Friday 31 May 2013

Snipp Interactive looks to become one-stop shop for mobile marketing - UPDATE

***Updated with comments from chief executive***
Snipp Interactive (CVE:SPN) has grown first quarter revenues by 85 per cent year-over-year as the mobile marketing firm continues to bolster its presence, as well as search for acquisitions that would make it a "one stop shop" for mobile marketing tools. 
"We are very pleased that our go-to-market strategy continues to be validated as our sales revenues continue to grow rapidly and propels us ever closer to being operationally cash flow positive," said CEO Atul Sabharwal in the release Friday. 
"The fact is that we are at the beginning of a mobile revolution that presents an unprecedented opportunity for companies like ours."
Indeed, the company figures that as an increasing number of people spend more time carrying out traditional web-based activities such as shopping and social interaction on their mobile devices, every company will need to start implementing a "mobile optimized layer" for their business to support this growing trend. 
Sabharwal likens the trend to the introduction of the Internet several years ago, saying this is the beginning of the same investment cycle, as less time is spent on desktops and more time is spent on mobile phones or tablet computers. "Companies will have to optimize all of their content and systems to work on mobile devices, and we offer a bunch of tools that will allow them to do that both cost effectively and easily," says the chief. 
For the three months to March 31, net income rose to $135,163 from a net loss of $697,959 in the prior year period. The company, which works with several major brands to market products through mobile, said the latest results were mainly due to a non-cash gain.  Before non-operating items, net loss was wider than a year ago at $398,235 versus $229,719 as the company dedicated more resources to sales and marketing as well as to investment in its platform. 
And this investment has paid off. Revenues jumped to $174,331 from $94,235 in the same quarter last year, attributable to new sales channels, additional sales contracts from existing customers, as well as new clients and the launch of new products like SnippCheck - a mobile receipt processing service - and SnippWine. 
The company's newest product - SnippWine - provides a full suite of mobile-based marketing tools for wineries, including shipping alerts, a mobile site builder, social sharing functionality, the SnippCeck mobile receipt processing service to process rebate and coupon programs, as well as a contest engine. 
Snipp is also working on the "soon-to-be released SnippShip" -a logisitic solution that provides mobile delivery alerts to customers - and other similar products, it said. The company's "Mobilize Me" platform collectively allows brands to interact with their customers through mobile across the entire purchase lifecycle.
Headquartered in Washington, D.C. and established in 2007, the company has provided its services to several Fortune 500 companies and other major brands, advertising agencies and publishers, including Wal-Mart (NYSE:WMT), Ford (NYSE:F), Wendy's (NASDAQ:WEN) and Campbell Soup (NYSE:CPB). It also worked on new campaigns last year with Taco Bell & ESPN, Meredith Corp, Arm & Hammer, and James Hardie, and launched Snipp in Mexico and the Middle East, executing successful campaigns in both markets. 
In the first quarter, Snipp said its product team finalized two new offerings that will launch in the second quarter, which will be consumer-focused self service tools, allowing the company to expand into new market segments. Currently, the Mobilize Me platform is only available on a full-service basis to large brands.
In the release Friday, it said several key initiatives "are expected to bear fruit for the company", any one of which can drive significant revenue and profitability gains, including an organic acquisition strategy, the launch of new products and the continued development of its overseas relationships.
"We're looking for complementary companies in the space that will add to our toolkit and make us a one stop shop," says the chief executive. 
In addition, in the second quarter, Snipp will be integrating its SnippWine suite into eWinery's platform, meaning customers of eWinery, which has more than 600 clients, will be able to launch and manage mobile programs through the eWinery interface. eWinery currently controls over 70 per cent of the $600 million direct to consumer wine business in the USA, according to the statement. 
"This deal is really critical and we're going to get a lot of traction through it. Importantly, the relationship we have with eWinery - we can do this with any brand," says Sabharwal. The chief executive expects the company will see the effects of this deal, and other international partnerships, beginning in the third quarter. 
The SnippShip mobile delivery tool, which is due out shortly, is also expected to work well with the alcohol industry, reducing returns (alcohol deliveries are not allowed to be left at one's doorstep) and thereby increasing customer satisfaction.
The company also said that SnippCheck, its other new product that replaces the mail-in rebate process, has submitted proposals for over ten million potential transactions for the coming year. 
Snipp, which ended the first quarter with current assets of $660,947 and liabilities of $228,940, will continue to ramp up international sales as well, with plans to launch a number of products and campaigns for the Middle East region in the coming months, and a big potential deal in the works in Mexico. 
"We're hoping some really cool stuff happens in these regions with some new products to be launched," the CEO says, adding that the company is also looking at potential partners in Brazil, Australia and Colombia. 
"Now that it's been more than a year since our IPO, and we've got everything in place, we are looking to acquire and aggressively add new products to really scale us up," he asserts.

