Friday, 27 August 2010

Edison Investment Research says Leni Gas & Oil could be a mid-tier player

Leni Gas & Oil (LON:LGO) has the potential to transform itself into a mid-tier E&P player, according to Edison Investment Research.

Edison said it considers LGO to be a ‘development and rehabilitation’ specialist and that it has a ‘large resource base’ given its junior status.

“We consider LGO to be undervalued. A conservative estimate based purely on shallow field resources at $2/boe would value the company at $80m, equivalent to 7.8p per share,” Edison stated.
The company research-house highlighted that the Hontomin-2 extended well test marks the start of an extensive development plan to evaluate the untapped oil and gas resources at Ayoluengo and in the surrounding concessions.

Edison said that LGO have significant prospects in North Spain, with its ‘best estimate’ of prospective recoverable resources at 120 million barrels of oil equivalent (mmboe) - with 56 million barrels of oil (mmbbls) and 383 billion cubic feet (bcf) for gas.

Earlier this week, on Wednesday 25th August, LGO spudded Hontomin-2, which will facilitate the extended well test.

The objective of the Hontomin programme is to appraise the long term production potential of the Hontomin-2 well. The programme is expected to take 4 weeks to drill-out and re-complete prior to monitoring production performance over the coming months.

City-Analysts upbeat after Biocompatibles’ strong interims

Biocompatibles (LON:BII) represents a very attractive investment in the medical technology sector,  according to Nomura Code’s  Michael King.

Describing yesterday’s interims and clinical trial results as ‘very encouraging’, the analyst reiterated his buy and 310p per share price target.

“With marketed products justifying the current valuation and the potential from the company’s longer term R&D projects ... Biocompatibles represents a very attractive investment in the sector with a well balanced risk profile,” King said in a note to clients.
The potential news flow over the next 12-18 months gives the Nomura drugs guru cause for optimism.

Of most interest is possible roll-out of Biocompatibles’ drug-eluting beads in China next year, and also  any progress across its clinical trials, King said.

Sam Fazeli, at City-broker Piper Jaffray, was also upbeat in his post results coverage of Biocompatibles.

He highlighted the fact that the first half performance was ahead of forecasts, and he expects the company to complete a profitable 2010.

“Biocompatibles offers a good-value lower-risk investment opportunity. Currently, around a third of its market value is accounted for by cash,” Fazeli wrote.

Based on the company’s growth potential, and peer analysis, Piper Jaffray estimated Biocompatibles enterprise value at £134.6m, which it says equates to a market cap of £160.5m, or 410p a share.

Currently Biocompatibles is trading at 260p – unchanged on the day.

“Given the estimated growth potential of Biocompatibles is higher than the 10% median [for its peers] ... we believe the stock should trade on at least a 30% premium to the peer group,” Fazeli said.

Yesterday’s impressive results, revealed a 22% jump in total revenue jump, or 24% at constant currency to £17 million as Bead products revenues increased 38% to £9.3 million. Most importantly, the company made a profit of £1.2 million after posting a £0.7 million loss in H1 2009.

Overall, the company was pleased with the results, particularly the strong revenue growth, and expected to continue trading profitably.

Biocompatibles also gave investors a boost with positive news from its DEBIRI (Drug-Eluting Beads loaded with irinotecan) clinical trial.

The company announced the presentation of Phase I/II data in a clinical trial evaluating DEBIRI (Drug-Eluting Beads loaded with irinotecan) in liver metastases from colo-rectal cancer and FDA approval for continuing the clinical trial into a randomised Phase IIb.

The data was presented at the World Congress for Gastro-Intestinal Cancer in Barcelona in July for ten patients
with unresectable liver metastases who had received no prior treatment and who had been treated with the combination of the FOLFOX chemotherapy regimen and DEBIRI.

Five of the ten patients were down-staged to a potentially curative surgical treatment.

Associate Professor of Surgery in the Division of Surgical Oncology at the University of Louisville Robert martin, who was presenting the data, described the treatment regime as “safe and effective with superior surgical downstaging”.

With the FDA approval secured, 60 patients will now be randomised for treatment with the FOLFOX or FOLFOX and DEBIRI.

Biocompatibles noted that while FOLFOX was a standard of care that has been shown to extend survival, the liver metastases still progressed with systemic chemotherapy unless surgically removed.

The primary end-point is tumour response with secondary end-points including safety, progression free survival and overall survival. Results are expected in 2012.

“And while FOLFOX is a systemic treatment, DEBIRI is a catheter-targeted local treatment - so there is a good rationale to explain the increase in the number of patients in this trial who were down-staged to resection and a potential cure. These are very promising results. And following the NICE rejection of Avastin this week, patients do now have another option to discuss with their doctor,” said Simon.

DEBIRI with DC Bead has been approved for use in the UK and 30 other countries

Rightmove Posts a Sharp Rise in First Half Earnings

Rightmove (LON:RMV) posted a 40 per cent rise in earnings as the cost-conscious estate agents continued to move business onto its website.

Underlying operating profits were £27.9 million in the first half  as revenues increased 26 per cent to £42.3 million.

It is sitting on a cash pile of almost £23 million after selling its holiday letting business, which has allowed the company to resume its share buyback programme and pay a plump dividend of 5p a share, up 67 per cent on the year earlier.

Traffic on the Rightmove site rose 22 percent to 3.9 billion page impressions. The company said trading in July and August was in line with the first half, giving it confidence that revenue would continue to rise, despite an uncertain outlook for the housing market.

"We do not believe that such an outlook need be materially affected by flat or modest falls in house prices, provided that transaction volumes do not take a sharp downward turn and cause our customers to cease trading," Rightmove said.

The number of advertisers rose 7 per cent to 17,993 in the six months to the end of June, while spend per advertiser advanced 20 per cent to £365 a month.

Noventa's new Tantalum find is pretty significant, says Collins Stewart

Shares in Noventa (LON:NVTA) jumped almost 5 per cent yesterday, after the Mozambique-based miner said it had uncovered an additional deposit of Tantalum bearing ore on its Marropino licence area.

John McGloin, head of mining at the City broker Collins Stewart, reckons the discovery is “pretty significant”.

If proved up, it could allow the company to expand beyond the existing Marropino tantalum mine without too much cost, the analyst told Proactive Investors.

McGloin said Tantalum is “one of the best stories out there in terms of supply and demand” as he emphasised the positive economic trends for the rare metal.

Global production of tantalum, which is used to manufacture high-end electronic capacitors for mobile phones, has been limited since the closure of major mining operations in Australia.

The Wodgina mine in the Pilbara region of Western Australia closed in 2008 even though it was the world’s largest tantalum mining operation, supplying 30 per cent of global demand.

Among the publicly-quoted tantalum-focused juniors, McGloin reckons “Noventa is probably the best placed” to profit from this acute lack of supply.

He points out that the company is already in production and it seems to have successfully worked through its legacy issues following the appointment of corporate fixer Eric Kohn.

