses per share declined from 0.04 pence to 0.03 pence.

NPV (net present value) of future net revenue attributable to proved reserves stood at US$17.9 million, while proved and probable reserves were estimated at US$76.1 million at 31 December 2009. Caza’s 2P (proven and probable) oil and gas reserves currently stand at 26.68 Bcfe (billion cubic feet gas equivalent), while 3P (2P+possible) reserves stand at 93.6 Bcfe.

Cash and working capital amounted to US$9.26 million and US$8.37 million respectively, compared to US$14.1 million and US$10.8 million at the end of 2008.

A significant portion of these funds will be used to finance drilling operations, Caza said, adding that the current cash reserves would allow it to grow its revenues and reserves.

The company is currently focused on its projects in Texas and Louisiana and is drilling the Matthys-McMillan GU #2 well in the Wharton West Field. Caza intends to continue developing its position in the field depending on the outcome of this well.

“Approximately 2.2 miles south of the Matthys-McMillan property, we have staked the test well on the Bongo prospect, which is planned to commence drilling in June, subject to partner approvals.  Management believes that this prospect could yield significant reserves and looks forward to drilling the test well,” said chief executive  of Caza Oil & Gas Michael Ford.

Subject to further farm out agreements, Caza plans to drill at least two tests in Louisiana, one further test in Texas and one test on its Wolfberry position in the Permian basin during 2010.

Colombian Mines gearing up for a busy drilling campaign

It has been a reasonably good run for resources companies as improving world economies have infused some buying interest. While companies have taken numerous steps to expand their resource estimates, only those with sound investment cases have been successful in securing finances to fund their expansion endeavours. The recent success by Canadian Venture listed Colombian Mines Corporation (TSX.V: CMJ) in closing a $3.89 million private placement should therefore be viewed in a positive light.

The private placement entails 4,100,000 units at a price of $0.95 per unit for gross proceeds of $3,895,000 with each unit consisting one common share and one non-transferable common share purchase warrant to purchase another Share for $1.20 for two years. CMJ intends to utilize the proceeds to finance its exploration activities in Colombia, including work on Yarumalito, El Dovio, other licenses, and for general working capital purposes.

Brisk exploration activity is expected at the Yarumalito project. The company is in the process of mobilizing a second drill to the project and will be deployed in the La Escuela gold target area. The first core rig has already begun drilling early last month and has completed two holes to date at La Escuela. The Company is permitting five additional drill sites in the La Escuela and Balastreras gold porphyry target zones, and has begun rehabilitation of the Mina Yarumalito mine workings in preparation for an underground drilling programme.

For readers who may be less familiar with CMJ, the Yarumalito property hosts intermediate sulfidation type gold – copper porphyry system located in the Marmato mining district, Colombia, with significant potential to host large bulk mineable gold deposits.

Three distinct types of mineralization have been identified on the Property and include large gold – copper porphyry type mineralization. The property consists of exploration and production licenses and contracts covering 1,425 hectares. CMJ has a purchase option agreement with the owners to acquire a 100% interest in the Yarumalito Property.

Exploration and development activities are currently underway at CMJ’s other projects as well. At the El Dovio Project CMJ has contracted McClelland Labs of Reno, Nevada to conduct preliminary metallurgical tests to determine the amenability of the El Dovio massive sulfide (gold-copper-zinc-lead-silver) mineralization to conventional extraction techniques. At the NUS Project, the Company has completed a property wide soil geochemical survey and surface rock sampling programme targeting gold porphyry style mineralization similar to the nearby Gramalote deposit. During reconnaissance exploration several historic artisanal adits were located and sampled.

Meanwhile, at the Venecia Project, CMJ has mobilised geochemical sampling crews to conduct soil geochemical sampling. Venecia is situated approximately 30 kilometres north of Yarumalito along the Cauca - Romeral trend, and lies adjacent to the La Mina gold porphyry and approximately 10 kilometres north of the +2 million ounce Quebradona gold porphyry. In addition to these projects, CMJ has Cerro de Cobre, AnorĂ­ – Porce and Rionegro projects, all in Colombia.

We cover a number of mining and oil & gas companies with projects in Colombia and are familiar with its mining environment. Unlike many other Latin American and African countries, Colombia has always maintained an investor friendly environment and the government encourages the participation of foreign companies in developing their mineral riches. CMJ has an interesting prospect portfolio and we will update you once we talk to the management.

About Colombian Mines Corporation

Colombian Mines Corporation is focused on the acquisition, exploration and development of high quality mineral properties in Colombia with near to intermediate term production potential. Colombia is increasingly recognized as a highly prospective, yet under-explored country with excellent discovery potential.

CBR Gold Continues to Expand High-Grade Precious Metals-Rich Mineralization at Niblack

Fundamentals for gold and base metals have never been in question save minor hiccups with vagaries of the world economy thus boosting the investment case of both producing companies and exploration companies. Making them unique however are the quality of assets and the business model. In what could be a unique business model, Canadian Venture and Frankfurt listed CBR Gold Corp. (TSX-V: CBG, Frankfurt: C3M) is looking to develop their prospect portfolio through joint ventures and partnerships.

Such strategies are not alien to mining investors. What makes CBG unique is the selection process of assets to be acquired. CBG seeks to acquire undervalued and underappreciated projects worldwide, use their technical expertise to accelerate early and advanced stage projects to the point of joint venture. CBG then partners with best in class companies for the development of their assets thus reducing risk to the company while maximizing the potential for success. Over the years, CBG has amassed a portfolio of excellent projects in Canada, the US and Australia.

For CBG, a busy 2010 awaits. According to John Williamson, President and CEO, the company intends to rapidly advance the Three Bluffs high grade gold deposit in the Committee Bay Greenstone Belt, Nunavut, Canada’ and has mobilized 4 drill rigs. CBG is in the process of spinning out some of its assets thus enabling the company to focus on its Canadian gold projects. Its flag ship projects, namely Niblack and Three Bluffs will be the main focus of CBG.

It nicely dovetails to CBG’s corporate strategy. The company’s joint venture partner, Heatherdale Resources Ltd is expected to fund exploration at Niblack to earn up to a 70% interest by funding it through to feasibility. Three Bluffs, meanwhile is 100% owned by CBG and is expected to see significant exploration by CBG. The North Country Gold Corp spin out, subject to shareholder approval, will be advancing the Three Bluffs Deposit. Three Bluffs hosts a NI 43-101 compliant resource of 2.7Mt at 5.85g/t gold for 508,000 oz gold (indicated) and 1.27Mt at 5.98g/t gold for 244,000oz gold (inferred). Explaining the intended spin out, Williamson stated that shareholders would hold an equal number of shares in two reporting issuers with distinct flagship projects that have unique prospects and requirements for success.

CBG intends to change its name to Niblack Mineral Development Inc. ("NIB"), which will retain its interests in the Alaskan VMS exploration properties located in Southeastern Alaska (Niblack, Ruby Tuesday and Khayyam) as well as an extensive proprietary database focused on this region. CBG will transfer its 100% owned Canadian and Australian assets, including the high-grade Three Bluffs deposit in Nunavut, Canada; the Jaurdi Hills project in Western Australia; and Toro Drilling Services Pty. Ltd. to the newly formed subsidiary North Country Gold Corp. ("NCG") in exchange for NCG shares, which CBG will then distribute to CBG shareholders on a 1:1 basis. CBG currently holds approximately $9 million in working capital, marketable securities and equipment, which will be allocated between NIB and NCG pursuant to the Transaction.

These corporate actions have not distracted the management of CBG and development efforts continue unabated. At the Niblack Project, CBG continues to encounter intersections of high-grade copper-gold-silver-zinc mineralization. The ongoing drill programme is utilizing two rigs which are presently focused on delineating the new, precious-metals enriched massive sulphide discovery located southwest of the Lookout Deposit; one of six known volcanogenic massive sulphide ("VMS") deposits within the 10 square mile Niblack property. The Joint Venture has now initiated a second and third series of underground fan drill holes.

Niblack's location at tidewater on Prince of Wales Island in southeast Alaska presents a number of project benefits, including year-round marine access, a well-trained labour force, a mature supply and service sector, proximity to Asian markets, and the support of community and Alaska Native corporation partners. The project is located 27 miles (44 kilometres) from Ketchikan, a community of 8000 people with important services to support project development, including a deep water port and international airport. The State's burgeoning minerals industry also enjoys a competitive tax regime and stable, predictable permitting and regulatory oversight.