Treasury Metals CEO highlights northwestern Ontario at AGM ahead of region’s M&A news

Treasury Metals (TSE: TML) is 15 months away from being shovel ready, according to president & CEO Martin Walter.
Walter made the assurance to investors at the company's annual general meeting on Thursday. Treasury, whose flagship Goliath Gold project is located in northern Ontario 20 kilometres east of Dryden, intends on submitting its environmental impact statement to the government by October. Walter said he expects to receive permits from the government at around this time next year.
In order to meet its operational checkpoints, Treasury has set a capital expenditure budget of $92 million and plans to raise funds by means of "non-traditional methods of financing," including debt and convertibles, as priorities ahead of issuing more stock. 
Walter acknowledges the challenges facing the junior mining sector, but said Treasury is "advancing towards production." 
"We have dollars coming in, rather than dollars going out," Walter said. "That's a differentiator in the junior mining business."
Indeed, investors are moving money away from South America and coming back to safer jurisdictions like Ontario, which Walter said makes Treasury "placed perfectly to take advantage of that."
Incidentally, reflecting that sentiment, an acquisition announced this morning will add 4.0 million ounces of gold reserves in Ontario. Vancouver-based New Gold (TSE: NGD), which has four producing assets in the U.S., Canada, Mexico and Australia, is buyingRainy River Resources (TSE: RR) in a deal worth $310 million. 
Rainy River operates an advanced-stage gold project roughly 200 kilometres south of Treasury’s Goliath. Similarly to Goliath, the Rainy River Gold project is located near existing infrastructure and has year-round road access.
This latest deal, which highlights Ontario’s significance in the mining landscape, comes on the heels of several others in the past year:Argonaut Gold’s (TSE:AR) purchase of Prodigy’s Magino project last October; Trelawney Mining’s Côté Lake project arriving into the hands of Iamgold (TSE:IMG) in June; and Osisko Mining’s (TSE:OSK) claim to the Kirkland Lake project after it acquiredQueenston Mining in December.
What's also encouraging for Treasury is that one out of every four gold projects advance to the permit process in Ontario, according to Walter. So far, Goliath is showing 1.7 million ounces; of that, 760,000 oz. is indicated and 940,000 oz. is inferred. 
The C-Zone, which Treasury is developing parallel to the main section, should bring "a lot of extra ounces" into Treasury's coffers at the time production begins. 
Treasury unveiled drill results last week showing near-surface intersections as high as 4.18 grams per tonne (g/t) gold in the main zone. The results also include near surface intercepts of 7.5 metres at 3.82 g/t gold from 36 metres depth, and 25 metres at 1.42 g/t gold from 152 metres depth.
The C-Zone results show intercepts of 13 metres at 0.94 g/t gold from 70.5 metres, and 8.5 metres at 1.52 g/t gold from 260 metres depth. 
Treasury vows not to compromise on its high-grade "two grams-plus" gold focus.

Caledonia Mining appoints Leigh Wilson as Jonsson's successor in the chair

Carl Jonsson has retired as chairman of Caledonia Mining(LON:CMCL, TSX:CAL) with immediate effect, to be replaced by Leigh Wilson.
Wilson is currently an independent director of the company.
Jonsson will continue as a director of the company and as company secretary.
Caledonia's president and chief executive officer said: "During the period of Carl's chairmanship, Caledonia has successfully overcome some significant challenges. Carl's assistance and guidance during this time has been invaluable.”