Yesterday, the shares rose 0.34p to 7.46p, and have advanced more than 23 per cent in the past 12 days.

In Wednesday’s statement Kohn described the discovery as “very encouraging”.

"Once we have independently evaluated the results from the preliminary sampling, a further sampling programme will be planned to accurately define the shape, potential tonnages and grades of the discovery,” he told investors in a statement to the stock exchange.

"This has the potential to form a significant addition to the existing mineral resource, extending the life of Marropino."

The discovery is part of Project Ligonha, announced on June 23, which will complete the preliminary geological evaluation of Noventa's current mining concessions and to provide improved mapping of the firm's exploration licence areas in Zambezia Province of Mozambique.

The company said that the discovery is an area of soft rock -approximately one kilometre square, located two kilometres to the south east of the Marropino Mine. 

It added that indications from initial sampling have been encouraging. 

Independent assays have been instructed and a further announcement will be made once they are complete. 

If the find is confirmed, it is expected that this could provide up to twelve months of feedstock for the Marropino plant at the full anticipated production level of more than 500,000lbs of tantalum pentoxide per annum.

Also this week Noventa reported good news from its flagship Marropino mine as it announced an earlier than expected shipment of tantalum to one of the company’s two key customers.

Production from the Marropino mine has so far been at higher than expected levels, which enabled the company to make the earlier than planned delivery.

The 8,000 kilogrammes of tantalum is set to leave the Qualimane port in Mozambique on August 24. The shipment is expected to confirm logistics pathway for future shipments as well as revise and adjust shipping routes and procedures ahead of the commencement of full production at Marropino in 2011.

Back in July, Noventa reported that tantalum recovery at Marropino had increased significantly over historic levels, reaching 51%.

Before May 2009, the mine achieved recovery rates between 30% and 35%.

The mine re-started operations in April 2010, after spending just under a year on care-and-maintenance.

Wednesday, 25 August 2010

Pan African Resources upgrades FY-2010 EPS forecasts further

In accordance with JSE listing rules, Pan African Resources (LON:PAF) has provided a further upgrade to its earnings forecasts for the year ended 30th June 2010.

The company now expects to report GBP earnings per share (EPS) at a level between 159-162% higher than the previous year, due to greater-than-expected gold sales at the end of June, and a lower-than-expected foreign exchange (ZAR:GBP) rate. In H109, Pan African Resources reported EPS of 0.4p.

Pan African Resources’ audited full-year results are due for release on the 31st August 2010.
Previously, on the 23rd June, the company initially told investors that its results would be ahead-of-expectations. Headline EPS is expected to have risen between 16-26%, from the 0.85p reported for the previous financial year.
Pan African has two primary assets -  the Barberton gold mining complex and the Phoenix platinum project in South Africa. The Barberton mining complex consists of three mines: Fairview, Consort and Sheba.

Tullow Oil's “strong results” supported by rising oil prices

A 30% increase in average prices put a gloss on Tullow Oil’s (LON:TLW) interim results, with the Irish oil and gas company reporting today pre-tax profits of $89m (1H09: $31.3m) despite a 6% drop in production.
Tullow described its performance as strong, and said the results were in line with market expectations.
Overall average realised prices - for oil & gas combined - increased by 30%, while the Tullow’s realised price per barrel was 45% higher at US$77 (H109: US$53).
The company highlighted that whilst production has dropped in the period, it expects to achieve “first oil” in Ghana during the coming months and consequently it sees “significant production growth and increased cash flow” in 2011.
"Tullow has continued to make strong progress in the first half of 2010,” Tullow Chief Exec Aidan Heavey said.

“Our exploration and development programmes are delivering excellent results with significant new oil discoveries being made in both Ghana and Uganda and first oil from Jubilee expected before year-end ... We look forward with confidence to a promising second half of the year and strong performance overall in 2010."

The company upped its full-year production forecast to 57 - 58,000boepd (barrels of oil equivalent per day).

Rockhopper Exploration plugs and abandons Ernest well, set to test Sea Lion discovery

North Falkland Basin operating oil and gas explorer Rockhopper Exploration (LON:RKH) is preparing to flow test its Sea Lion discovery well after plugging and abandoning the Ernest 26/6-1 exploration well.
Ernest 26/6-1 proved to be a dry hole after all logging runs were completed.
The Ocean Guardian drilling rig will now proceed to the Sea Lion location where the company will carry out a flow test on the Sea Lion discovery well 14/10-2 after submitting the final design of the test programme to the Falkland Island government.
The Sea Lion well has so far been the sole success of the widely anticipated and closely followed drilling campaign in the Falklands. Analysis performed on the well in June showed that it had discovered medium gravity oil.
The analysis of the discovery confirmed the first contingent resource in the Falklands, and upped the recoverable resource estimates from 170 mmbbls (million barrels) to 242 mmbbls.
Rockhopper believes that the well has opened a fairway to licenses PL032 and PL033 and will now test the well “at the earliest opportunity” during the current campaign.
The flow test is expected to give an early indication of the production potential of the reservoir sands and will be a key part of the planning process required to move forward to full appraisal and possible development programmes.
The news didn’t have much of an impact on the company’s share price and the stock was little moved this morning.
The wider Falklands play is made up of two separate basins, the North basin and the South basin. Rockhopper and Desire Petroleum (LON:DES) have been drilling their interests in the North basin, and Borders & Southern (LON:BOR) and Falkland Oil & Gas (LON:FOGL) have prospective interests in the South Basin.
Recently, another company entered the fray, with Argos Resources (LON:ARG) joining London’s AIM market. Argos owns a number of prospective interests in the North Falkland basin, and with the support of a recent £22m fundraising it plans to identify drill targets with a 3D seismic acquisition slated for 2011.

Leni Gas & Oil spuds hole for Hontomin well test

London headquartered international oil and gas exploration, development and production company Leni Gas & Oil (LON:LGO) has begun drilling and spudded the hole for the Hontomin extended well test in northern onshore Spain.
The objective of the Hontomin programme is to appraise the long term production potential of the Hontomin-2 well. The programme is expected to take 4 weeks to drill-out and re-complete prior to monitoring production performance over the coming months.
Electric wireline logging and perforation of the existing hydrocarbon intervals and other potential undepleted zones is scheduled for September/October to assess the full production potential of the structure.
All of the test production from Hontomin will be transported to the central production facilities at the Ayoluengo operations base for processing and oil sales.
The Hontomin prospect is a proven Lower Jurassic Lias Calcarenite hydrocarbon formation discovered by Chevron (NYSE:CVX) in the 1960s and initially tested at an initial rate of 700 bopd (barrels of oil per day).
LGO targets growth through the acquisition and enhancement of proven reserves and producing assets in low risk countries. The company has a broad range of projects in its portfolio, with assets in the US Gulf of Mexico, Spain, Trinidad, Hungary and Malta.
Edison Investment Research has estimated that LGO’s Spanish assets along with its interests in the Gulf of Mexico (GoM) and Trinidad, can attribute recoverable resources of 40 mmboe (million barrels of oil equivalent). If the deep-plays on the three projects and the Malta assets are included, LGO may have over 575 mmboe in unrisked resources.
Back in July, the equity research specialist stated that LGO had the potential to transform itself into a mid-tier exploration and production (E&P) company over the next two or three years.

