Friday, 30 November 2012

Focus Graphite's Lac Knife shows more "robust economics" than Northern Graphite's Bissett Creek, says Fundamental Research

Fundamental Research Corp has raised its fair value estimate on Focus Graphite (CVE:FMS), after a recent preliminary economic assessment (PEA) on the graphite explorer's Lac Knife deposit in Quebec, and exploration work on its Lac Tétépisca property. 
The equity research firm, which also highlighted Focus' strong cash position, raised its fair value estimate on the company to $1.44 per share from $1.21 per share previously. 
Analyst Nicole Engbert notes the Lac Knife PEA shows high production rates, and three potential saleable products. 
The long-awaited PEA, which was unveiled in late October, showed average concentrate grades of 92% graphitic carbon.                    
With a mine life of 20 years, the open pit operation is expected to yield 300,000 tonnes per year, with life-of-mine production of 928,000 tonnes of concentrate at 92% graphitic carbon on average, or approximately 46,600 tonnes of concentrate per year.
Pre-tax net present value - at a 10% discount rate - was estimated at $246 million with a 32% pre-tax internal rate of return and a pre-tax payback period of 2.8 years.
Initial capital cost was projected at $154 million, inclusive of $33 million and $24 million in working capital and contingency (25 per cent), respectively.
Three products are expected to be produced from the operation - two concentrates with fine and medium flake sizes, and a high purity battery-quality product. 
The company says that Lac Knife is unique because of its cost-mitigating, high concentration of large, medium and small flake graphite. Flake graphite - the most actively pursued type of graphite and associated with next-generation technologies - is made up of layers of graphene, which is the mineral’s base structural element. 
The Fundamental Research analyst compares Focus' Lac Knife project to Northern Graphite's (CVE:NGC) Bissett Creek graphite project, which has a net present value of $71.1 million at an 8 per cent discount rate and an IRR of 15.6 per cent.
Overall, the report says Focus has a larger contained graphite tonnage and a targeted large/medium flake production rate of more than double that of Northern’s rate.  
"We believe that the higher contained graphite, higher production rate,  lower operating costs, and accounting for revenues from the upgraded product are the primary drivers behind FMS’s higher pre-tax NPV value," notes Engbert. 
"Overall, we believe that FMS shows more robust economics and has a greater potential for mineral resource expansion due to the Lac Knife property’s earlier stage of development and significantly higher graphite grades."
The company has decided to go straight to off-take and financing arrangements, eliminating the need for a new feasibility study. It has already initiated contacts with several major graphite consuming groups in North America, Europe and Asia.
In terms of expansion, the company this year completed two substantial drill programs - on Lac Knife and at its Kwyjibo rare earth element property in the Grenville region of northeastern Quebec. 
Exploration results from these programs are expected in early January next year. The results from Lac Knife will be used to revise and upgrade the property's NI 43-101 compliant resource, published last December, which stands at 4.9 million tonnes at 15.8% graphitic carbon (Cgr) in the indicated category and 3.0 million tonnes at 15.6% Cgr in the inferred category.
Lac Knife drilling was done along strike and to the south, as the resource is open in all directions, including at depth.
At Kwyjibo, drilling began in August with the aim of confirming grades, thickness and continuity of the rare earth-iron-copper mineralization seen in the area of the Josette horizon. 
The Kwyjibo property consists of 118 mining titles and covers 6,278 hectares, located several kilometres north of Manitou Lake and 125 kilometres northeast of Sept-Iles.
Meanwhile, the company also recently announced a "high grade graphite corridor", says Engbert, on the 100 per cent owned Lac Tétépisca property. The company has said that reconnaissance bedrock sampling carried out during the summer found a 900 metre long by up to 100 metre wide graphite-bearing corridor.
A total of 26 mineralized grab samples define the new "Manicouagan-Quest" graphitic corridor, 17 of which host Cgr grades of over 5.59% Cgr. The highest grade from the samples is 45.8% Cgr.  
Fundamental Research also takes note of Focus Graphite's "extremely strong" cash position, with around $17.6 million in the treasury. It has a capex budget of only $4 million for the next 12 months. 
Focus also holds a 40 per cent stake in Grafoid Inc - a privately held joint venture that holds an economically scalable production process for graphene - derived from raw, unprocessed graphite ore. 
The JV is a one year agreement, through which work toward the development of a catalyst material derived from grapheme derivatives and carbon nanotubes will occur.  "We believe this agreement has the potential to further the development of graphite end products in the high-tech sector. 
"Although it is too early for us to speculate on the outcome of Grafoid, we believe it is good for FMS to be involved with the development of graphene at this stage, as the upside potential for graphene players could be very significant going forward," Engbert adds.
Graphene occurs naturally in graphite, is 200 times stronger than steel and is so thin it is transparent. It is also flexible and electrically conductive.
The substance can be used as a transistor, as a component for industrial, aviation and infrastructural use, and can be produced for battery and super-charging capacitor applications.  