Transeuro Energy still hopeful over Beaver River talks

Transeuro Energy (CVE:TSU) remains in discussions with third parties over development of its Beaver River gas assets in Canada.
A decline in production from Beaver River meant first quarter revenues declined to C$377,00 in the three months to March compared to C$501,000 a year earlier. Net losses for the period were C$2.1mln (C$1.4mln).
Gas production was significantly lower due to the natural decline of the wells and minor reductions for operational issues during the winter period.
But the company says gas prices have picked up to a range of US$3.3/mcf and after a recent cost saving programme Transeuro believes if gas production can be increased to 10 mmcf/d, its unit operating costs should reduce down to the range of $1.2-1.4/mcf.
This is a sufficient margin to justify further investment in the asset, it said, and it repeated its hopes the third party discussions over Beaver River will make further progress through the summer.
Transeuro needs Beaver River’s performance to pick up to boost its financial position and also help with the funding of investment commitments on its existing and possible future licences in Ukraine.
The company recently agreed the sale of a drilling rig it had in Armenia, a deal it expects to close in early June. At end March, thetre was negative working capital of C$1.68 mln.

Great Panther Silver says president Carsky resigns as "encouraging progress" continues

Great Panther Silver (TSE:GPR)(NYSE MKT:GPL) has said that its president, Martin Carsky, is stepping down from his role effective immediately, and will be replaced by co-founder and CEO Robert Archer. 
Archer will resume the role of president and chief executive as Carsky has resigned for personal reasons, the company said, but has agreed to remain on as a consultant for a few months to assist with the transition. 
"Martin has made a significant contribution to our company through a challenging period. He has built a strong team in operations, health and safety, and financial management during his tenure," said Archer. 
"While we have begun to see encouraging progress due to operational efficiencies, grade control and cost reductions, we continue to review all areas of our business with the aim of reducing overall costs even further, and remain committed to long term profitability and growth."            
Indeed, initiatives to improve grade control at the company's two operating mines in Mexico, Guanajuato and Topia, are being implemented, the company said. 
Mining contracts at Guanajuato are also under review, with the aim of reducing site costs in the second half of the year. 
Revenue fell 7 per cent in the first quarter to $12.64 million from $13.63 million a year earlier, as  higher output and volumes sold were offset by rising costs and lower realized prices for metals. 
The company estimates metal production for the year from its two mines will come in between 2.4 million and 2.5 million silver equivalent ounces. 
It is also progressing the development of its San Ignacio project, which remains on track, Great Panther said, with anticipated production next year.

Estrella Gold moves forward with exploration, search for new assets

Estrella Gold Corp (CVE:EST) is moving ahead with project exploration and the search for new projects, it told investors late Thursday. 
The company has implemented a program of operating cost reductions, specifically admin expenses and property holding costs, and is now looking ahead to focus on moving its projects forward and acquiring new assets. 
It currently has four properties under option or joint venture agreements. 
The junior gold company gave updates on each of these projects in a statement released late Thursday, after meetings between Estrella's team in Peru and each of the joint venture partners. 
At the Yanac project in Peru, where it is partnered with Cliffs Natural Resources Exploration, further exploration work is planned, with updates to be provided in the coming months as work progresses. Cliffs must spend US$500,000 in year one on exploration or pay the same amount to Estrella, with an additional payment of US$250,000 required to maintain its 50 per cent stake. 
At the La Estrella project, funded by Mines Management, exploration will continue for a second year, according to the statement, with permits being waited on for drilling. Under the terms of the agreement, Estrella's 25 per cent stake is carried to production with proportionate costs paid back to Mines Management from production profits. 
Estrella also has an option agreement with Lara Exploration on the Isy project, which makes up a part of the Sami project owned by Lara. Lara has the option to buy the Isy claims by paying US$175,000 over the next two years to Estrella, and issuing 50,000 shares, after already paying US$80,000.Estrella will also get a 1.5 per cent net smelter returns royalty on the project. 
The Pucarana project, which is currently in the process of having a 60-40 joint venture finalized with Esperanza Resources Corp, sits just 15 km from the Poracota mine, which has become one of the largest gold producers in South America. 
Estrella also said Thursday that its geological team in Peru is active in looking for new projects as companies drop properties due to a lack of financing amid a challenging time for junior explorers. 
Separately, after the general meeting earlier this week, John Wilson was reappointed president and chief executive, while Winnie Wong was reappointed as CFO. Directors were also appointed as expected, the company said.