European Nickel appoints HDI representative John McManus to the board

European Nickel (LON:ENK, ASX:ENK) has appointed John Wallace McManus to its board of directors, where he will represent the Hunter Dickinson group (HDI) - a major shareholder and strategic partner.
The company recently agreed the partnership with HDI, which saw the Canadian firm invest US$60m in European Nickel in return for a 27% equity stake.

The company highlighted that McManus has over 28 years experience in the mining industry and he is the Senior Operations VP at HDI’s Taseko Mines.
At Taseko, McManus has managed a $300m production expansion at the Gibraltar Mine, oversaw a 200% increase in ore reserves and he was involved in successfully establishing an $800m Gibraltar joint venture with a consortium of Japanese traders and smelters.

“John's wealth of operational experience will complement our management team as we deliver the Çaldağ project through development and construction into productionThe HDI partnership was established in July, and at the time European Nickel noted the benefits of the deal. The company said that it gained more than the much-needed cash boost, with the tie-up also providing access to a whole array of expertise that would be difficult and expensive for a small miner to recruit.

ENK’s flagship asset is the Çaldağ project, which offers near-term nickel production and will be one of the largest foreign direct investments in Turkey's mining industry. With proven JORC reserves of 33.2Mt (million tonnes) at 1.13% Ni, the mine is targeting 20,000 tonnes per annum of nickel production over a 14 year life of mine.

Using low cost, environmentally friendly, heap leach technology, it anticipates a net cash operating cost of US$3.59 per pound of nickel and project capital expenditure of US$277 million, which equates to a capital cost per annual pound of nickel of US$6.12. The project's NPV is US$490 million, at a 10% discount rate, with an internal rate of return of 32.4% at a nickel price of just US$7 per pound.

Caza Oil & Gas results from Matthys-McMillan Gas Unit #2 well reduce risks, signal opportuities

The latest results from Caza Oil & Gas’ (LON:CAZA)Matthys-McMillan Gas Unit #2 well in Texas showed that it could produce from multiple sands in the area, reducing exploration risk and providing more development opportunities.
Log and seismic data have previously indicated that the Yegua interval could be productive in the well, which prompted Caza to perforate at a depth of nearly 9,500 ft (feet) in the Yegua sands. Caza then completed the well in the Yegua sands and performed fracture stimulation.
Since the frac was completed, the well has been producing a gross average of 146 barrels of condensate and 1.1 mmscf (million cubic feet) of natural gas per day.
Caza was encouraged by the results, saying they highlighted the well’s potential for production from multiple sands in the area, reducing its exploration risk and providing further exploration and development opportunities on its leases.
“We are pleased to have positive production news on the Matthys-McMillan #2 well...we are working towards placing the well on full production in the near future,” said Chief Executive of Caza Oil & Gas Mike Ford.
The company is now planning to install permanent production equipment, including a gas lift system in hopes to increase current production levels.
Caza has a 19.61% working interest and a 14.32% net revenue interest in the well.
Earlier this month, the company saw its share price double after logging results from its OB Ranch 1 well on the Bongo field showed the company hit a pay zone measuring more than 100 feet containing gas and gas liquid at depths of between 12,400 and 12,900 feet.
The gas was found in the Cook Mountain sands, while Yegua appeared to be holding additional high-value potential.
Caza’s strategy differs from that of other companies as instead of acquiring exploration acreage and commissioning expensive seismic, Caza struck a deal with specialist seismic contractors to get cheaper access to seismic data. Caza chairman John McGoldrick has said his company has “probably the biggest database of just about any independent”.
As at June 30, the group had cash of US$9.3 million, which it said was enough to meet its current needs.

Noventa Uncovers Exciting New Tantalum Deposit

Miner Noventa (LON:NVTA) today told investors that it had uncovered what could be a "significant additional deposit of Tantalum bearing ore on its existing Marropino licence area" (Mozambique).

The discovery is part of Project Ligonha, announced on June 23.

Chairman Eric Kohn said: "This discovery is very encouraging.
"Once we have independently evaluated the results from the preliminary sampling, a further sampling programme will be planned to accurately define the shape, potential tonnages and grades of the discovery.

"This has the potential to form a significant addition to the existing mineral resource, extending the life of Marropino."

Project Ligonha -  a three month project - was conceived to complete the preliminary geological evaluation of Noventa's current mining concessions and to provide improved mapping of the firm's exploration license areas in Zambezia Province of Mozambique.

The company said that the discovery is an area of soft rock -approximately one kilometre square, located two kilometres to the south east of the Marropino Mine. 

It added that indications from initial sampling have been encouraging. 

Independent assays have been instructed and a further announcement will be made once they are complete.  If the find is confirmed, it is expected that this could provide up to twelve months of feedstock for the Marropino plant at the full anticipated production level of more than 500,000lbs of tantalum pentoxide per annum.

This week Noventa reported good news from its flagship Marropino mine as it announced an earlier than expected shipment of tantalum to one of the company’s two key customers.

Production from the Marropino mine has so far been at higher than expected levels, which enabled the company to make the earlier than planned delivery.

The 8,000 kilogrammes of tantalum is set to leave the Qualimane port in Mozambique on August 24. The shipment is expected to confirm logistics pathway for future shipments as well as revise and adjust shipping routes and procedures ahead of the commencement of full production at Marropino in 2011.

Back in July, Noventa reported that tantalum recovery at Marropino had increased significantly over historic levels, reaching 51%.

Before May 2009, the mine achieved recovery rates between 30% and 35%.

The mine re-started operations in April 2010, after spending just under a year on care-and-maintenance.

Allocate Software hires General Manager for Australia and New Zealand

Allocate Software (LON:ALL) has hired Peter Croft as its new General Manager for Australia and New Zealand. The company highlighted that the appointment coincides with an accelerated international expansion, focusing on securing major deals in the region.

“We have established a significant presence in multiple sectors across Australia and New Zealand, with further expansion plans to extend activities across this region ... [the] appointment builds on the strength of the management team and demonstrates our commitment to significantly broadening Allocates operations on a global scale", Allocate Chief Executive Ian Bowles commented.

The newly appointed manager will be responsible for all of Allocate's commercial activities in Australia and New Zealand.
"[Allocate] has an excellent track record for delivering real and lasting change to a wealth of different organisations,” said Peter Croft.

“I look forward to working with the team at Allocate, furthering the Company's ability to help organisations across Australasia drive efficiencies from their workforce while maintaining optimal service delivery, through implementation of Allocate's solutions."

In its interim results, earlier this month, Allocate reported a 39% increase in revenues with trading profits up 38%, fuelled by a growing customer base in both the UK and internationally.