Longreach Oil & Gas lures blue-chip investors

Longreach Oil & Gas (CVE:LOI) has confirmed it will have three new blue-chip investors on its share register following the merger with APIC, which will bring in $30mln of new funds.
They are the bank Dundee (15.2%), West Face Capital (10.6%) and Blakeney (10.3%).
The cash will fund two wells on the SidiMoktar gas licence with the Koba and Kamar prospects providing the first drill opportunities.
The former will be drilled into the upper Triassic sandstone known as T9-10, and puncturing the top of the lower lying Triassic T6 sandstone.
This will allow the group to determine the drill programme for the Kamar prospect, which will target T6 sandstone at an up-dip location.
The first well is expected to be spudded “late first quarter, early second” of next year. The wells are expected to take 60 days each and have a dry hole cost estimate of $10 million.
However, before the drill rig gets going, Longreach will acquire more 2D seismic that will further de-risk Koba and Kamar and convert other promising leads into drillable prospects.

Amara Mining PEA shows “good economics” for Sega project, says broker

Amara Mining’s (LON:AMA, TSE:AMZ) preliminary economic assessment (PEA) shows the potential of the Sega gold project in Burkina Faso, according to broker SP Angel.
Today, the West African miner, formerly known as Cluff Gold, revealed it has filed a report detailing the results of the PEA for Sega.
Amara previously highlighted that Sega has an internal rate of return of 48%, with a post-tax net present value of US$49.5mln using a gold price of US$1,500 per ounce and a discount rate of 10%.
It has contained gold of 162,825 ounces over a 21-month initial mine life, while cash costs excluding royalties are US$821 per ounce.
Meyer says the project looks worth pursuing based on these numbers.
“The PEA shows the potential to develop Sega at relatively low cost while at the same time extending the mine life of Kalsaka,” he added.
Kalsaka is located just 20 kilometres down the road from Sega and ore hauled from Sega to Kalsaka’s heap leach processing plant will be used to improve its production profile.

Digital Shelf Space reports quarterly results, expects positive impact on overall sell through this year

Vancouver-based Digital Shelf Space Corp. (CVE:DSS)(OTCQX:DTSRF) announced Friday its quarterly results, as the company said it began pre-order shipments of its new TOURAcademy Home Edition gold instructional DVD series in early October. 
All pre-orders came from the company's dedicated website,, and the home entertainment media company also anticipates retail presence in select sporting goods merchandisers in the US as well as prior to Christmas this year. 
The TOURAcademy DVD series was filmed entirely on location at TPC Sawgrass in Florida - the home of THE PLAYERS Championship.  The DVD series is hosted by Ian Baker-Finch, the 1991 British Open Champion and currentCBS Sports golf analyst, and is taught by Travis Fulton, director of instruction for the TOURAcademy. 
It is also taught by John Stahlschmidt, TPC Scottsdale head instructor and regional director for the TOURAcademy, as well as by golf professional and two-time Big Break competitor Christina Lecuyer.              
The "player tested and player proven" golf program is packaged in a 10 DVD boxed-set, and includes a contact bag, alignment sticks and a full set of printed golf materials. This includes an 8-week practice guide, practice calendar, and companian instruction manual. 
Digital Shelf Space has made a name for itself in the home instruction arena as it is also responsible for the home workout mixed martial arts-inspired DVD series, GSP RUSHFIT, which features Mixed Martial Arts welterweight world champion Georges St-Pierre.
The company said Friday that the 8-week DVD series continues to be the #1 rated consumer product in the exercise and fitness category on
Internet sales of GSP RUSHFIT remain strong through its own website, Digital Shelf added, as well as through Amazon websites in Canada, the US and the UK - achieving a 40 per cent growth rate in internet sales year-over-year in the latest quarter. 
It says the mixed martial arts DVD series was consistently rated in the top 10 for sales on, and was rated as high as #6 this quarter in Amazon's top 100 exercise videos. 
For the three months that ended September 30, total revenue declined, however, to $324,877 from $656,388 a year ago as St-Pierre recently recovered from an injury, while net loss widened to $387,067 from $115,971 in the year-earlier period. 
"We are pleased to have finalized the new TOURAcademy Home Edition program and are excited about taking our second globally branded product to market over Q4," said president and CEO Jeffrey Sharpe. 
"With the start of the peak season for the sale of fitness media products like GSP RUSHFIT, and GSP having recently come back from injury securing his world welterweight championship on November 17, 2012, we anticipate that the combination of the two will have a very positive impact on our overall sell through this year." 
The company also recently closed the first tranche of a non-brokered private placement financing, raising a total of C$500,500. It also secured a C$500,000 revolving loan facility. 
It ended the quarter with $2.32 million of assets, and $0.61 million of liabilities. 