About CBR Gold Corp.

CBR Gold Corp is a global exploration and development company focused on the acquisition and development of undervalued and underappreciated projects worldwide. The company has assets in Canada, the US and Australia and has a portfolio of gold and base metal prospects.  The company’s corporate strategy is to develop its assets through partnerships and joint ventures.

African Aura: iron ore, gold and diamond potential galore in Africa

African Aura is an established exploration and development company that operates three divisions: iron ore, gold and diamonds.

The iron ore division includes its 38.5% interest in the Putu iron ore project in Liberia which is moving through pre-feasibility managed by its joint venture partner Severstal Resources (the mining division of Moscow listed OAO Severstal). Putu has an initial resource of 1.07 Bt @ 37.6% Fe from 2.6km of the projects 12km strike which is currently being tested. Putu is presently the subject of a prefeasibility study, including airborne geophysics and a 27,000m drilling programme. The iron division also includes a 100% interest in the Nkout iron ore project and surrounding iron targets in Cameroon. Grab samples from Nkout have averaged 54% iron along a 5km section of a 12 km discontinuous ridge. The project is strategically well located situated close to the proposed rail route between the 2.5 billion tonne Mbalam iron ore deposit, and the proposed deep water port at Kribi on the Atlantic coast.

The gold division includes the multi million ounce potential New Liberty greenstone gold deposit. The project currently has a resource of 1.4 million ounces (NI 43-101 compliant 13.533 million tonnes of measured and indicated resource, with an average grade of 3.18 grams per tonnes), which is likely to be expanded and is presently being advanced through a bankable feasibility study. New Liberty is one of a chain of potentially similar deposits, including the high grade Weaju and Gondoja deposits, all in western Liberia, which will be drill tested by African Aura and are all considered to be in trucking distance of New Liberty. The Company is targeting annual gold production of 100,000 ounces pa from New Liberty.

The diamond division is represented by a 31.8% interest in AIM listed diamond producer Stellar Diamonds Plc (AIM: STEL), a subsidiary company which has successfully spun out of African Aura in February 2010 with RBC raising £5m for the reverse take-over of West African Diamonds. The holding in Stellar is presently worth a bit over £5 million, based on a share price of 15.5p per share.


African Aura is arguably one of the least appreciated mining juniors on the TSX and AIM. Arguably on a peer group comparison its current capitalization could be justified on either its iron ore or gold divisions on a standalone basis. The Company has a strong portfolio, and a highly motivated and experienced board and management team with a record of discovering deposits and taking projects through development and into production in Africa.

African Aura's strategy is to be a 'first mover” in pursuit of the next generation of gold and iron ore mines in emerging sub-Saharan Africa. The Company is distinguished by its experience of working in Africa and its ability to identify and assess the non-geological risks inherent with investing in emerging countries.

London mid-tier investment bank, Evolution Securities, in January stated current share price did not reflect the true value of African Aura, and noted that recently announced exploration campaigns are set to produce “considerable newsflow” in the first few months of 2010, which could spark further movements of the stock price. Similarly the London arm of GMP in February highlighted the likely fair valuation of Aura as being considerably higher than the current trading price.

Putu, Liberia Iron Project

Ownership:     38.5% Mano River Iron Ore Holdings, 61.5% Severstal Group
Target:         Haematite/Magnetite deposit with potential strike of 12km
Resource:     NI 43-101 Inferred resource estimate of 1.07 Bt @ 37.6% Fe from 2.6km of strike
Location:     South East Liberia, 100km for Atlantic Coast
Status:         4,000m drilling program completed
Program:    27,000m drill programme and airborne survey underway

In July 2009, SRK Consulting (UK) Ltd was engaged to produce a National Instrument 43-101 (NI43-101) compliant Independent Mineral Resource Estimate for the Putu Iron Ore Project based on previously announced drilling results. The estimate for the 2.6km section of the 12km ridge drill tested to date provided an initial Inferred Mineral Resource of 1,077 million tonnes at a grade of 37.6% total of Banded Iron Formation (BIF) mineralization.

African Aura is targeting a minimum resources of 2 billion tons and is targeting annual concentrate production of 20million tons by 2016. As a ridge Putu is relatively easy to mine, located only 120 kilometers away from deep water, requiring a basic terminal to be built close to an existing port, and simple railway infrastructure, suggests an attractive long life project.

New Liberty Liberia Gold Project

Ownership:     100%
Location:     North West Liberia
Resource:    1.4M oz (NI 43-101) 13.533Mt M&I at 3.18g/t Au
Geology:     Near vertical sheared ultramafics
Status:         BFS planned for H2 2010
Program:    10,000m drill programme and PFS underway

The New Liberty gold deposit is a classic shear-zone hosted Archaean age 'greenstone' gold deposit, which has geological parallels with gold deposits found in world class gold provinces such as the Victoria goldfields of Tanzania, the Kilo Moto region of north east DRC, the Guyana shield of Venezuela and Ontario in Canada. The Archaean geology of west Africa, as found in western Liberia, is one of very few Archaean gold provinces globally that remains to be significantly explored and one which African Aura’s consider has the potential to host numerous new open pit and underground gold mines.

The project has a 1.6km strike length and the hard rock has been mined intensively by artisanal gold miners down to a depth of up to 30m in places. African Aura has undertaken a systematic drill programme on the project which has yielded impressive results to date with a best intersect of 8.45 g/t Au over 37 metres. Other intersects below 200m include 23 metres grading 4.95 g/t Au and 26 metres grading 5.04 g/t Au.  Recent drilling confirmed the zone even goes even deeper with 4.42g/t intersected over 8m from 447 metres. The current 1.4 million ounce resource was projected down to a depth of only 300 metres. Metallurgical test work undertaken on ores from New Liberty yielded encouraging results, with gold being associated with silicate minerals resulting in high recoveries from gravity separation followed by conventional leaching.

Other Projects

In addition to the New Liberty Gold project and its surrounding deposits and the Putu and Nkout Iron Ore projects, African Aura has a pipeline of over 20 prospects discovered by its exploration teams to date.  In addition the Company it’s a 31.8% interest in diamond producer Stellar Diamonds plc (AIM:STEL) which recently undertook a reverse takeover of West African Diamonds. Led by RBC, Stellar raised £5 million from investors in February 2010. Stellar has a portfolio of projects in West Africa from production through to exploration. Two projects in Guinea are in production, namely Mandala and Bomboko, which provide cash flow. At the time of the merger, Mandala had produced over 53,000 carats and Bomboko had produced over 2,000 carats, with both projects currently undergoing expansion programmes. In Sierra Leone the Kono and Tongo projects comprise a series of kimberlite dykes, with the Kono project having produced 4,200 carats of diamonds through underground trial mining by Stellar in joint venture with Petra Diamonds. In Guinea, the Droujba kimberlite pipe and the Bouro kimberlite dykes are located in proximity to the Mandala mine and demonstrate grades of up to 500cpht and 200cpht respectively. Management believes that Stellar is well positioned to become a leading West African diamond producer, in one of the world's most prospective diamond regions.

African Aura is very well positioned as a junior mining company with value being created from its three divisions of iron ore, gold and diamonds. In Africa, there are often concerns about infrastructure, especially transportation, but with a significant track record in the region, the company’s management team has assembled and efficiently advanced a portfolio of projects with world class potential and on which it is focused on moving forward rapidly. The company has been active in Liberia since 1998 and Cameroon since 2006. With a number of significant events recently announced and expected to be announced, African Aura should soon draw the attention of a wider range of investors and industry players.