The healthcare workforce-optimization software provider has already won significant contracts in Australia and New Zealand, landing a deal with the Royal Australian Army, and becoming preferred supplier for the State Government of New South Wales.

Plant Impact Lands Syngenta Deal in Brazil

Plant Impact (LON:PIM) announced this morning that it had teamed up with Syngenta Brazil to carry out field trials on its ecologically friendly crop nutrition and protection products CaT and PiNT.

The two will be used on corn, cotton and coffee crops as part of what the company calls a “significant programme”. However the study will initially focus on 4,000 hectares of soybean production.

Plant Impact has received “resource commitments” from Syngenta, while a large number of local farmers will take part in the trials.
Once the programme is completed it opens up an initial target market of three million hectares of soybean production, one million hectares of corn and 300 hectares of both cotton and coffee.

However this just scratches the surface as Brazilian farmers grew around 21 million hectares of soybean, 14 million hectares of corn, two million hectares of coffee bean and one million hectares of cotton in 2008.

Plant Impact will receive support for its programme from EMBRAPA, the state-owned agricultural research company.

EMBRAPA will conduct official independent trials into important Brazilian crops and provide further support for the registration of Plant Impact's technologies, the company said.

Chief executive Peter Blezard said: "This is an excellent development for the company.

“Brazil is a very important agricultural country and for Plant Impact to have key partners in such a significant agricultural market is tremendous news.

“Plant Impact started developing commercial relationships with the Brazilian market last year and the field trials with Syngenta is evidence of the progress made to date".

Monday, 23 August 2010

Goldplat receives green-light for Kilimapesa Hill’s gold production

Goldplat (LON:GDP) told investors that it expects the Kilimapesa Hill gold mining project  to reach its full processing capacity by early September, after it received the green light to begin commercial production from existing stockpiles,  while the mining lease is being finalised.

The company received permission to start commercial production from the Republic of Kenya’s Commissioner for Mines and Geology, after it was previously granted conditional approval in July.

"Naturally we are delighted that we have been given the green light by the Commissioner  ... Our near-term objective remains the establishment of a profitable small mine producing circa 5,000-6,000 oz of gold per year within 12 months of being issued the Mining Licence”, Goldplat Chief Executive Demetri Manolis said.

At Kilimapesa work is already underway to re-commission the processing plant, which is expected to be at a full processing capacity of 1,000 tonnes of ore per month by early September 2010.

Goldplat noted that Kilimapesa’s underground operations will be kept in abeyance until the routine registration of the cadastral survey is complete, and the mining lease has been granted. Kilimapesa’s existing ore stockpiles are expected to provide enough mill feed until full underground mining operations resume.

Previously, in July, Kenya’s commissioner for Mines and Geology said that the Kilimapesa Hill project represents the start of a new era for the gold mining industry in Kenya.

The project is located on the historically producing Migori Archaean Greenstone Belt, in western Kenya. Back in October 2009, Goldplat completed Kilimapesa’s maiden JORC resource estimate, in with 401,000 tonnes grading 2.39g/t (grams per tonne) of gold for 31,416oz in the Measured category, a  Measured and Indicated resource of 41,000 tonnes at 2.56g/t gold for 3,400oz for a total underground resource of 1.65Mt at 2.44g/t gold at 2.44g/t for 129,000oz.

Red Rock Raises Another £300,000

 Red Rock Resources (LON:RRR) said it has issued 15 million new shares to raise £307,000.
It is the third such cash call in the space of six weeks.

The latest injection of funds will be used for ‘general working capital requirements’, the company said in a statement to the stock exchange.

On August 12 it issued 13.7 million shares to YA Global SPV, brining in £300,000 and on July 7 YA acquired 15 million new shares for just under £243,000.

Led by Andrew Bell, Red Rock has gold operations in Colombia and Kenya.
It also has a 23 per cent investments in Jupiter Mines Ltd (ASX:JMS), an Australia listed ‘steel feed’ tie-up with Brian Gilbertson’s Pallinghurst Resources and Korean giant Posco, which has the potential to become a major mover in a quickly consolidating markets.

And there’s the 26 per cent stake in Resource Star (ASX:RSL), which has uranium assets in Australia and Malawi, but has also discovered en vogue rare earth elements that are used in sustainable energy and electronics, and are rarely found outside China.

Its El Limon gold mine, one of the oldest in Colombia, could be in full production in three months once the surface plant is up and running.

Three hundred metres deep, the mine is producing 100 tonnes a month at a grade of five ounces per tonne, Bell says.

“We can go up to maybe 100 to a 110 tonnes a day processed through a plant properly which will be at a head grade of perhaps wo-thirds of an ounce per ton and that can be done quite quickly,” the Red Rock chief executive told Proactive Investors recently.

Hortizonte's US$4.5 million Tie-up With AngloGold Ashanti

Horizonte Minerals (LON:HZM) has signed a US$4.5 million earn in agreement with AngloGold Ashanti (JNB:ANG) to develop its Falcao gold project, located in the Carajas mineral province of northern Brazil.

Under the terms of the deal Horizonte will receive US$900,000 exploration funding in the first year, followed by US$1.6 million in the second year and U$2 million in the third.

Drilling will also be fast-tracked to test the potential of the resource. If all the milestones are hit, then Anglo will end up owning 51 per cent of the project.

"This is yet another exciting transaction for Horizonte,” said chief executive Jeremy Martin.

“The Falcao project is a significant gold anomaly in the southern part of the Carajas Province defined by previous exploration work carried out on the property.

“There are multiple gold intersections from wide spaced historic drilling undertaken by the previous operator and this data supports the model that Falcao has the potential to host a major gold deposit.

“The earn-in agreement with AngloGold will allow a fast track drill programme to test the resource potential of the project.”

Falcao was a originally a BHP Billiton grassroots discovery that was identified by regional stream sediment sampling.

The AngloGold tie-up is the second significant transaction in the space of a month. On July 27 Horizonte took full control of the Araguaia nickel project in the Carajas region of Brazil currently owned by Teck Resources (TSX:TCK) and merged it with its neighbouring Lontra development.

It created at a stroke a 100 million tonne high grade resource which could, over time, creep up to 150 million tonnes and even 200 million tonnes, according to Horizonte boss Martin.

In return the Canadian giant got a 50 per cent stake in an enlarged Horizonte, worth around £7.5 million.
Horizonte also raised £5.1 million by issuing shares at 10p each.

Golden Silence Prospers as Investors Digest Novartis Deal

Shares in Silence Therapeutics (LON:SLN) rose 20 per cent as the market continued to digest the news the group could earn as much as $65 million from a collaboration deal with Swiss giant Novartis (VTX:NOVN).

The focus of the study will be QPI-1002, an experimental kidney drug discovered by Silence, but licensed to American firm Quark.

The treatment is now being taken into phase II clinical trials.

The $65 million is Silence’s slice of a potential $680 million windfall of potential milestone payments and royalties negotiated by Quark.