Southern Arc Minerals posts $18 mln in working capital, continues strategic review

Southern Arc Minerals (CVE:SA) (OTCQX: SOACF), which recently announced a strategic review of its Indonesian assets, announced Friday its first quarter results, finishing the period with $18 million of working capital. 
Earlier this month, the junior explorer said it had received the required forestry permit, known as a Pinjam Pakai permit, to resume full scale exploration at its West Lombok property. While waiting for the permit for the last year, the company worked closely with SRK Consulting to prepare a detailed drill program for epithermal gold targets within its Pelangan and Mencanggah prospects. 
The company has since, however, postponed any further exploration at West Lombok pending completion of the strategic review. 
As at the end of the quarter, on September 30, the company had total assets of $60.23 million. It also narrowed its comprehensive loss to around $0.76 million, from a loss of $4.3 million at the end of the previous quarter. 
The company's main West Lombok project covers a 13 by 7 km structural corridor of mineralization hosting porphyry copper-gold and epithermal gold deposits. The two main epithermal prospects on the property, Pelangan and Mencanggah, cover broad areas of 4 by 5 km and 6.5 by 4.5 km, respectively.
Southern Arc has drilled 22,243.3 metres so far on epithermal gold mineralization, "confirming high-grade events typical of epithermal boiling zones and identifying several high-grade shoots", it said. 
The explorer has also wrapped up an airborne geophysical survey of the project, to define both near-surface and buried copper-gold porphyry targets. The results of the survey led to the identification of 17 porphyry targets on the property, a number of which have already had a limited amount of drill testing. 
This year, while waiting on the permit to resume full-scale exploration, Southern Arc also drilled a total of 3,501 metres in areas with no forestry desgination in the northwest section of the property, and in the southeast part. Surface mapping and channel sampling also took place, with the company finding "encouraging results" from rock chip channel samples. 
In May, Southern Arc increased its interest in the project from 85 to 90 per cent through the acquisition of additional shares in PT Indotan Lombok Barat Bangkit, the subsidiary that holds the mining business license to explore the property.
Southern Arc has a portfolio of projects in Indonesia aside from West Lombok, including the East Elang project next to Newmont's (NYSE:NEM) Elang copper-gold deposit, in which Vale (NYSE:VALE) remains a partner, and the Taliwang property next to Newmont's Batu Hijau copper-gold mine. 
At the East Elang project, the company said that while the property is considered "highly prospective", exploration has been deferred pending reclassification of the asset's forestry status. 
At Taliwang, where exploration so far has found a gold-silver bearing epithermal vein system, the company does not have any exploration activities planned at this time, and is assessing its options for the property, including a possible sale or joint venture. 
The company also recently assumed a 100 per cent interest in its Sabalong property in Indonesia following Vale's decision to withdraw from their partnership at the site. With phase 1 exploration complete, Vale decided not to proceed to phase 2 and withdrew from the Sabalong project. 
Southern Arc proceeded to complete a shallow drill program at the property targeting gold mineralization for a total of 1,036 metres in six holes. It reported in October that the drilling failed to show any increase in grade or width with depth, and did not extend the mineralization laterally. 
No follow up drilling has been planned at this time, with the company now considering future options for the property. The drill work by Southern Arc was done based on what it called "encouraging" historical surface and subsurface work at the property by Newmont, Rio Tinto Zinc, and the company itself.
During the three months that ended September 30, it posted a loss of $757,053, compared to a loss of $285,270 in the same period of 2011. This was a result of a foreign exchange loss, compared to a gain a year ago, as well as increased managment fees. 
In the latest quarter, the company said it invested $1.56 million on exploration, down from $3.3 million a year ago. 

New Zealand Energy reports continued positive cash flow as it boosts production on Taranaki Basin