Kenmare Resources' open offer part of £180m fundraising gets 73.5% take-up

Kenmare Resources (LSE: KMR) the open offer of its £179.6m placing and open offer fundraising announced earlier this month for its Moma titanium minerals mine in Mozambique received a take-up of 73.5% from qualifying shareholders.
The remaining shares representing 26.5% of the open offer have been allocated to the investors with whom they have been conditionally placed.
Kenmare expects to complete the expansion of the Moma mine in 2012 with full production at the expanded design capacity expected late that year to capitalize on the expected market supply deficit. The planned expansion provides for a 50% increase in design capacity, taking ilmenite production to 1.2m tonnes per annum.
The project has an estimated cost of US$200m, including a US$18m contingency. The project is based on an expansion study, which was completed in January 2010. Of the placing proceeds, £133.1m (US$200m) is intended to fund the engineering, procurement and construction costs of the expansion project.
In January 2009, the company revealed that heavy mineral concentrate production at Moma had reached full design levels, after achieving a 22% quarter-on-quarter increase in production in Q4 2009.
The remaining proceeds of some £37.7 million will be used to cover any increase in costs of the expansion and general capital purposes including debt service payments which cannot be met from operating cash flows.
During 2009, Kenmare produced 826,200 tonnes of heavy metal concentrate, 494,400 tonnes of finished product as a result of processing and achieved 418,000 in export sales tonnes. The company reported a net loss of US$30.35m for the year on revenues of US$26.7m. The group had no revenues in 2008.
Shares in Kenmare rose 3.5% on today's news.

Churchill Mining’s East Kutai coal project gathers momentum in H1

In ist first-half results statement, Churchill Mining (AIM: CHL) said the development of its world-class East Kutai coal project (EKCP) in Indonesia continues to gather momentum. During the six months ended 31 December 2009, the company completed a maiden in-situ mining reserve of almost one billion tonnes of thermal coal and completed the project’s initial feasibility study.

The company has made significant progress with the EKCP, and it is rapidly approaching a crossroads in its development cycle. Churchill said it is still evaluating how best to generate value for shareholders, and it is considering its options including the sale of the project and/or the company, the development of EKCP as a joint venture, or financing and developing the EKCP itself.

“EKCP is a world-class opportunity and since acquiring a 75% interest in the project in 2007, we have been actively defining a large-scale sub-bituminous thermal coal resource which we believe will be extremely attractive to end-users of thermal coal, particularly in India and China”, chairman David F Quinlivan sommented .

A JORC reserve report was completed by SMG Consultants in October 2009, defining an initial JORC probable In-situ Reserve of 956 million tonnes of thermal coal. Churchill said that this significant achievement provides a strong platform, and the increasing confidence in the resource base enables the company to assess and negotiate strategic opportunities with a strengthened position.

The feasibility study identified the potential to for estimated annual production rate of 20 million tonnes per annum. According to Churchill the initial results from the study have been very encouraging, and it has subsequently been carrying out a detailed assessment on project economics and development requirements. This feasibility review is expected to complete in the second quarter of 2010.

In the meantime, Churchill is continuing to advance the project by putting key infrastructure items such as the mine stockyard, overland conveyor, port/ship-loader and power station out to tender. The company said that, to date, the bids received have been well under predicted costs due to the resurgence in global manufacturing and engineering capabilities following the global financial crisis.

The project construction work at EKCP is expected to take approximately two years to complete.

“With this timeframe in mind, we have commenced the application process for necessary licences and permits with the relevant Central, Provincial and Regional Indonesian Governments and will be working diligently with these agencies to ensure that approvals are progressed as rapidly as possible”, Churchill stated.

Furthermore, Churchill continues to assess marketing and off-take possibilities for EKCP coal, with the company’s representatives recently visiting 17 companies on India's East Coast to discuss the project and potential off-take agreements.

The company said that the trip was very successful and the company is highly encouraged by the growth profile of future Indian coal demand, Churchill said. According to Churchill, it was established during the trip, that India will need a minimum of 100 million tonnes per annum of new EKCP-styled coal to meet expected future energy needs.

For the first-half to end-December 2009, Churchill reported a loss of US$3m, narrowed from US$13.8m in the previous first half, a period when it booked a US$5.7 impairment charge and had significantly higher administration costs.  The company said that this is inline with its expectations as a mining company in the pre-production phase.

In a note on Churchill’s results and the demand for properties like EKCP, Astaire Securities commented that whilst the loss was above its forecast of US$2.1m, given the stage of the project’s development, it is neither surprised nor concerned about this result.

The broker expects Churchill’s costs to be relatively subdued for the next quarter, whilst it finalises the economic modelling and comes to a decision on whether it is going to develop or divest the property. Additionally, Astaire Securities noted that since the start of the year, there has been a noticeable increase in the level of activity from Chinese and Indian parties wishing to acquire thermal coal properties.

In respect of its other activities, Churchill said it continues to evaluate development options for its Sendawar Coal Bed Methane Project in East Kalimantan, including joint venture discussions with a number of interested parties. While the development of the EKCP is the key focus of attention, it will continue to assess options to add value and diversification through Sendawar, Churchill stated.

Stratex reports encouraging gold sampling results at Megenta, doubles land portfolio in Ethiopia

Stratex International (AIM: STI) has doubled its Ethiopian portfolio to 3,142 sq km (square kilometres) while reporting encouraging geochemistry results from its Megenta gold discovery in the Afar region of the country, with chip sampling returning grades of up to 3 g/t (grammes per tonne) gold.

Shares in the company jumped 7.4% on the news.

The new exclusive exploration licenses (EELs) spanning over 1,562 sq km are located in the Afar region and in the Tigray area in northern Ethiopia, east of Stratex’ Shehagne gold project. The current EEL in the Afar epithermal district was extended by 666 sq km to take the total land package in the region to 2,245 sq km. The Tigray EEL covers 897 sq km of what the company said was “favorable ground.”

Stratex has commenced geological mapping and rock sampling over the Tigray concession with regional minus 200 mesh stream sediment sampling planned for Q2/Q3 2010. The company said that recent results from its Shehagne project and the interest shown by other companies including Sunridge Resources and Antofagasta Minerals in Eritrea highlighted the potential of the large tract of ground for early discovery.

Meanwhile, the samples from Megenta returned a high of 3g/t Au at only 20 metres below the paleosurface from a zone of chalcedonic silica veins; other results included values of 0.667 g/t gold and 0.525 g/t gold, which Stratex called “highly encouraging values for this high level of the system,” saying they indicated potential for a high grade system at depth.

“Having received encouraging geochemistry results from our Ethiopian gold discovery, Megenta, in the Afar region, we are delighted to further consolidate our ground position and utilise our early-mover advantage, in what we believe is an emerging gold region,” said executive chairman of Stratex David Hall.

The Megenta hot spring gold prospect will now be the focus of a six week detailed mapping and sampling programme aimed at defining drill targets for Q3 2010.

Stratex has increased its portfolio of gold assets in Turkey and Ethiopia to 1.17 Moz (million ounces) across all categories of JORC standard during 2009.

Petroceltic International raising £81m for appraisal work in Algeria and Italy

Petroceltic International (AIM: PCI) said it has conditionally raised £81m through the placing of approximately 635m new shares at 12.75p each. The proceeds will be used to support the company’s appraisal programme in Algeria and also fund drilling in Italy.

"Petroceltic is embarking on a six well drilling programme in the second half of 2010 across all areas of operations, with appraisal wells in Italy and Algeria, and exploration wells onshore Tunisia”, Petroceltic chief rxecutive Brian O'Cathain commented. 

“This placing will fund the appraisal programme to optimise development plans for our major discoveries on the Isarene permit in Algeria.  It also facilitates the drilling of a further well to determine the quality and extent of the oil discovery on the Elsa field in the Adriatic offshore Italy”.

The company noted that the placing was well supported and oversubscribed. The company’s brokers Mirabaud Securities and J E Davy carried out the placing to both existing and new investors. The new shares are expected to begin trading on London’s AIM market and the Irish Stock Exchange by 23 April, subject to a shareholder vote at a general meeting on the 21 April.

In Algeria, Petroceltic plans to begin an appraisal programme, consisting of three wells, on its Isarene Permit in the fourth quarter of 2010. The appraisal programme’s focus will be to determine the most likely recovery factors in respect of the previous discoveries of hydrocarbon resources on the permit. The programme is expected to enable the optimisation of development plans for Isarene.

Previously in February 2010, the company completed a highly successful five well appraisal drilling programme with four of the five wells drilled successfully testing at commercial gas flow rates, ranging from 4mmscfd (million standard cubic feet per day) to 33mmscfd.

Data gathered from the previous appraisal drilling suggests the presence of an extensive and continuous gas accumulation, Petroceltic said.

Isarene is being developed through a joint venture with and the Algerian oil & gas company Sonatrach. With a 75% working interest and 100% of the paying interest, Petroceltic is the primary stakeholder and operator of the permit. Sonatrach owns the remaining 25%.