Quark will receive $10 million up front. However it is not known how much of this sum will trickle down to Silence.

An injection of funds would go a long way to filling a potential funding shortfall predicted in the second quarter of next year.

Silence gets the name because its expertise is 'gene silencing', also known as siRNA technology.

This is a way of controlling or shutting down some of the 40,000 genes in the human body. It copies the body's own method of fighting a virus.

In theory the process could be used to tackle cancers and other diseases that traditional chemistry and biotechnology have failed to eradicate.

However there are just a couple of hurdles that need to be overcome with this cutting edge science.

First, the ‘siRNAs’ have a nasty habit of creating flu like side effects and second, they require a delivery technology to get them to the parts of the body where they are needed.

On both counts Silence is well ahead of the competition so far as the intellectual property, the delivery and the side effects profile are concerned.

Silence chief executive Phil Hayworth said of the Novartis collaboration: ‘We are delighted that Novartis has chosen to take this development option for QPI-1002.

‘This serves as further validation of Silence's leading AtuRNAi technology and we look forward to receiving the significant milestones as the development of QPI-1002 continues.’

At 1:00pm, Silence was up 1.2p or 20 per cent at 7.2p. The rise in the share price builds on yesterday’s momentum and comes amid reports that an overhang of 10 million shares has been cleared.

Straight Maps Out Expansion Plans

Waste and recycling group Straight’s (LON:STT) £2.9 million acquisition of manufacturer  Dyro Holdings earlier this week could be followed by a number of other deals, according to founder and chief executive Jonathan Straight.

He told Proactive Investors that he plans a series of ‘initiatives’ designed to get the share price moving.

Explaining why he opted to take on £1.5 million of bank debt instead of issuing new equity, he said: ‘We see our share price as undervalued.

‘The dilution wouldn’t have been appropriate.

‘We see this (deal) as one of a number of initiatives to increase the value of our shares.

‘Once we are comfortable with the valuation we do intend to go back to the market and raise money to fund further developments and acquisitions.’

Straight has made no secret of the fact he wants to create “a £100 million company”.

Last year the Leeds based group, which makes wheelie bins and compost tubs for local authorities and retailers such as Wickes, turned over nearly £24 million.

And while Straight wasn’t prepared to discuss in detail his expansion plans, he gave some very broad hints.

‘There is further vertical integration planned that will involve additional manufacturing facilities for us,’ he said.

‘We will also look at other market areas we are interested in and we will continue to pursue those opportunities as they arise.’

The group is also attempting to broaden its retail base with councils under intense pressure to make spending cuts.  

‘It gives us an insurance policy in case we see some back-peddling on the local authority spending.

‘The signs at the moment are that this is not happening, although we haven’t had the spending review yet.

‘We are as confident as we can be that what we are doing will be below the radar.

‘We see a lot of the infrastructural development in waste management continuing because the targets require by legislation haven’t gone away.’

Dyro was a very shrewd acquisition. The Hull-based manufacturer owns Powell Plastics, which makes Straight’s products.

So in buying the business Straight is securing production capacity, while boosting the company’s profitability

Broker Astaire has raised its earnings per share forecast by 10 per cent this year on the back of deal and predicts the company will post EBITDA of £2.6 million.

‘Powell was making a lot of money as we were busy, so we decided it was not clever to be giving margin away,’ Straight said.

‘We also realised it was not clever to have a supplier overly reliant on us for its business.’

Straight's purchase of Dyro is one in a series of deals negotiated by the company’s chief executive.

In 2004, a year after listing on AIM, it bought its main competitor Blackwall for £6.75 million. It has since bought Gummy Bins and Harcostar Garden Products, while creating a manufacturing base in the US.

In March it snapped up the bulk of waste company Helesi's UK business, an acquisition which gave Straight its first branded wheelie bin.

‘Helesi is doing well,’ the CEO said.

‘We are looking to get to the sales levels to where they were before Helesi went off the boil in the second half of 2009.’

Thursday, 19 August 2010

Gulfsands Petroleum and ADX move on to primary target in Lambouka-1

As it is drilling down to Lambouka-1’s primary target, Gulfsands Petroleum’s (LON: GPX) joint venture partner ADX Energy Ltd (ASX:ADX) has intersected the complete Ain Grab section. In this secondary target, ADX encountered porous reservoir sandstone, as expected, which was determined to be water-bearing following the interpretation of drilling logs.

ADX Energy operates the Kerkouane Exploration Licence offshore Tunisia, which hosts the Lambouka prospect, and the adjacent Pantelleria exploration permit in Southern Italy. Gulfsands is earning into a 30% participating interest in both Kerkouane and Pantelleria.

Earlier this week, ADX reported that the Tertiary aged Birsa Sand - the first reservoir target for the Lambouka prospect - was also water bearing.
Drilling beyond the Birsa and Ain Grab targets, at respective depths of 1,780m and 2,216m, ADX will now move on to Lambouka-1’s primary target, the Abiod carbonate formation.

Whilst investors in Australia saw ADX fall by around 16% on the Australian Securities Exchange, in London investors seem to have their eyes set firmly on the primary Aboid carbonate target. Despite this second watery target in one week, Gulfsands share only fell marginally this morning, down just 1.2% in late morning deals.

Earlier this week, following the disappointment of the Birsa result, London-based stockbroker Arbuthnot Securities remained upbeat on the company’s prospects. According to Arbuthnot, Gulfsands still has “considerable upside from the current share price”, even if the Lambouka-1 exploration well, offshore Tunisia, comes up dry.

Gulfsands also expects to participate in the drilling of another exploration well in Tunisia, before the end of 2010, on the onshore Chorbane permit where it is earning into a 40% interest.

Baobab Resources chairman Dowler ups his holding

Baobab Resources PLC (LON:BAO) said chairman Jeremy Dowler bought 200,000 ordinary shares yesterday at a price of 8.75 pence per share for total of £17,500.
Dowler now holds 8,090,169 shares in the company, representing 5.09 percent of the capital.  In addition, he holds 1,575,000 options.
Baobab last week announced the start of a 7,000m step-out reverse circulation (RC) drilling programme on the South Zone at Tete, its flagship iron/vanadium/titanium project in Mozambique.
With the next phase of work now underway, and given the successful completion of the diamond drilling phase, Baobab said it was on target to update the Tete resource inventory by the end of the year.
Also last week, Edison Investment Research published a note on the company, saying Baobab’s drilling at Tete’s Chimbala prospect has potentially added 225.7Mt at 26.8% Fe to the officially declared JORC resource of 47.7Mt at 25.3% Fe, according to analysis by Edison.

GGG partner Auzex intersects new gold outside Bullabulling Resource

Brisbane-based Auzex Resources (ASX: AZX) continues to have success at the Bullabulling Gold Project with drilling confirming vertical and lateral continuity established from the recent structural study and new Inferred Resource estimate, as well as intersecting mineralisation outside the new Inferred Resource.