Vancouver-based New Zealand Energy Corp. (CVE:NZ)(OTCQX:NZERF) has now reported three straight quarters with positive cash flow from operations, and says it has enough capital to support its required exploration and development plans.
This year, the company has transitioned from an explorer to an oil and gas producer, now having operations ongoing at seven wells, on three separate sites, compared to one site and one well at the end of 2011.
The junior oil and gas producer recently made its fifth oil discovery in the Taranaki Basin of New Zealand's North Island, flowing 325 barrels of oil per day (bbl/d) and 800 thousand cubic feet of natural gas per day (mcf/d) from the Mt. Messenger formation.
The Waitapu-2 well was drilled to a total measured depth of 2,085 metres, encountering roughly 6.2 metres of net pay in the Mt. Messenger Formation. So far, the well has produced 2,744 barrels of oil and will shortly be shut-in for pressure build-up.
The company's Waitapu site is just 1.3 kilometres south of Copper Moki, where it already has three producing wells. Its Copper Moki-4 is currently shut in while it completes the well test analyses and economic evaluation of artificial lift systems required to make a production decision.
It has also recently optimized production from its Copper Moki wells with artificial lift, increasing production by more than double to 438 bbl/d, and 770 mcf/d, compared to output at the end of the third quarter.
The company said it is currently producing 1,019 barrels of oil equivalent per day (boe/d) from four wells, with 155,285 barrels of oil produced and 154,533 barrels sold so far this year to the end of the latest quarter. 
New Zealand Energy, with $43.8 million in cash deposits currently, is in the midst of an eight well drilling program at the Taranaki Basin, which is expected to wrap up in the first quarter of next year. Earlier this month, the company said it was drilling its third well of the program, Arakamu-2, and earlier this week said the well reached target depth at 2,380 metres. It is now completing 8 metres of net pay in the well from two potentially productive zones. 
The oil and gas company said it will announce results from the Arakamu-2 well once it can estimate productive potential. 
It expects to spud another well at the Arakamu site, which sits around 2.5 kilometres south of Waitapu, in December, targeting the deeper Moki Formation at around 2,700 metres, after which it will drill four more wells as part of its drilling program.
In mid-October, the company shifted its 3,000 barrels of oil equivalent per day production forecast to the first quarter of 2013, so as to coincide with the completion of its eight well drill campaign. 
So far this year, New Zealand Energy has generated $11.9 million of cash flow, based on average netback of $77.13 per barrel. 
In the latest three month period that ended September 30, the company produced 37,850 barrels of oil from its three Copper Moki wells, and sold 38,565 barrels for total sales of $3.89 million, or $100.93 per barrel. 
Total gross production revenue was $3.71 million, compared to $5.91 million in the second quarter. Still, the company's sales are up substantially from almost a million in all of 2011, and its total comprehensive loss has narrowed from a year ago.
Production costs in the quarter were $1.26 million, or $32.58 per barrel, versus $22.14 per barrel in the previous quarter, as the company operated more wells in the latest period. 
After royalties of $4.77 per barrel, the company generated a field netback of $63.58 per barrel during the third quarter. The netback is calculated as the oil sale price less fixed and variable operating costs and a 5% royalty. 
The company said the decline in the field netback compared to prior quarters is the result of higher fixed costs associated with operating three producing wells, as well as a lower average realized oil price in the period, and natural well declines. In the second quarter, the company produced 55,226 barrels of oil. 
Since the end of the third quarter, New Zealand Energy has placed all three Copper Moki wells on artificial lift, which it expects will increase oil production rates, and reduce operating costs since the wells required less maintenance and man power. 
The company continues to interpret its 100 square kilometre 3D seismic program completed in the first half of this year, and is looking for more prospects that are comparable to the Copper Moki and Waitapu discoveries. 
So far, it said it has found a large inventory of more than 70 Mt. Messenger drill locations on its Eltham and Alton permits. While Mt. Messenger is the main target, it also has prospects in the shallower Urenui formation and the deeper Moki, Tikorangi and Kapuni intervals. 
It has also found new exploration leads on the four petroleum licenses to be acquired from Origin Energy Resources, as per an agreement signed back in May. The agreement also included the Waihapa Production Station, and associated gathering and sales infrastructure - which is central to the company's strategy. 
The station is located around 3km from New Zealand Energy's Copper Moki site, and is expected to reduce transportation and processing costs for its oil and gas production. As the only open-access midstream facility in the Taranaki Basin, the station ensures the company can process its own production, as well as offers opportunities for processing third-party gas, liquids, oil and water. 
Origin will remain operater of the station during a transition period through to mid-2013, the junior oil and gas producer said. 
New Zealand Energy’s property portfolio covers nearly 2.25 million acres of prospects in the Taranaki Basin and East Coast Basin of New Zealand’s North Island. 
A large chunk of its properties are located in the Taranaki Basin, which is situated on the west coast of the North Island and is currently the country's only oil and gas producing basin, producing roughly 130,000 barrels of oil per day from 18 fields.
In late October, the company announced an updated reserves estimate, resulting in a 150% increase to proved + probable (2P) reserves compared to December 2011, and a 73% rise to the proved + probable pre-tax net present value at a 10% discount rate. 
Its marketable oil and gas reserves are estimated at 450,400 bbl and 625,600 bbl of 2P and 3P (proved + probable + possible), respectively, or 706,400 boe and 985,000 boe of 2P and 3P reserves, respectively.