In Italy, the company plans to appraise the Elsa discovery. In 1992 the Elsa-1 well logged a 65m oil column, and the proposed appraisal programme plans to drill and test the Elsa-2 well adjacent to the discovery. According to Petroceltic, independent reports

The company plans to appraise the Elsa discovery well in Italy by drilling and testing an Elsa-2 well adjacent to Elsa-1. reports on Elsa have attributed gross contingent recoverable resource up to 170 mmbbls (million barrels).

An environmental impact assessment for Elsa-2 was submitted to the Italian Ministry for the Environment in August 2009 and it is expected to be approved in the second quarter of 2010. Subsequently, drilling operations are planned to commence in September 2010.

Petroceltic holds a 70% working interest in the B.R268.RG licence area, which hosts the Elsa field.Petroceltic International (AIM: PCI) said it has conditionally raised £81m through the placing of approximately 635m new shares at 12.75p each. The proceeds will be used to support the company’s appraisal programme in Algeria and also fund drilling in Italy.

"Petroceltic is embarking on a six well drilling programme in the second half of 2010 across all areas of operations, with appraisal wells in Italy and Algeria, and exploration wells onshore Tunisia”, Petroceltic chief rxecutive Brian O'Cathain commented. 

“This placing will fund the appraisal programme to optimise development plans for our major discoveries on the Isarene permit in Algeria.  It also facilitates the drilling of a further well to determine the quality and extent of the oil discovery on the Elsa field in the Adriatic offshore Italy”.

The company noted that the placing was well supported and oversubscribed. The company’s brokers Mirabaud Securities and J E Davy carried out the placing to both existing and new investors. The new shares are expected to begin trading on London’s AIM market and the Irish Stock Exchange by 23 April, subject to a shareholder vote at a general meeting on the 21 April.

In Algeria, Petroceltic plans to begin an appraisal programme, consisting of three wells, on its Isarene Permit in the fourth quarter of 2010. The appraisal programme’s focus will be to determine the most likely recovery factors in respect of the previous discoveries of hydrocarbon resources on the permit. The programme is expected to enable the optimisation of development plans for Isarene.

Previously in February 2010, the company completed a highly successful five well appraisal drilling programme with four of the five wells drilled successfully testing at commercial gas flow rates, ranging from 4mmscfd (million standard cubic feet per day) to 33mmscfd.

Data gathered from the previous appraisal drilling suggests the presence of an extensive and continuous gas accumulation, Petroceltic said.

Isarene is being developed through a joint venture with and the Algerian oil & gas company Sonatrach. With a 75% working interest and 100% of the paying interest, Petroceltic is the primary stakeholder and operator of the permit. Sonatrach owns the remaining 25%.

In Italy, the company plans to appraise the Elsa discovery. In 1992 the Elsa-1 well logged a 65m oil column, and the proposed appraisal programme plans to drill and test the Elsa-2 well adjacent to the discovery. According to Petroceltic, independent reports

The company plans to appraise the Elsa discovery well in Italy by drilling and testing an Elsa-2 well adjacent to Elsa-1. reports on Elsa have attributed gross contingent recoverable resource up to 170 mmbbls (million barrels).

An environmental impact assessment for Elsa-2 was submitted to the Italian Ministry for the Environment in August 2009 and it is expected to be approved in the second quarter of 2010. Subsequently, drilling operations are planned to commence in September 2010.

Petroceltic holds a 70% working interest in the B.R268.RG licence area, which hosts the Elsa field.

Fe to commence drilling at Mt Elvire Iron Ore Project

Australian resources company Fe (formerly known as Buka Gold Limited) (ASX: FEL) plans to fast-track exploration of its wholly owned Mt Elvire Iron Ore Project.

The Project is located 130km north of the Koolyanobbing iron ore mines and 50km NNE of the Windarling iron ore mine, in the Yilgarn Iron Ore Province of Western Australia.

The Company has identified an Exploration Target comprising between 180M and 200M tonnes of Banded Iron Formation (BIF) mineralisation following a thorough review of all available data relating to the project, together with re-interpretation of recently acquired geophysical data.

The size of the Exploration Target was determined from interpretation of processed aeromagnetic data where more than 40 kilometres of highly magnetic units (interpreted as mineralised BIFs) have been identifed, and combined with results of rock chip sampling of outcropping BIF mineralisation and inferred to a depth of 50m below surface.

Best rock chip sampling results of outcropping BIF mineralisation to date include 63.25%, 61.95%, 60.83%, 54.46%, 52.48% and 51.94% Fe.

Outcrop is limited along the interpreted strike of the BIF mineralisation units, therefore the proposed RC drilling program will also target extensions of the mineralisation beneath shallow cover, where aeromagnetics indicate extensions to the highly magnetic units.

As part of the company’s plans to fast track exploration and development of the Mt Elvire Project it has appointed an Exploration Manager and Senior Technical Advisor to head up its exploration team.

Reconnaissance field work by the exploration team, to evaluate drill access, etc, will occur on site in the coming weeks, and a +2,000m RC drilling program is expected to commence soon after, with full details of the program to be released once confirmed, pending rig availability and regulatory approvals.

The Company currently has partial or total “iron ore” rights to over 3,000 square kilometres in the Mid West and Yilgarn Iron Ore Provinces of Western Australia.

While activities at the Mt Elvire Project are being fast-tracked, the company can confirm that it continues to review a range of opportunities at both the project and company level.

The review is designed to increase its portfolio of iron ore assets, particularly in the emerging Mid West and Yilgarn Iron Ore Provinces of Western Australia, where this is already existing or planned infrastructure associated with the mining, processing, transportation and export of iron ore.

Further gas shows for Golden State Resources at Paradox Basin #3

US oil and gas company Golden State Resources (ASX: GDN) has encountered further gas shows at the Paradox Basin # 3 production well, from 11,367’ to 11,378 feet in the Pennsylvanian Ismay Formation.
Gas levels reached 270 units in a mixed clastic formation. The show was associated with a two fold increase in rates of penetration. Porosity was described as "intergranular".
The Paradox Basin #3 is currently at 11,565’ and drilling ahead and likely to reach 12,000 feet tomorrow. Drilling did not recommence until Sunday due the requirement to run a milling tool and junk basket, following the failure of a stabiliser during the reaming run.
All the stabilisers have since been replaced. The hole is currently in good condition and operations are proceeding.
Gas levels reached 1453 units over zone 3 during reaming, and 1823 units whist running a junk basket, the well continues to show high operational gas levels. The gas influxes are considered by the company to originate primarily from Show 3 which occurred over a 42’ interval during a drilling break in limestone from 11,012’ to 11,054’.
Logging is expected to commence on Wednesday and take one day.
Logs will be sent to RPS Energy for preliminary petrophysical evaluation to confirm the presence of gas. Paradox Basin #3 will be then completed with 5” casing.
Data from the well will be more comprehensively evaluated by RPS Energy to assist in the design of the completion, testing and stimulation programme.

Korab Resources shares spike on Bobrikovo gold deposit resource upgrade

Korab Resources (ASX: KOR) has announced an update of the global resource at the Bobrikovo deposit located in Eastern Ukraine in the Lugansk Region within Nagolny Ridge.

As a consequence of the incorporation of additional data received after work on the initial resource statement commenced, the resource has been increased by 5% from 19.3 Mt to 20.2 Mt at 1.55 g/t for 1.012 million ounces. The global resource prior to the update was 0.96 million ounces.

The measured resource has increased by 77% from 0.939 Mt to 1.660 Mt at 2.05 g/t for 109,614 ounces. The measured, indicated and inferred resource includes a high grade component of 0.51 million ounces contained in 3.7 Mt of rock with an average grade of 4.30 g/t Au.

This includes 0.33 million ounces (2.23 Mt of rock grading at 4.6 g/t) in measured and indicated categories.

The updated resource model has confirmed the conclusions of the first model that Bobrikovo deposit remains open at depth and along strike offering excellent potential for substantial increase in resource. Additional drilling and trenching will be undertaken in 2010 to extend the mineralisation.

Following the strategic review undertaken in 2009, the Korab board has decided to seek a separate stock exchange listing on the ASX and overseas for Lugansk Gold Ltd. Following the IPO, Lugansk will continue to develop the Bobrikovo gold and silver mine located in eastern Ukraine.

On the basis of the company's discussions with European and North American brokers and investment banks, Korab expects that the IPO of Lugansk will seek to raise (in aggregate) between US$40 and US$50 million in new equity to fast-track the development of the Bobrikovo mine.