The project is being developed in joint venture with GGG Resources PLC (LON:GGG), which recently changed its name from Central China Goldfields.

Auzex and GGG surprised on the upside earlier this week with a larger than expected 450% jump in JORC reported Mineral Resource to over 1.98 million ounces of contained gold at Bullabulling.
Auzex said in a new statement to the Australian Securities Exchange there is good reconciliation between intersected mineralised intercepts and adjacent historic drill intersections.

A program of seven drillholes totalling 1,396m has been completed over a 2.5km section of the 6km Bullabulling Trend and all assays have been received.

Better intersections include:

- Hole AZBBRD0001: 15m at 1.64g/t Au from 126m, including 4m at 4.91g/t Au from 132m;
- Hole AZBBR0004:14m at 1.67g/t Au from 77m, including 4m at 4.41g/t Au from 87m;
- Hole AZBBRD0006: 25m at 1.69g/t Au from 144m, including 1m at 37.4 g/t Au from 144m.

The drill program planned to intersect known mineralisation between Bacchus and Phoenix pits and was designed to primarily provide detailed structural information related to grade and allow detailed geological data to be collected from the hanging wall through to the footwall of the Bullabulling shear zone, which is approximately 500m wide.

The drillholes were also planned to continue deeper than the historic drilling to test for new zones of mineralisation and provide information to check the new JORC complaint Inferred Resource model and this was confirmed.

Seven drillholes were budgeted totalling 1,432m, with seven holes completed for 1,396m including 200m of RC pre-collars. Fewer metres were drilled than planned due to the failure of one hole to reach the target depth due to bogged drill rods.

Drill-hole AZBBRD0001 intersected mineralisation between 126m and 141m with 15m at 1.64 g/t Au intersected, including 4m at 4.91 g/t Au from 132m.

A low grade zone was also intersected above the target zone with 11m at 0.51 g/t Au intersected from 111m, including 2m @ 1.30 g/t Au from 111m.

Importantly, a new zone of mineralisation was intersected beneath the mineralisation mined historically with 15.58m at 1.26 g/t Au intersected from 354.42m, including 5.58m at 1.93 g/t Au from 354.42 and 5m at 1.66 g/t Au from 365m.

John Lawton, managing director, said this intersection confirms the structural model of stacked lodes in the footwall of the Bacchus mineralisation. This intersection is also located outside the current resource model.

Drill-hole AZBBRD0004 successfully intersected the targeted mineralisation between 77m and 91m with 14m at 1.67 g/t Au, including 4m at 4.41 g/t Au from 87m. A shoot was also intersected below the targeted shoot with 5.75m grading 3.09 g/t Au intersected from 107.25m.

In addition, a number of low grade zones were intersected in the upper part of the hole. The lower zone of mineralisation represents a new target that will add to the current resource.

Drill-hole AZBBRD0006 intersected the mineralised lodes mined in the Bacchus South pit with 2.5m at 2.1 g/t Au returned from 1.5m and 2m at 1.06 g/t Au from 30m and 11m at 0.52 g/t Au from 53m.

A number of narrow high grade zones of mineralisation including 1m at 37.4 g/t Au from 144m (visible gold was identified at this intersection) and wider low grade intersections, including 25m at 1.69 g/t Au from 144m were also returned below the target that represents new mineralisation targets in the footwall that are not included in the current resource.

Norseman Gold working towards OK Decline restart

Norseman Gold (LON:NGL, ASX:NGL) has updated investors regarding the ongoing suspension of mining operations at the OK Decline - one of the three underground gold mines that make up the Norseman mine  - following a fatality on 5 August 2010.

An investigation is currently underway to determine how the incident occurred. Today, Norseman said that whilst these investigations continue, it is now working to recommence operations in a "timely and prudent manner".

Norseman highlighted that the other two underground mining operations, the Bullen and Harlequin declines, have been unaffected and they continue to operate as normal.
In the company’s most recent result, Q4 interims, which were released just one week before the incident, Norseman reported production of 14,469 oz (ounces) – most of which coming from the two unaffected declines.

In the three-months ended 30th June 2010, just 561oz of gold were produced from the OK Decline, meanwhile Bullen and Harlequin produced 4,170oz and 9,641oz respectively.

The OK Decline is the newest of the three declines, and the company has been ramping up production since OK began producing early this year. On 30 July, Norseman said it expected the OK Decline to steadily increase its production profile with more ore development undertaken and stoping.

Lo-Q hire Serco executive Tom Burnet as new CEO

Lo-Q (LON:LOQ) has appointed a new chief executive officer with effect from October 4 2010. Tom Burnet joins the company from Serco (LON:SRP) where he was managing director of the defence operations division. Lo-Q believes that the "high-calibre" appointment reflects the company’s strong market position as well as its "significant growth potential".

"We expect Tom to provide strong leadership at the next stage of development for the company as we continue to extend our customer base and look to launch a new system aimed at water parks," Lo-Q’s founding director Leonard Sim commented.

Lo-Q develops and markets virtual queueing systems for use in theme parks.
Through Lo-Q’s Q-Bot and Q-Text products, theme park visitors can join a virtual queue for a particular attraction or ride, instead of physically standing in line, then once their ride is ready Lo-Q’s systems alert the customer so they can make their way to the attraction.

The Q-Bot is a handheld unit which is rented by the park visitors, and the Q-Text uses the visitor’s mobile phone instead of the Q-bot, by sending a simple text.

The CEO-elect has a broad range of experience in corporate management. Before Serco, Burnet was MD of QinetiQ’s (LON:QQ) ‘Capability Support Division’ - a technical consultancy - and prior to that Burnet served as both and executive and non-executive at Cedalion Ltd - which is a Microsoft Technology consultant.

Burnet has also worked as an executive director at an events, corporate entertainment and training business, Maximillion Events Ltd.
Last month, in its own H1 results statement, Lo-Q told investors that it was looking ahead to the remainder of the year with excitement, after winning new customers and maintaining a strong cashflow in H1.

In the six-months ended 30 April, Lo-Q increased revenue by 21% from a year earlier to £2.46m.

The company noted that, due to a change in its year-end which was implemented in 2009, the first six months of the financial year now only includes limited trading activity. The majority of parks and attractions in which Lo-Q operate have reduced activity between November and April.  The company’s financial year now ends in October, with the H1 ending in April.

In July, Lo-Q highlighted that “the eventual out-turn for the rest of the year as always will be very dependent on park attendance”, and earlier this week one of the key park operators, who have deployed Lo-Q technology, reported improving visitor trends.

According to Six Flags Entertainment Corp (NYSE:SIX), 9.5 million customers visited its 19 theme parks, representing a 6% increase in visitors compared with H109. Lo-Q’s virtual queuing systems are currently installed at 11 of the major theme parks.

Although the precise impact is difficult to quantify, in terms of Lo-Q’s performance, Six Flag’s positive visitor numbers through to June indicate positive trends for the company.