Century Iron Mines: World-class resource, blue-chip partners and fully funded

The market’s perception of risk is ever changing and often contradictory.
A case in point is Century Iron Mines Corporation (TSE:FER), which debuted on the TSX last year valued at $300 million.
At this point it was sitting on a resource of 850 million tonnes, but with plenty of potential to improve on this figure.
Some 12 months later it has delivered spectacularly as it has raced its assets in Canada’s Labrador Trough right along the value curve. 
It now it boasts a measured and indicated resource of 8.4bn tonnes, with a further 11bn in the inferred category.
Yet the market’s reaction has been to strip Century’s market capitalisation back to less than $100 million. The cash on its balance sheet means the business has an enterprise value of just $50 million.
Of course the whole risk scenario has changed as market sentiment has turned against small- and mid-cap natural resources plays.
The weakness of the iron ore price has also applied a blanket discount to exploration companies such as Century.
And with such a huge resource, the worry often is how the junior will exploit its new found good fortune. As we will see, the financial commitment is potentially massive.
That said, the Canadian junior has taken some practical steps that go a very long way to addressing these concerns.   
The absurdity of the situation doesn’t end with the market’s assessment of risk (real or perceived).
The current valuation ignores some real value that has been added. 
In WISCO (Wuhan Iron & Steel Company) and MinMetals it has brought on board two blue-chip Chinese investors with huge ambitions and the deep pockets required to unlock the potential of Century’s assets.
The Chinese have taken a 30% stake in Century, WISCO has 25% and has pledged to buy 60% of the output from the mines when they are up and running.
There is also a funding package worth $120 million (so more than the current market cap) that will allow the mine developer to take three projects to the bankable feasibility stage. 
The involvement of WISCO both at an equity investment and project level, combined with Century’s various joint-ventures, makes the company appear a little opaque. 
The best way of understanding just what investors are getting for their money is to distil the proposition down to a single figure. 
Century has done this by taking that giant global resource figure of close to 20bn tonnes and assessed just how much of that belongs to its investors. 
It comes up with what it calls an “attributable resource” of 3.2bn tonnes (in the indicated and inferred categories). 
By anyone’s standards this is a huge figure. 
And Century has a road map for bringing the assets into production and the financial clout to make this happen.
WISCO has agreed to find debt funding for the projects in its Century joint-venture.
So for example, Full Moon, the largest of the JV’s iron projects, is expected to cost in the order of $5bn to bring into production.
Under the arrangement with WISCO, the equity element would be $1.5bn, with Century shareholders shouldering $600mln of that figure.
This is still a big ask. But it is a far, far smaller financial undertaking that it would have been without WISCO’s help.
Understated in all of this is the fact Century’s assets reside in Canada, and not some back-of-beyond, politically unstable dictatorship with no infrastructure.
There are three main projects in Quebec : Joyce Lake and Full Moon (eastern Quebec) and the Duncan deposits (western Quebec).
The largest by far is Full Moon with a measured and indicated resource of 7.3bn tonnes of taconite ore at a grading around 30% iron (with a further 8.7bn tonnes inferred).
“It is the mother lode, the company maker,” says Century chief executive Sandy Chim when we meet. “We control a strike length of 11 kilometres. It is very unusual thickness – it is double the thickness of our neighbour’s deposit.”
First into production is likely to be Joyce Lake, part of Century’s Attikamagen project. 
It is a high-grade direct shipping ore (DSO) deposit capable of producing at one million tonnes a year.
It is expected to be up and running in 2015 and the capex should come in at a relatively modest $100mln, based on similar projects in the region. There is also DSO potential at Hayot and Lac Fer, also part of the JV.
This is the “low hanging fruit” that will provide Century and its partners with an income until Full Moon comes on stream, says Chim.
At today’s iron ore prices this early DSO production from Joyce has the potential to generate revenue in the order of $120 million a year. 
It will also provide the group with the financial wherewithal to fund a 22 kilometre rail spur from he project onto the main railroad.
Initially the iron ore from Joyce Lake will be ferried by truck and then by train to Sept-Iles.
The Quebec port will also handle the output from the giant Full Moon prospect, when it gets underway in 2017/18 with output projected to be in the order 21 million of tonnes a year initially.
As mentioned Full Moon is thicker than neighbouring taconite discoveries, meaning the economics are far more attractive.
The product will be shipped more than 600 kilometres by rail to Sept-Iles, which is currently undergoing a 50 million tonnes a year expansion in capacity.
This is designed to deal with output from properties such Century’s and neighbouring projects such as New Millennium’s Tata-partnered KeMag and LabMag deposits.
The preliminary economic assessment of New Moon is expected by the second or third quarter of next year, with Century quickly moving on to a bankable feasibility study. 
Before it completes the BFS it will be required to elevate a portion of the giant resource into the reserves category. 
“So we are looking at a very quick and dirty figure of 2bn tonnes to reserves,” says Chim. “With our resource and strike of 11 kilometres that shouldn’t be too hard.”
Based on other projects in the region, Full Moon should be in the lower cost quartile, meaning it doesn’t have to rely on a sky high iron ore price to be economic.
The first significant piece news is expected to be the PEA on Duncan Lake (which has a 1.1bn tonne measured and indicated resource at 24-25% iron).
This is expected late this year or very early next, while the Joyce Lake resource is due at some time this quarter followed by the PEA next year.
The drill programme, meanwhile, should be in the order of 20,000 metres over the next 12 months, Chim confirms.
So 2013 is shaping up to be a pivotal year – and one in which should add several more layers of value to Century’s investment proposition. Let’s just hope the market takes heed.