Out of this amount, approximately 4-5 million will be raised in Australia with the rest of the funds raised overseas.

Korab is currently finalising the documentation required to call an Extraordinary General Meeting (EGM) where Korab’s shareholders will be asked to approve the demerger and the in-specie distribution of free shares in Lugansk Gold to Korab shareholders at a pro-rata ratio of between 1 and 1.5 free Lugansk Gold Ltd shares for each Korab share held on the record date.

The record date is likely to be 7-10 days after the EGM which is planned for April 2010. Work on the Lugansk Gold Prospectus is well advanced and should be completed prior to the EGM taking place.

Lugansk Gold Ltd intends to use the funds raised under the proposed IPO to cover the construction of the processing plant and for working capital requirements. It is the intention of the company to achieve initial production of 60,000 oz of gold pa from Bobrikovo mine and to continue exploration at Bobrikovo while mining and processing of the resource classified as measured category is taking place.

This exploration program will aim to increase the JORC Code compliant resource to over 2 million ounces within the next 2 years. Mining of the oxide ore (corresponding to the measured resource) re-commenced at Bobrikovo gold mine last week. Production of gold and silver is expected to start in the second quarter of 2011.

Gold production cost is expected to be in the range from US$260 to US$280 per ounce.

Korab Resources shares rose 11% to 43 cents in trading today.

Dragon Mountain Gold encouraged by drilling results at Wa Wu Gou prospect

Dragon Mountain Gold (ASX: DMG) has announced the second set of assay results from the drilling at the Wa Wu Gou prospect within the Liba License for its Lixian Gold Project in Gansu Province, Central China.

The Wa Wu Gou prospect is located between the established Zhao Gou and Ma Gou gold deposits. Aqua regia results were received from the Tianshui Geological Group Assay Laboratory at Tianshui.

Composited intercepts show significant intersections above a cut-off grade of 0.5g/t Au. The results prove the continuity of the structure further west at +300m strike length.

DMG’s Executive Director, Mr. Robert Gardner said “this additional drilling from the second stage of this drilling program further enhances the Wa Wu Gou prospect. These results certainly are encouraging in the area, covering a considerable strike length of more than 800m.”

The drilling program was carried out using wire line triple tube diamond core equipment and was designed to explore along the projected strike length of the main Wa Wu Gou mineralisation.

The objective of the drilling program has been to examine the geological characteristics and continuity of the structures identified by previous mapping, trenching and surface sampling undertaken by Tianshui Geological Group, an exploration arm of the Gansu Non-Ferrous Metallurgical Bureau.

Capital Mining commences drilling in move to add to Cowarra gold resource

Capital Mining (ASX: CMY) has commenced drilling of the first hole in an 8 hole diamond core drilling programme at its 100% owned Cowarra Gold Project area near Bredbo, New South Wales.

The drilling has been designed to provide information aimed at making an addition to the currently defined JORC Inferred resource of 500,000 tonnes at 2.3 g/t gold, containing 37,000 ounces of gold at Cowarra as announced to the market on 20 August 2009.

Results of percussion drilling completed in 2005 by the previous Exploration Licence holder, Atlas Resources Pty Ltd, are being followed up.

The company said these results are encouraging and have included: 1m @ 43 g/t gold from 64m in hole CRC022-Victoria Lode; 6.5m @ 6.2 g/t gold from 39m in hole CRC001–Victoria Lode; 2.0m @ 14.4 g/t gold from 8m in hole CRC007–Princess Lode; and 4.0m @ 10.8 g/t gold from 69m in hole CRC029–Democrat Lode.

The current drilling is being targeted on high-grade gold-sulphide veins and shoots in shear zones and extensions of known gold mineralisation in and adjacent to historically defined mineralised blocks in the Cowarra mine above Four Level will be tested (i.e. up to 150m below surface).

The drilling comes on top of an ongoing exploration work programme in the tenement that has included reprocessing of geophysical data, surface geological mapping, rock chip sampling, survey control establishment and inspection of underground mine workings.

Encouraging signs of mineralisation were located along strike during the mapping and there are indications from a reanalysis of the airborne magnetic data that the mineral system has a considerable vertical extent.

This potential has been completely untested to date. The company said the drilling is expected to take several weeks to complete.

Sandfire Resources launches large exploration push at Doolgunna Copper-Gold Project

Sandfire Resources (ASX: SFR) has launched a new exploration program that could see six drill rigs operating at the Doolgunna Copper-Gold Project in Western Australia over the next six months.
Ranking as one of the larger programs, Sandfire will spend $8 million targeting new resources, new lode and new finds at Doolgunna by testing new VMS deposits in the areas near know deposits.  Total exploration budget for 2010 is $15-20 millon.
In 2009, the company released spectacular drilling results, inking a maiden JORC resource of over 7.13 million tonnes at 5.2% copper and 1.9g/t gold, ranking DeGrussa as one of the most significant global copper discoveries of 2009.
In February, Sandfire announced an equity raising and fully underwritten share placement to raise approximately $50 million and a share purchase plan of $15 million.
If required, the Company will secure additional drilling capacity over and above the three diamond drill rigs currently on site to deliver this program and expects at different times to have a further 1-2 diamond rigs and up to two Reverse Circulation (RC) drilling rigs operating.
“We have devised an extensive, sophisticated and fully-funded exploration program that will give investors the best possible opportunity of capitalising on the huge potential of our world-class land holding,” said Sandfire managing director, Karl Simich.
He said “At the same time, regional exploration will ramp up to test a host of highly promising targets generated by extensive airborne VTEM surveys and ground geophysical surveys."
"The large number of targets suggests that DeGrussa could be just the start of what is to come at Doolgunna. We expect this program to generate significant news flow over coming months.”

Alcyone Resources targets resumption of production at Texas silver project

Alcyone Resources Limited (ASX: AYN) has reported an update on its JORC compliant silver mineral resources totalling 15.1 million ounces at its 100%-owned Texas Silver Project in south-east Queensland.

The company has also provided an update on progress towards the resumption of silver production at the Twin Hills Mine later this year.

The estimation of the new mineral resource inventory marks the first critical milestone in Alcyone’s 2010 development plans for the Twin Hills Project. The company said It provides a strong foundation for other ongoing work programmes including metallurgical test work and the development of a new process flow sheet and mine plan.

Bulk sample analysis returned silver grades above the expected grade indicated by the mineral resource model and grade control information.

The JORC compliant Measured, Indicated and Inferred Mineral Resource inventory highlights include: above a 40g/t Ag reporting cut-off, of 5.9Mt @ 79g/t Ag for 15.1Moz of contained silver, comprising of 3.8Mt @ 83g/t Ag for 10.2Moz contained silver at Twin Hills; 2.1Mt @ 73g/t Ag for 4.9Moz contained silver at Mt Gunyan.

Over 85% of the resource inventory is in the Measured and Indicated categories and is available for conversion to Ore Reserves. Mining optimisations are now underway.

Subject to continued success with these work programmes, Alcyone is on track to finalise a new mine plan, process flow sheet and economic model for the Twin Hills Mine by the end of the second Quarter (Q2) of calendar 2010 with a target date for the resumption of operations at Twin Hills of the end of Q4 2010.

“The announcement of a 15.1 million ounce JORC resource is a strong result for Alcyone, reflecting a thorough and rigorous analysis of the historical data available from Twin Hills that has placed over 85% of the resource into the Measured and Indicated categories,” said Alcyone’s Managing Director, Andrew King.

“We have a high degree of confidence in the work that has been completed since Alcyone took over the Twin Hills Project in November last year. The new resource provides a very solid foundation for our plans to recommence production by the end of calendar 2010,” King continued.

“Metallurgical test work is progressing according to schedule with the initial 60-day trial nearing completion. In parallel with this, work has commenced on mine optimisation studies and we are also having preliminary discussions with various equipment suppliers and other contractors to establish restart procedures for key items of plant and equipment, keeping us on our pathway to production by the end of 2010.”

In parallel with this work, Alcyone has also commenced an assessment of the regional exploration targets within its 275 sq km tenement package, including the potential for both additional heap leachable silver deposits as well as sulphide base metal mineralisation.

Work on mine planning optimisations and economic modelling for Mt Gunyan will commence immediately on completion of the assessment of Twin Hills.