Balfour Beatty’s Gammon Construction wins part of £238 mln rail infrastructure deal in Hong Kong

Engineering, construction and services group Balfour Beatty PLC (LON: BBY) said its 50 percent controlled infrastructure contractor Gammon Construction Ltd won a £238 million) rail infrastructure contract, in joint venture with Leighton Asia, from MTR Corp.
The contract, for which Gammon has a 50 percent share, is in the West Kowloon district and is part of the Hong Kong section of the Guangzhon-Shenzhen-Hong Kong Express Rail Link, which forms part of China's strategic national express rail network.
Gammon Construction is 50 percent owned by Balfour Beatty and 50 percent by Asian trading and manufacturing group Jardine Matheson.

Quadrise raises money to maintain 16.5% stake in Sparky Energy

Manufacturer of emulsion fuels Quadrise Fuels International (LON:QFI) has raised money via a share issue to participate in a share issue by junior oil company Sparky Energy Corp, which is preparing to develop depleted oil fields using the proprietary EOR technology developed by Quadrise Canada Corporation (QCC).
The company has secured binding commitments from its shareholders to subscribe to shares worth a total £875,000, 50% of which, or £437,000 has already been received. The money will be used to fund the purchase of 2 million shares in Sparky worth C$1 million, or £363,500 to maintain its 16.4% stake in the business.
Sparky has a 50/50 joint venture with Optimal Resources, a producing oil company with secured reserves in the Lloydminster area in Alberta, Canada. The EOR technology is designed to increase oil production and ultimate recovery from declining and depleted oil fields. The Sparky/Optimal joint venture holds the exclusive worldwide license from QCC for the use of this technology in clastic oil reservoirs.
The JV is proposing to establish an area of mutual interest of 6,400 square miles in the Lloydminster area to exploit heavy oil production development while employing the EOR technology.
The company said there were many depleted heavy oil pools in Western Canada, the USA and worldwide, for which this technology could be applicable. Sparky has estimated that Western Canada alone holds 35 billion barrels of conventional heavy oil resources in place. Research by QCC revealed that the heavy oil already recovered using primary and early enhanced recovery methods has been in the order of 10% of the oil in place.
Sparky has a 50% interest in all field assets and in the associated recovered oil.
Sparky is raising C$5 million for the early phase programme via the share issue. The early phase development plans, which are already underway, will include a single well injection test scheduled to take place shortly on Block 18 of the Optimal property in the Lloydminster area, a pilot scale five spot (fur injection wells and one producer) pressurised injection flood planned for Q4 2010 and the first small scale commercial development programme.
Quadrise said that a successful Sparky venture should be significant for the future value of its holdings in QCC and the stake could not be maintained without a capital raising.
“We are especially pleased to have maintained a leading shareholding position in Sparky through these arrangements. The QCC EOR technology looks promising and the Sparky-Optimal venture is an ideal vehicle to take it to market,” said Quadrise Fuels International chairman Ian Williams.
The projects will be operated by Optimal.