Thursday, 29 November 2012

Batero Gold signs definitive agreement with Peruvian gold producer Consorcio Minero Horizonte to raise $20 mln

As per an initial deal struck earlier this month, Batero GoldCorp. (CVE:BAT) has agreed to a definitive strategic alliance with private Peruvian gold producer Consorcio Minero Horizonte, which will see Horizonte take a 35 per cent in Batero, raising up to $20 million for the development of the Batero-Quinchia project in Colombia. 
The agreement includes equity private placement financings, as well as an agreed loan of $2.2 million to Batero from Horizonte, all together raising up to $20 million for Batero. 
The deal will also see Batero gain a strategic alliance partner in Horizonte, which is the fifth largest gold producer in Peru, and advance the junior gold explorer's efforts in developing its Batero-Quinchia project toward a production decision. 
Batero said the financings will generate sufficient cash to fund the development of its project through to completion of a technical study, compliant with Colombian legislation for production.
It will also benefit from Horizonte's operational expertise, as well as the premium at which the financings will be transacted - minimizing dilution for Batero's shareholders. 
In addition, Batero will mantain its 100 per cent royalty-free stake in the project. 
Under the agreed financing, the company has definitively agreed to sell to Horizonte 8.9 million shares of Batero at a price of 65 cents each - a premium of around 46 per cent to the volume weighted average closing price of Batero's shares in October - and 18.46 million subscription receipts at the same price, for total proceeds of $17.79 million. 
The subscription receipts will automatically convert into a total of 18.46 million common shares, and 5.0 million common share purchase warrants, with each warrant having an exercise price of 90 cents. 
Horizonte already owns 8.9 per cent of Batero, and following the offering, and conversion of the receipts, it will hold a rough 35 per cent stake in the junior gold company. 
The offering is expected to close in early December, with the conversion of the receipts anticipated to follow in January, subject to the approval from shareholders and the TSX Venture Exchange. 
Batero said it has scheduled an annual and special general meeting on December 31 to approve the transaction. 
Also under the deal, two nominees of Horizonte will join Batero's board of directors, with one of these individuals to be selected specifically based on "technical acumen", the parties said. Horizonte will also supply Batero with any required technical personnel under the terms.             
The project has an initial resource estimate of 3.5 million ounces of indicated gold and 2.6 million ounces of inferred gold. The open pit resource estimate is based on a 0.16 grams per tonne (g/t) cut off, with 70 per cent of the project remaining unexplored.
La Cumbre is one of the three porphyry deposits at the Batero-Quinchia project, with at and near surface oxidized gold mineralization grading greater than 1.0 g/t gold in the central core of the deposit, as well as lateral and vertical continuity of gold mineralization.
The company's 4,947 metre completed drill program this year was aimed at infill drilling to upgrade the indicated mineral resources at La Cumbre to the measured resource category, and to test for potential extensions.

Pressure BioSciences upgraded to "outperform" by Zacks as PCT platform increasingly gains recognition