The Mt Gunyan deposit, has the potential to provide additional feedstock and increase the life and throughput of the Twin Hills operation.

The mineralisation at Mt Gunyan is relatively close to surface and on the sides of the hill which should be beneficial in relation to the stripping ratio and hence mining costs when the pit optimisations are undertaken.

Pacific Road agrees to acquire 10% stake in Carbon Energy

Carbon Energy (ASX: CNX) has announced that, after a period of extensive due diligence, Pacific Road Capital has agreed to acquire 10% of the company from CSIRO in an off market trade.

Pacific Road Capital may elect to transfer some of this position to an investor or investors in its funds.

Pacific Road is a private equity manager which invests in the global mining industry.  It manages and advises the US$320 million Pacific Road Resources Fund 1 which invests in mining projects, related infrastructure and services businesses, either as a direct investor or joint venture partner.

Pacific Road’s investment philosophy is one of active management, based on close collaboration with senior management of their investee companies.

It invests in projects and companies that can provide superior rates of return and applies its extensive resources industry operating experience, financial skills and broad network of contacts to help investee companies achieve this.

Carbon Energy’s Managing Director, Andrew Dash commented that “Pacific Road’s investment in Carbon Energy follows a six month comprehensive due diligence process, and is a strong third party endorsement of the company’s strategy and its UCG technology."

"We are particularly pleased to have Pacific Road as an investor as they bring to the table valuable business expertise as well as their access to networks and resources," he added.

Louis Rozman, Investment Director of Pacific Road Capital, will be invited to join the Board of CNX as a non-executive Director.

“We are pleased to welcome Louis Rozman to the Board of Carbon Energy where his knowledge and skills will complement the existing Board members. Of particular relevance is his experience as CEO and Managing Director of listed coal seam gas company CH4 Gas Limited from the feasibility, financing, construction, and stable production stages of the Moranbah Gas Project until CH4's merger with Arrow Energy in mid 2006."

"Louis has extensive experience in project development and operations, including power generation, on a number of resource projects around the world,” Dash said.

Pacific Road currently has investments in projects in the Americas (including two projects in Chile), Australia, Pacific and Africa with its primary focus on investment opportunities in resource rich regions where country risk is manageable.

Commenting on the transaction, Rozman said “We are very pleased to be acquiring a significant stake in Carbon Energy at this exciting stage of the company’s development. We believe that Underground Coal Gasification will play a significant role in the energy mix not just in Australia but around the world."

"Carbon Energy has world leading UCG technology and a sound business plan which has seen it take a leadership position in the commercial development of UCG in Australia and internationally.”

CSIRO’s original shareholding in CNX arose from the sale in November 2007 of its 50% interest in a joint venture company created to develop its intellectual property rights to UCG.

As a result of this transaction CSIRO acquired an 18.6% interest in the Company on 30 June 2008. CSIRO’s interest has since declined to 14.8% through a combination of dilution arising from subsequent share issues and the sale of 4 million shares on 15 June 2009.

Carbon Energy owns or has exclusive rights to all the intellectual property rights to CSIRO's UCG technology and will continue to work closely with CSIRO whose working relationship with Carbon Energy is not connected, formally or otherwise, with the status of its shareholding in the company.

Following the transaction Carbon Energy’s major shareholders will be: Incitec Pivot Limited, 11.3%; Pacific Road Resources Fund: 10.0% and CSIRO: 4.8%.

Carbon Energy’s other cornerstone investor and largest shareholder Incitec Pivot Limited (ASX: IPL), currently has board representation.

Stirling Resources managing director acquires more shares

Stirling Resources (ASX: SRE) managing director Michael Kiernan's Crawley Investments Pty Limited has topped up its holding in SRE, acquiring 65,024 shares in an on market purchases on 26 March 2010 at $0.12 per share.

Arc Exploration shares surge on drill results from Trenggalek gold prospect

Arc Exploration (ASX: ARX) has announced further encouraging drill results from its scout drilling programme at Trenggalek in East Java.

On 12 March ARX announced positive drill results from the first two holes (TRDD 1 and 2) drilled at Trenggalek. Since that time results of a further three holes have been received.

These latest holes, TRDD 3, 4 and 5, all located in the southern portion of the West Sentul Vein, total 295 metres.

All three holes returned narrow high grade gold (8-17 g/t Au) intersections from within broader moderate grade gold (4-6 g/t Au) zones hosted in the vein.

TRDD 4 and 5 were drilled perpendicular to the vein on the same section as TRDD 2 to test vein continuity to a depth of approximately 150 metres below surface.

TRDD 3 was drilled to the north from this section to intersect the vein at about the same elevation as TRDD 2 but approximately 25 metres further north along its strike.

Total reported meterage to-date is 550 metres or just over 10% of the 5,000 metre programme to be conducted this year to test and rank several prospects for further drilling.

TRDD 3 returned two separate 1 m intersections of 10.4 g/t Au & 21 g/t Ag and 10.2 g/t Au & 40 g/t Ag within a 9.4 m intersection of 5.27 g/t Au & 18 g/t Ag from 35.1 m down-hole.

TRDD 4 returned a 2 m intersection of 17.2 g/t Au & 13 g/t Ag within a 9.65 m intersection of 4.51 g/t Au & 8 g/t Ag from 111.35 m down-hole.

It also returned a separate 1 m intersection of 7.34 g/t Au & 10 g/t Ag within a 10.75 m intersection of 3.62 g/t Au & 9 g/t Ag from 127.95 m down-hole.

TRDD 5 returned a 1 m intersection of 8.10 g/t Au & 23 g/t Ag within a 9 m intersection of 4.91 g/t Au & 19 g/t Ag from 5.8 m down-hole.

The true-width of the mineralised vein in this part of the vein system appears to be consistent at approximately 6-7 metres.

The Company regards these results as very encouraging as they confirm the occurrence of high grade gold mineralisation surrounded by moderate grade gold mineralisation to a depth of at least 150 metres below surface in the southern part of the West Sentul Vein.

Mineralisation is open in both directions along strike and at depth. The vein textures observed in these recent intercepts are considered to be typical of strongly mineralised, high-level epithermal gold-vein systems described elsewhere in the Indonesian archipelago.

Arc Exploration shares rose 20% to 4 cents in trading this morning.

Blackham Resources raises A$1.5m to further Scaddan and Zanthus projects

Australian energy company, Blackham Resources (ASX: BLK) has raised $1.5 million by a private placement of 5 million ordinary shares at 30 cents per share to three parties.

The funds will be used for further drilling at Scaddan and Zanthus in Western Australia, as well as further mining studies, lignite upgrading and gasification testwork and optimisation to significantly add to the technical and economic confidence in both projects.

The issue of 5 million ordinary shares falls within the Company’s 15% capacity under ASX Listing Rule 7.1 and consequently, will not require prior shareholder approval.

Triton Gold appoints ex-Red 5 executive as new CEO

Triton Gold (ASX: TON) has announced that Allen Lance Govey has been formally appointed as Chief Executive Officer of the company, effective from 6 April 2010.

Govey has 35 years experience in the minerals sector with wide ranging involvement in successful exploration and mining geology within Australia, Indonesia and the Philippines.

Govey spent the last eight years with Red 5 Limited (ASX: RED) as Executive Director responsible for exploration and development studies at the million ounce Siana Gold Project in the Philippines.

The role spanned the entire exploration phase with the project progressing from scoping to final bankable feasibility studies, with development about to commence.

Red 5’s market capital increased from $5M to $120M over the period. Other roles included a significant contribution to Red 5’s public relations and investor relations function and related successful capital raisings.

The company said it believes Govey’s diverse experience and knowledge will assist Triton to achieve success within it’s greenfield exploration projects and aspirations for early development.

Greg Hall was actively involved in the recruitment of the new CEO. Hall will formally step down as Interim CEO, but will continue as the Interim Managing Director for the near term. Hall will assist in the hand over to Mr. Govey and will ultimately revert to his original position in the Company as Non-Executive Director.

Silver Lake Resources intersects high grade gold south of Lena Deposit

Silver Lake Resources (ASX: SLR) has announced an update on exploration activities at Moyagee, one of its Murchison projects.

Silver Lake’s accelerated exploration plan is targeting to significantly increase resources at Tuckabianna, Comet and Moyagee located in the Murchison District of Western Australia.