Wednesday, 18 August 2010

Miners and energy companies push down FTSE 100

Overview: the markets were in correction mode following yesterday’s rally today with the FTSE 100 giving away half of Tuesday’s 1.4% gain. In the only significant news of the day, minutes of the Bank of England’s (BoE) latest interest rate meeting revealed that the monetary policy committee was split on whether to leave the rates at the current 0.5% and ended up voting 8-1 in favor.
Quality and safety services provider Intertek (LON:ITRK) emerged atop the leaderboard with a 5.5% advance. Satellite telecommunications company Inmarsat (LON:ISAT) and insurer Legal & General (LON:LGEN) followed with gains of 3.7% and 3% respectively. Airline British Airways (LON:BAY) and plumbing and heating equipment manufacturer Wolseley (LON:WOS) added nearly 2%. Clothing retailer Next (LON:NXT) moved up 1.5%. Temporary power provider Aggreko (LON:AGK) and another retail company Marks & Spencer (LON:MKS) tacked on 1%.
Miner Eurasian Natural Resources (LON:ENRC) was at the bottom of the pile with a 3% decline. Sector peer Anglo American (LON:AAL) and platinum miner Lonmin (LON:LMI) followed, sliding 2.4%. The world’s largest miner BHP Billiton (LON:BLT) and banking group HSBC (LON:HSBA) retreated 2%. British American Tobacco (LON:BATS) lost nearly 2%.
The Dow Jones Industrial Average and the broader S&P 500 are currently projected to open flat.
Oil prices track losses in equities
Oil prices pared gains and then slid below yesterday’s levels after US inventories were reported to have risen, while the rally in equity markets ran out of steam and most European stock market indexes headed south.
The American Petroleum Institute (API) said yesterday that crude stockpiles in the US added 5.87 million barrels last week to indicate lower demand in the world’s largest energy consumer, while analysts were expecting another drawdown. A more closely inventories report from US Energy information Administration (EIA) will be released tomorrow.
September Brent Crude slid to US$76.15/barrel, while US light, sweet crude for September delivery declined to US$75.05/barrel.
Most blue chip oil and gas producers moved into the red today. BP (LON:BP) declined 1.3%. Fellow supermajor Shell (LON:RDSB) posted a small loss, as did Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW).
BG Group (LON:BG) was little moved.
Oil and gas engineering firms Amec (LON:AMEC) and Petrofac (LON:PFC) posted small gains.
Dragon Oil (LON:DGO) and Premier Oil (LON:PMO) added less than 1%, while other midcaps were in decline. Dana Petroleum (LON:DNX), JKX Oil & Gas (LON:JKX), Salamander Energy (LON:SMDR) and Soco International (LON:SIA) posted small losses. Heritage Oil (LON:HOIL) and Melrose Resources (LON:MRS) slipped 2%.
Services companies Wood Group (LON:WG) and Wellstream Holdings (LON:WSM) shed less than 1%.
Energy investor Xtract Energy PLC (LON:XTR) moved with the majors, retreating 14%. Europa Oil & Gas (LON:EOG) and Africa focused energy company Dominion Petroleum (LON:DPL) outperformed the sector, advancing 6.5% and 5.5%.
Gold finds support to stay above $1,220
Gold inched lower, but remained above US$1,220/oz as investors apparently lacked confidence in the markets after yesterday’s rally. The FTSE 100 and then the Dow Jones Industrial Average and the broader S&P 500 index in the US surged after US housing starts increased by 1.7% in July, while retail giants Walmart (NYSE:WMT) and Home Depot (NYSE:HD) released strong earnings reports.
However, Japan said that its GDP growth slowed to 0.4% in Q4. Last week, both the Federal Reserve and the Bank of England (BoE) left their respective interest rates unchanged, boosting gold’s appeal as an inflation hedge, and also offered a bearish economic outlook. The Fed said it would start buying US bonds to bolster the economy, while BoE governor Mervyn King stated that the recovery would be “choppy.”
Current macroeconomic fundamentals do not appear to be strong enough to support a sustained positive trend in the markets, which keeps safe haven demand at a high level.
Gold declined to US$1,222/oz, while silver and platinum slipped to US$18.44/oz and US$1,535/oz respectively.
Major mining stocks turned negative today.
Silver miner Fresnillo (LON:FRES) and platinum miner Lonmin (LON:LMI) slipped 2.1% and 1% respectively. Gold miner Randgold Resources (LON:RRS) managed to stay even.
African Barrick Gold (LON:ABG) declined marginally, as did specialty chemicals firm Johnson Matthey (LON:JMAT).
Midcaps followed. Gold miner Petropavlovsk (LON:POG) lost 2.8% and  silver producer Hochschild Mining (LON:HOC) shed less than 1%.
Aquarius Platinum (LON:AQP) went against the tide, posting a small gain.
Junior diamond miner Stellar Diamonds (LON:STEL) and Turkey focused gold miner Ariana Resources (LON:AAU) moved with the majors, slipping 10% and 7.5% respectively. Africa focused gold deposit developer Cluff Gold (LON:CLF) and Turkey and Saudi Arabia operating gold explorer KEFI Minerals (LON:KEFI) did better, climbing 5.5%.
Base metals miners slide as metal prices decline
Copper and nickel slid to US$3.33/lb and US$9.88/lb, while zinc declined to US$0.95/lb.
Base metal miners were in decline. Eurasian Natural Resources (LON:ENRC), Anglo American (LON:AAL) and BHP Billiton (LON:BLT) led the retreat, sliding 3%, 2.5% and 2% respectively. Vedanta Resources (LON:VED) declined 1.5%, while Kazakhmys (LON:KAZ) and Rio Tinto (LON:RIO) shed just over 1%, as did Xstrata (LON:XTA).
Antofagasta (LON:ANTO) was sitting just below the opening level.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LON:FXPO) outperformed the sector, advancing 1%.
Indonesia focused Finders Resources (LON:FND) led the juniors with an 8.5% advance. South Africa operating chrome miner Chromex Mining (LON:CHX) moved in the opposite direction, slipping 7%.
Banks, insurance private equity
Banking stocks didn’t show much movement with the exception of HSBC (LON:HSBA), which shed 2%. Barclays (LON:BARC), Royal Bank of Scotland (LON:RBS) and Standard Chartered (LON:STAN) posted small losses and Lloyds (LON:LLOY) added less than 1%.
Standard Life (LON:SL) was the heaviest faller among the insurance companies with a 1.7% loss. Aviva (LON:AV) followed with a 1.2% decline.
Old Mutual (LON:OML) and RSA Insurance Group (LON:RSA) were sitting just below the opening levels. Admiral Group (LON:ADM) and Prudential (LON:PRU) made small advances.
Legal & General (LON:LGEN) led the sector with a 2.8% gain.
Private equity group 3i (LON:III) rose marginally.
Small Cap Movers
Other notable movers among the small caps included developer of CAD and image analysis software Medicsight (LON:MDST) and developer of advanced vision based industrial systems Seeing Machines (LON:SEE), which lost 8% and multi-currency payment and data processor Planet Payment (LON:PPT) with a 14% loss.
Novel pesticides and plant nutritional products developer Plant Impact (LON:PIM) did better, tacking on 6.5%.
Small Cap News
Ambrian Capital PLC (LON:AMBR) said it has acquired the physical bio-fuels business of the Masefield Group, strengthening its physical commodities trading capability.
In its interim results for the first half, DiamondCorp (LON:DCP, JSE:DMC) revealed that the underground development of the Lace Diamond mine, in South Africa, is ahead of schedule and within budget. Meanwhile, in Botswana the company’s ‘exciting’ kimberlite exploration programme is also progressing well with each of the first four holes intersecting kimberlite. In a note to investors, Fairfax Securities focused on DiamondCorp’s positive interim results. The stockbroker said that whilst the company’s share price "remains at distressed levels", the broker believes that the Lace mine’s upside potential “should meet expectations” and successful bulk sampling “could see a major increase in valuation".
The enigmatic Falkland islands oil play took another twist today, after Rockhopper Exploration (LON:RKH) revealed that the Ernest exploration well in the North Basin came up dry. After reaching 2,249m, initial logging confirmed that “no hydrocarbons have been encountered”.
Africa and FSU operating oil and gas junior Victoria Oil & Gas (LON:VOG) reported more progress from its Logbaba gas and condensate project in Cameroon, where the second well continued to show good flow rates and current improvements along with the first gas delivery remain on track for December 2010. The company has also signed gas sales agreements covering the first five years.
Copper and gold miner EMED Mining (LON:EMED) has announced that its wholly owned subsidiary EMED Tartessus has received formal clarification from the Department of Industry of Andalucía of certain regulatory administrative matters which were previously reported as outstanding.
Europa Oil & Gas (LON:EOG) has been awarded two licenses for underground coal gasification (UCG) off the east coast of England by the Coal Authority. The new licenses are adjacent to Europa’s existing East Midlands licenses.
Synchronica (LON:SYNC) continues to expand both its pipeline and the size of its addressable market, with yet another new contract with a major mobile operator in the emerging markets. In a deal with the Philippines' largest mobile operator, Smart Communications, Synchronica will facilitate push-email service. Smart’s GoMail service is based on Synchronica's Mobile Gateway ‘middleware’. The company highlighted Mobile Gateway's ‘100% device compatibility’, and said GoMail will be available to all of Smart’s subscribers.
Broker Daniel Stewart & Company (DS&C) called the update from Victoria Oil & Gas (LON:VOG) “very solid” with “solid if not stellar” rates shown by the La-106 well at the Logbaba gas and condensate project in Cameroon.
Cove Energy (LON:COV) has made the first liquid hydrocarbon discovery in deepwater offshore East Africa after the Ironclad-1 well in the Area 1 offshore Mozambique license block encountered oil and gas saturated sands. The presence of oil has been confirmed by geochemical analysis.
Lonrho’s (LON:LONR) 63%-owned port operator, Luba Freeport, has agreed a significant deal with TENARIS (NYSE: TS) which will ultimately see the major oil and gas service group establish a regional hub at the Freeport in Equatorial Guinea.
Avia Health Informatics (LON:AVIA) has reached an agreement with European shipping group Intresco Ltd, to trial its first product in the Odyssey MobileAssess range. The Odyssey MarineAssess system is designed to remotely assess the condition of an ill or injured crew member, and reduce the potential costs associated with diverting a shipping vessel.
Large and Mid Cap News
Brit Insurance Holdings NV (LON:BRE) has promoted Ray Cox to the chief executive officer position of its UK Strategic Business Unit with effect from September 1 2010. He will join the executive management committee and report directly to group CEO Dane Douetil.
In its interim results statement, the Henderson Group (LON:HGG) highlighted strong growth, with revenues up 50% and profits up 80% from a year earlier, overcoming “market volatility and fragile investor confidence”. Assets under management (AUM) grew by 19% to £58.2bn.