Pressure BioSciences (OTCQB:PBIO) has received an upgraded "outperform" rating from its prior "neutral" by analysts at Zacks Investment Research Thursday, who called the life science company's valuation "very attractive at this time". 
"We are impressed and optimistic about the company's novel, enabling platform technology pressure cycling technology (PCT) which has competitive advantages over existing technologies in the sample preparation market," notes analyst Grant Zeng. 
"PCT is increasingly gaining recognition by research labs. The company just reported record PCT product sales in 3Q12 and we expect continued growth in 4Q12 and beyond."
Indeed, earlier this month, the company posted a 40 per cent increase in revenues for its third quarter, reporting record sales of its PCT products. 
The life sciences company's PCT platform uses rapid and repeating cycles of hydrostatic pressure at controlled temperatures to extract cell components in the preparation of a biological sample - such as DNA and proteins from humans, animals and plants - for further study. 
Its PCT products can be used for mass spectrometry, biomarker discovery, bio-therapeutics, vaccine development, forensics, and counter-bioterror applications, among other applications.
For the three months that ended September 30, total revenue rose to $391,616 from $280,422 in the same period a year ago. Revenue from PCT products and services was $297,867 in the latest period, up 37 per cent year-over-year. 
Third quarter product sales were also $0.05 million over Zacks' estimate of $0.25 million, the report notes. 
The company said it installed eight PCT sample preparation systems in the latest period, while sales of PCT-based consumables generated sales of around $28,000 - a rise of 33 per cent. 
Loss per common share - basic and diluted - was nine cents for the third quarter compared to 19 cents for the same period in 2011.
"We are especially happy to see increased sales of consumables for the quarter. We expect the sales of consumables will continue to grow in the coming quarters. As we pointed before, this growth in consumables sales is very important to the company's long term sustainable growth," Zeng says. 
He reminds investors that consumables are a recurring revenue source to the company with higher margin, which are associated with the installation of PCT equipments. 
"When more and more equipments are installed, more consumables will be used. The growth of installed equipments will eventually stabilize, but the use of consumables will increase each quarter as the equipment base becomes larger." 
Although revenue from consumables currently accounts for only a small portion of PCT product sales, at about 10 per cent, Zeng expects this number will become larger going forward and make a "meaningful contribution to the top line."
What's more, the company also announced two significant pieces of news this week. 
On Wednesday, Pressure BioSciences announced a boost to its balance sheet, after Ironridge BioPharma converted their remaining 200 shares of Pressure's Series E convertible preferred stock into common stock. 
The funds received were used in part to support the new marketing and sales program that the company introduced earlier this year, which helped Pressure BioSciences achieve record PCT products revenue in the third quarter.
"With the conversion, the perceived overhang is gone, and PBIO paid out no more shares than originally registered. The conversion not only boosts PBIO's balance sheet, but also validates the company's PCT technology platform," Zeng assures. 
"This is an indication that Ironridge BioPharma is optimistic about PBIO's prospect and is willing to become its long term investor." Ironridge BioPharma is an institutional investor specializing in equity investments in the life sciences sector. 
The second significant event for the company took place on Monday, when it inked a two-way strategic marketing, selling and distribution agreement with UK-based biomedical product provider Constant Systems, with the deal to expand Pressure's international reach into 12 additional countries. 
Under the agreement, US-based Pressure BioSciences now has non-exclusive rights to market, sell and distribute Constant Systems' high pressure cell disruption equipment and consumables, which are used particularly for the extraction of proteins, in the US, Canada and Mexico. 
Meanwhile, Constant gets the rights to market, sell, and distribute Pressure BioSciences' patented PCT-based instruments and consumables in England, Scotland, Wales, Ireland, Spain, Portugal, Italy, Norway, Sweden, Finland, Denmark, and Singapore. 
The parties have also started discussions on the possibility of expanding the agreement to include cooperative research, development, and manufacturing in the near future.
"This is a big deal for PBIO in our view," Zacks' report notes. "The two companies are worldwide leaders of complementary ultra-high pressure product lines for the life sciences market.
"The two product lines complement each other exceedingly well. While both the CS and PBIO technologies are based on high pressure, each product line has fundamental scientific capabilities that the other does not have."
Word of the company is spreading. Earlier this month, two separate research groups presented data at a recent scientific world congress showing that the inclusion of the company's PCT platform into their sample preparation processes resulted in a "marked improvement in the quality and/or efficiency of test results."
And in a recent article from influential financial markets blog Seeking Alpha, contributor Vineet Dutta wrote about the fact that biotech services giant Thermo Fisher's (NYSE:TMO) unit Cole-Parmer recently agreed to carry Pressure BioSciences' PBI Shredder SG3 System.
"With Cole-Parmer s reputation and extensive distribution channels, sales of SG3 will be greatly boosted in the coming quarters, which will make a meaningful contribution to PBIO s top line growth down the road," Zeng highlights. 
The company also signed three global distribution deals back in the summer, expanding its reach even further. 
Zacks' analyst has a $1.25 price target on the company, based on two factors - improving financial results and business development, and an attractive valuation. 
In terms of valuation, he notes that Pressure BioSciences' shares are undervalued based on the company's fundamentals, as it trades around 20 cents per share, with a market cap of $2.0 million. 
Zeng concludes: "With a rapidly growing market worldwide, combined with its unique technology and broad range of product offering, the company is well positioned to boost its top line and bottom line in the coming years."