These projects have a combined resource of 7.8 million tonnes at 3.8 g/t Au for 1 million ounces. The 36 hole RC programme has been completed along strike south of the Lena deposit on 100 metre centres.

The drilling intercepted near surface, thick high grade mineralisation to the south for 1 km along strike and outside of the current Lena resource within the Lena shear.

The highlights are as follows: 7.0 metres at 2.7 g/t Au from 9 metres; 3.0 metres at 8.3 g/t Au from 16 metres; 2.0 metres at 6.9 g/t Au from 41 metres; 4.0 metres at 27.8 g/t Au from 90 metres - including 1 metre at 94 g/t Au from 92 metres.

“The Lena shear zone already hosts a large, high grade deposit at Lena. To extend the mineralised strike to 1.6 kilometres that is still open to the south and at depth is a significant outcome” said Silver Lake’s Managing Director Les Davis.

“These latest results provide further mining options for assessment and enhance the near term production potential of our Murchison projects.” Davis added.

The Moyagee Project contains 35 kilometres of the highly prospective Lena Shear zone.The Lena deposit is located in this shear zone and already has a resource of 820,000 tonnes at 8.5 g/t Au for 224,200 oz over a strike length of 600 metres.

The mineralisation commences within 9 metres of the surface and drill hole 10MORC016 intersected significant thick high grade mineralisation at 90 metres depth (4 metres at 27.8 g/t Au including 1 metre at 94 g/t Au).

The company said the next phase of the exploration programme at Lena South will be closely spaced infill drilling between the previously drilled sections.

Eleckra Mines survey identifies new gold anomalies at Yamarna Project

Eleckra Mines (ASX: EKM) has announced encouraging results from a close-spaced geochemical soil survey carried out in January-February 2010 at the Central Bore prospect at its 100%- owned Yamarna Gold Project.

The Yamarna Project is located approximately 150 kilometres east of Laverton on the eastern edge of the Yilgarn Craton and within the Yamarna Greenstone Belt in Western Australia.

The soil geochemistry program has defined multiple, up to a 0.6 kilometre-long, gold anomalies that contain elevated gold values up to 0.84 g/t Au, between 200 metres and 1 kilometre east of the recently discovered Central Bore high grade gold deposit.

The soil survey also confirmed the anomaly over the Central Bore gold discovery and identified possible northern extension further to the north along the strike.

The soil survey was a follow up to an earlier wide-spaced soil survey and a close-spaced survey on 20mE x 40mN at the Byzantium prospect (announced on 8th December 2009).

On 8 February 2010 Eleckra announced the strong 2.8 kilometre-long gold anomaly at Hann Prospect, 2.4 kilometres to the west of Central Bore gold discovery, with grades up to 2.1 g/t Au in the soils.

Eleckra now have three new high grade targets close to and surrounding the Central Bore high grade discovery from 2009. Eleckra said it intends to commence a 7,000-metre RC drilling program with targets at the Central Bore, Byzantium and Hann prospects in April 2010.

Golden State Resources sells iron ore interests for A$3m, plus royalty

Utah-focussed Golden State Resources (ASX: GDN) has struck a deal to sell its interest in the Johnson Range Iron Ore Project, in the Yilgarn region of Western Australia to a local subsidiary of US company Cliffs Natural Resources (NYSE: CLF) for A$3M.
Golden State will also receive a gross royalty of 2% on iron ore sales from the tenements as well as a 2% gross royalty on the sale of all other minerals transported from the project.
The A$3M will be paid to Golden State in the form of a non-refundable royalty prepayment and is payable on the execution of a formal agreement on or before April 30th 2010.
Richard Sciano, managing director of Golden State said, “after much consideration, and a review of a range of development opportunities, the board felt that Cliffs were a perfect choice to ensure the timely development of the Johnson Range Iron Ore Project.”
He said “We felt that Cliffs’ proven development and mining abilities would ensure the project was developed to the benefit of the Company and its shareholders, and allow the Company to focus its attention on the development of its other assets, in particular its Golden Eagle gas field in the US.”
Cliffs Asia-Pacific Iron Ore business unit operates the Koolyanobbing and Cockatoo Island mining operations which sold 8.5 million tonnes of iron ore in 2009.  The Johnson Range tenements adjoin Cliffs existing Yilgarn developments and can be developed to supplement exports via Esperance.
The sale will entitle Cliffs, an existing producer in the region, to contribute to the development of the Johnson Range Iron Ore Project and is seen as an ideal way to accelerate the project development.
The Yilgarn region of Western Australia is predicted to emerge as the second largest iron ore producing area in Australia, with existing infrastructure and port facilities at Esperance the area is well ahead of other emerging iron ore producing areas.

Manas Resources hits high grade gold at Shambesai prospect in Kyrgyz Republic

Manas Resources (ASX: MSR) has reported the final infill results from its Shambesai gold prospect in Central Asia’s Kyrgyz Republic.

Shambesai has again returned high-grade drill intersections and extensions to the margins of the mineralised zone on the company’s Isfairamsai licence. 

Recent drill results returned from infill drilling of the 1.2 kilometre long, 390,000-ounce Inferred Mineral Resource at the Shambesai prospect include: 13m at 1.66g/t gold from 84m and 6.9m at 11.4g/t gold from 126m in hole SHDDH177; 8.8m at 2.68g/t gold from 28m including 5.5m at 4.16g/t gold from 28m in hole SHDDH181 and 14.2m at 1.27g/t gold from 77m including 1m at 7.90g/t gold from 87m in hole SHDDH164.

These results are from the final round of assays of the now completed 92-hole program for more than 10,000m of infill drilling at the main gold mineralised zone of the Mineral Resource area at Shambesai.

Final results for the Shambesai West extensions are expected shortly and will be reported thereafter.

The company said these results have again shown outstanding potential for extensions to the estimated mineralised zone at Shambesai, and the Carlin-style mineralisation exhibits the potential for bulk tonnages with associated high grades zones.

Hole SHDDH177 has intersected two zones of mineralisation below the current mineralised zone, and hole SHDDH164 has intersected a zone of mineralisation approximately 100m to the south of the current resource model.

The aim of the infill drill program is to upgrade the resource status from Inferred, and to significantly increase the Mineral Resource at Shambesai by testing the flanks of the mineralised zone, wide-spaced drilled areas within it, and to test the western extensions.

The main Shambesai mineralised zone remains open at depth, and to the north, south and west
directions. Final results from the western extensions will be released shortly. The company said further drilling will be undertaken upon finalisation of the update resource estimate.

Genesis Resources targets high grade copper and iron

Manganese and iron focused, Genesis Resources (ASX: GES), will commence its helicopter Electromagnetic and Magnetite survey over the 100 per cent Genesis owned Alice Springs and McArthur River Projects in late April 2010.

The Alice Springs Project (EL24817 will have approximately 750 line kilometres flown at 150 metre line spacing and the McArthur River Project (EL24814) will have approximately 237 line kilometres flown at 100 metre line spacing.

The aerial EM and Magnetic survey will cover the four areas over the Alice Springs Project. The Survey will focus on delineating high grade iron and copper mineralisation.

Historical reconnaissance by Genesis has located very high grade copper and iron from the surface. The aerial EM survey over the Masterton 2 area, which is located within the McArthur River Project, will focus on delineating the dimensions of high grade manganese mineralisation below surface.

By determining this, Genesis will create a 3-D model of the potential mineralised zone to target during its proposed Reverse Circulation Drilling program.

In commenting on these upcoming programs, Pedro Kastellorizos, Managing Director, said “having commissioned GPX Surveys Pty Ltd to fly an aerial survey in the coming weeks, we are confident that targets will be generated from the survey to soon commence drill testing.”

“By completing these surveys, we are in a stronger position to target the potential source of the mineralisation at depth. We look forward to updating the market on further progress with the development at our Projects and to commencing the next stage in the process leading to the definition of an indicated resource.”

Sphere Resources appoints ex-Ferrexpo executive as COO

West-African focussed iron ore company Sphere Minerals (ASX:SPH) has appointed David Webster as chief operating officer of the company effective from 24 May 2010.
Sphere has three large scale iron ore projects in Mauritania.
Mr Webster worked from 2006 with Ferrexpo as chief operating officer, Ferrexpo produces and exports around 9 million tonnes of iron ore pellets per annum, and is the 6th largest pellet producer in the world.
He also has experience in mining project development also includes five years as Project Director with ProMet in Australia, and before that he spent 25 years with BHP Billiton, across a range of technical, operating and executive management roles in steelmaking and iron ore processing.
“David is a welcome addition to the Sphere team. He has extensive iron ore development and operational experience which will assist the Company in developing its 3Bt magnetite iron ore portfolio in Mauritania," managing director Alexander Burns said.