Great Western Minerals reports rise in Q3 revenue despite tightening rare earth market

Great Western Minerals (CVE:GWG) reported Thursday its third quarter results, with its revenues rising around 14 per cent over the prior year period. 
Earlier this week, the company provided an update on its corporate activities and operations after the recent resignation of three long-standing directors - Gary Billingsley, Jim Engdahl, and Bill McKnight - as the company transitions to a rare earth production phase and progresses toward the appointment of a new CEO. 
Great Western's former producing Steenkampskraal mine is under development through refurbishment, as the company builds a rare earth mixed chloride plant and a rare earth solvent extraction separation plant near the mine. 
The aim of the preliminary economic assessment (PEA) report underway is to further develop operational and financial projections based on an independent analysis of the mining of rare earth-bearing monazite, the extraction to mixed chloride, separation of oxides and metal and alloy production. 
Great Western reported Monday "excellent progress" with regards to wrapping up the PEA by its fourth quarter target.
The company's development program at Steenkampskraal is central to ensure a strong flow of feedstock for its downstream processing - it intends to be one of the first to produce significant quantities of the more valuable heavy rare earth oxides, which are important materials for alloys.
Indeed, the rare earth processor already produces specialty alloys, used in the magnet, battery, defence and aerospace industries, at its facilities - Less Common Metals (LCM) in Birkenhead, U.K. and Great Western Technologies (GWT) in Troy, Michigan. 
For the three months that ended September 30, revenues from processing alloys rose to $4.79 million, from $4.21 million a year earlier. 
Losses widened, however, to $3.6 million from $2.3 million as the company transitions to a producer of rare earth metals, and as it expands its processing facilities. 
"In the face of some tightening of the global rare earth market GWMG and LCM did manage to achieve higher revenues in the 3rd Quarter of 2012 compared to the same quarter of 2011," said interim president and CEO, Robert Quinn. 
"LCM EBITDA and earnings were reduced in the past quarter and year to date primarily as a result of the move to a new plant as well as the costs of installation of the new strip cast furnace. Both factors now provide a platform for improved financial performance going forward."
Indeed, at its LCM facility, the company has been working to deliver rare earth alloys using its new strip cast furnace, optimizing melt conditions, with customers currently evaluating. 
The second strip cast furnace ordered from the same Chinese supplier is now fabricated, and is scheduled to arrive in the latter part of the first quarter of next year. It is expected to be fully operational in the second quarter. The company is conducting a tour of the LCM facilities for analysts today.
As part of its vertical integration strategy, Great Western holds 100 per cent of Rare Earth Extraction Co. Limited, which owns a 74 per cent equity stake in the Steenkampskraal mine in South Africa. 
The current NI 43-101 report for Steenkampskraal, filed on May 31, indicates the presence of 13,823.64 metric tonnes of TREO, including yttrium, under the indicated resource category, and 14,147.76 metric tonnes under the inferred resource category, each using a one per cent cut-off grade.
It also holds a portfolio of rare earth exploration properties in North America.

Kincora Copper closes second tranche of placing to raise C$4.68mln

Kincora Copper (CVE:KCC) revealed it has raised C$4.68mln after closing the second tranche of its private placement financing.
The first slice of the placing announced two week ago raised gross proceeds of C$4.63mln, with major shareholder Origo putting in C$2mln.
The second tranche raised C$52,000 after Kincora issued 500,000 units at a price of C$0.105 per unit.
Each unit comprises one common share and one common share purchase warrant, which entitles the holder to buy one common share for a period of three years at a price of C$0.19 per share.
Funds from the capital raising, which eventually will total C$6mln, will be directed towards the continuation of drilling and exploration activities at the company’s flagship Bronze Fox project and for working capital.
Bronze Fox is located in the emerging Oyu Tolgoi South Gobi porphyry copper belt in southeast Mongolia.
Kincora hopes to become the leading listed independent copper exploration and development company in the highly prospective region.
Shares sank 1 cent on the news to stand at C$0.095 each.

Transeuro Energy rises 20% on government talks

Transeuro Energy (CVE:TSU) shares rose 20% on Toronto’s junior exchange after the oil firm revealed it has kicked off talks with the Ukrainian government and the government partner.
The company, which has interests in British Columbia, Canada and in Crimea, Ukraine, said the negotiations are to ratify and amend the company’s joint activity agreement (JAA) relating to the Karlavskoye and Krasnapolianskoye licences.
Transeuro said the Krasnapolianskoye licence expired last week and the government partner is in the process of renewing the licence, it said.
The company added in the statement: “The current negotiations include discussions over the construction of a Gas Treatment Plant (GTP) and tie-in of wells on the Krasnapolianskoye license, the objectives and well design for a well 'Karl-102' on the Karlavskoye License and other commercial and business terms. The parties have agreed to abandon the Karl-101 well.”
In a separate statement, the company said it will no longer be proceeding with its proposed shelf prospectus and exemptive relief application regarding the share purchase agreement (SPA) with Yorkville Advisors.
The company is now seeking the TSX Venture Exchange’s stamp of approval for the SPA. It said this means it may need to make further changes to the SPA.
Shares lifted C$0.005 or 20% to C$0.03 each.