Medusa Mining intercepts high grade gold in Philippines

Medusa Mining (ASX, AIM: MML), through its Philippines operating company Philsaga Mining Corporation, has announced an update of the Co-O Mine surface drilling results for new holes MD 217 to MD 240 and some additional results from earlier holes received subsequent to the announcement of 17 December 2009.

The Co-O mine is located in a region of world class gold-copper deposits and south of the typhoon belt in the Philippines.

Highlights include hole MD214 1.7m @ 99.63 g/t Au and 6.4m @ 23.36; hole MD218 0.65m @ 58.66 g/t Au; hole MD 232 1.15m @ 35.18 g/t Au.

The Company is currently expanding its high grade Co-O Mine operations (Indicated Resources 580,000 ounces of gold inclusive of a Probable Reserve of 500,000 ounces of gold, and Inferred Resources 660,000 ounces of gold) to increase its forecast production to 100,000 ounces per year in 2010.

It is also conducting near mine exploration to assess the possibilities of further expansion to 200,000 ounces per year. Current cash costs at the Co-O Mine are approximately US$190 per ounce.

Geoff Davis, Managing Director of Medusa, commented “on-going drilling results continue to confirm the quality of the Co-O Deposit. Drilling will continue at the current intensity until around July when some rigs will be diverted to the Bananghilig Deposit."

"An updated resource followed by an updated reserve estimate is expected to be announced in the July-August period," he added.

The new MD series diamond drill holes from MD 217 to MD 240, totalling 11,262 metres, have been completed around the Co-O Mine since 9 December 2009. Results are awaited for MDs 236 and 240.

The on-going drilling programme has concentrated on infill and extensional (up & down dip and lateral) drilling in & around the Co-O Mine.

The drill hole results will be incorporated into a new resource estimate which is expected to be completed in July-August 2010.

Rambler Metals to raise £2.7 mln working capital as Ming mine construction starts

Rambler Metals & Mining PLC (TSX-V: RAB; AIM:RMM) said it plans to raise approximately £2.7 million before expenses through a private placing of up to 8.6 million shares at 32 pence each, or approximately C$0.50 per share.

The money is earmarked to serve as working capital as the company embarks on the construction phase required to bring its Ming copper-gold mine in Newfoundland into production following the signing of a US$20 million gold sale agreement announced on March 4 2010.

Rambler is planning to start production at Ming in 2011 following the environmental release of the project. The mine is located on the Baie Verte Peninsula. Ming is Rambler’s primary focus, and it was initially a copper play, however, an extensive exploration programme conducted by Rambler over recent years has increasingly identified elevated gold grades. In February 2009, a NI 43-101 compliant resource update, showed a total measured and indicated resource of 3.651 million tons grading 2.21 percent copper and 1.37 grams per ton of gold.
On March 4, Rambler announced a deal with Sandstorm Resources Ltd. (TSX-V: SSL) to sell a portion of the Ming mine’s ‘life-of-mine’ gold production for  staged upfront cash payments totalling US$20m, with the first US$5m available immediately.

“The agreement represents an attractive source of funding for Rambler allowing us to bring the Ming mine into production while still giving Rambler shareholders full upside exposure to 100% of the copper, silver and the majority of the gold production at the Ming mine", Rambler CEO and president George Ogilvie had commented.

Upon completion and delivery of a satisfactory NI43-101 feasibility study, a second instalment of US$2m will be paid to Rambler. The company expects to complete the study in the second quarter of 2010. The remaining US$13m, will be paid once the Ming mine has been awarded all necessary permits, anticipated in Q3 2010.

In return for the upfront payments, Sandstorm will be entitled to 25% of the Ming mine’s first 175,000 ounces of payable gold, and 12% of all payable gold thereafter. Initially the agreement will last for 40 years, and Sandstorm has the right to renew the deal for successive 10 year periods thereafter.

Norseman Gold director David Steinepreis buys 56,750 shares in company

Norseman Gold PLC (AIM, ASX: NGL) said it was notified that non-executive director David Steinepreis last week bought 56,750 shares in the company on the market for a total of A$39,965, and he now holds 4,313,857 shares in Norseman.

The company currently has three operating mines in Western Australia: Bullen, Harlequin and the developing OK Decline, with two more potential mines being explored and developed to fulfil the company’s strategy to fill its treatment plant to capacity, which is currently 60% utilized.

The company earlier this month reported progress from its fourth potential mine, North Royal, where the first round drilling on the southern end of the pit has returned promising results particularly around a footwall structure with follow-up extensional and infill drilling will commence this month. Mining is expected to commence by the last quarter of the 2010 calendar year.

Surface drilling operations that have recently commenced at the fifth potential mine, Crown Reef, intersected a structure in the expected position in the initial drill holes with assay results currently pending.

The Norseman gold project is located in the Eastern Goldfields of Western Australia in the highly prospective Norseman-Wiluna greenstone belt, 725 kilometres east of Perth and 186 kilometres from Kalgoorlie.

Currently, it has a total resource inventory of 20.0 million tons at a grade of 5.5 grams per ton gold for 3.7 million ounces of gold. The tenements cover a 1,614 sq km area centred on the Norseman Township.  The landholding comprises 179 contiguous tenements consisting of 13 exploration licences, 106 mining licences, 45 prospecting licences, 15 miscellaneous licences and 29 mining lease applications.

FTSE 100 seen higher ahead of US income and consumption updates

The FTSE 100 is projected to gain 0.25% in early trade today to recoup part of Friday’s 0.4% loss. Investors will be looking to US personal income and consumption updates, which are due out today.
US stocks closed flat on Friday. The Dow Jones Industrial Average, the broader S&P 500 index and the technology heavy NASDAQ composite all finished around the opening level.
Asian stocks were mixed today. Hong Kong’s Hang Seng climbed 0.9%, China’s Shanghai Composite Index rallied 1.9%, Australia’s S&P/ASX 200 and Japan’s benchmark Nikkei 225 were flat, while South Korea’s KOSPI declined 0.35%.
Communications group WPP (LSE: WPP) led the blue chips with a gain of nearly 3%. Oil and gas producer Cairn Energy (LSE: CNE) and commercial property company British Land (LSE: BLND) both gained 1.7%, while credit information group Experian (LSE: EXPN), property stocks Liberty International (LSE: LII), Hammerson (LSE: HMSO), plumbing and heating equipment manufacturer Wolseley (LSE: WOS) and clothing retailer Next (LSE: NXT) added slightly more than 1%.
Cable & Wireless Communications (LSE: CWC) and Cable & Wireless Worldwide (LSE: CW) were the heaviest fallers with losses of 23.3% and 7.8% respectively. Power generation company International Power (LSE: IPR) and hedge fund manager Man Group (LSE: EMG) followed, shedding more than 3.5%. Other notable fallers included Scottish & Southern Energy (LSE: SSE), which declined 2.2% and bank Standard Chartered (LSE: STAN) and oil and gas producer BG Group (LSE: BG) with losses of 1.7%.
Oil prices rose today with May Brent Crude reaching US$79.87/barrel, while US light, sweet crude improved to US$80.57/barrel.
Precious metals also did well as gold spiked to US$1,109/oz, while silver and platinum advanced to US$17.04/oz and US$1,602/oz respectively.
Base metals were higher with copper and nickel rising to US$3.45/lb and US$11.05/lb, while zinc climbed to US$1.01/lb.
Morning news wrap
In AIM, Turkey and Ethiopia operating gold miner Stratex International (AIM: STI) reported encouraging geochemistry results from its Megenta gold discovery in Ethiopia, where rock chip sampling returned up to 3.0 g/t Au - detailed mapping and sampling underway to define drill targets for Q3 2010.
Indonesia operating coal miner Churchill Mining (AIM: CHL) said pre-tax losses in the six months to 31 December 2009 narrowed to US$3.06 million from US$13.8 million for the equivalent period of the previous year.
Irish oil and gas exploration company Petroceltic International (AIM: PCI) has raised gross proceeds of approximately US$120.5 million through a placing of 635 million new shares at f 12.75 pence per share.