Snipp Interactive Q1 revenue soars as mobile marketing platform propels growth

Snipp Interactive (CVE:SPN) has grown first quarter revenues by 85 per cent year-over-year as the mobile marketing firm continues to bolster its presence. 
For the three months to March 31, net income rose to $135,163 from a net loss of $697,959 in the prior year period. The company said the latest results were mainly due to a non-cash gain.  
Before non-operating items, net loss was wider than a year ago at $398,235 versus $229,719 as the company dedicated more resources to sales and marketing as well as to investment in its platform. 
And this investment paid off. Revenues jumped to $174,331 from $94,235 in the same quarter last year, attributable to new sales channels, additional sales contracts from existing customers, as well as new clients and the launch of new products like SnippCheck - a mobile receipt processing service - and SnippWine. 
The company's newest product - SnippWine - provides a full suite of mobile-based marketing tools for wineries, including shipping alerts, a mobile site builder, social sharing functionality, the SnippCeck mobile receipt processing service to process rebate and coupon programs, as well as a contest engine. 
Snipp is also working on the "soon to be released SnippShip" and other similar products, it said. The company's "Mobilize Me" platform includes three mobile specific solutions - response, infrastructure and validation - which collectively allow brands to interact with their customers through mobile across the entire purchase lifecycle.
Headquartered in Washington, D.C. and established in 2007, the company has provided its services to several Fortune 500 companies and other major brands, advertising agencies and publishers, including Wal-Mart (NYSE:WMT), Time Inc, Ford (NYSE:F), Nike (NYSE:NKE), Wendy's (NASDAQ:WEN) and Campbell Soup (NYSE:CPB). It also worked on new campaigns last year with Taco Bell & ESPN, Meredith Corp, Arm & Hammer, and James Hardie, and launched Snipp in Mexico and the Middle East, "executing successful campaigns in both markets for leading brands", it said. 
"We are very pleased that our go-to-market strategy continues to be validated as our sales revenues continue to grow rapidly and propels us ever closer to being operationally cash flow positive," said CEO Atul Sabharwal in the release Friday. 
"Our focus continues to be on growing new and recurring revenue with the aim of achieving cash flow profitability. The fact is that we are at the beginning of a mobile revolution that presents an unprecedented opportunity for companies like ours."
Indeed, the company figures that as an increasing number of people spend more time carrying out traditional web-based activities such as shopping and social interaction on their mobile devices, every company will need to start implementing a "mobile optimized layer" for their business to support this growing trend. This puts Snipp's mobile marketing platform in an ideal position. 
In the first quarter, Snipp said its product teams finalized two new product offerings that will launch in the second quarter, which will be consumer-focused self service tools, allowing the company to expand into new market segments. Currently, the Mobilize Me platform is only available on a full-service basis to large brands.
In the release Friday, it said four key initiatives "are expected to bear fruit for the company", any one of which can drive significant revenue and profitability gains, but Snipp did not expand on this any further in the statement. 
In the second quarter, Snipp will be integrating its SnippWine suite into eWinery's platform, and will launch the eWinery Mobile Marketing Solution. Customers of eWinery, which has more than 600 clients in the U.S. and major wine producing regions of the world, will therefore be able to launch and manage mobile programs through the eWinery interface. 
eWinery currently controls over 70 per cent of the $600 million direct to consumer wine business in the USA, according to the statement. 
The company also said that SnippCheck, its other new product, has more than ten million of potential transactions in the pipeline for the coming year. 
Snipp, which ended the first quarter with current assets of $660,947 and liabilities of $228,940, will continue to ramp up international sales as well, with plans to launch a number of products and campaigns for the Middle East region in the coming months, and a big potential deal in the works in Mexico.

Cadillac Ventures raises $1.2 mln for Burnt Hill

Cadillac Ventures (CVE:CDC) says it has put to bed a $1.2 million private placement financing despite a challenging time for junior exploration companies. 
The company closed the private placement of 20 million units at a price of 6 cents each, with each unit made up of one common share and one share purchase warrant. Each warrant is exerciseable for 30 months following closing, for an additional share at a price of 10 cents apiece. 
Sino-Canada Natural Resources Fund I subscribed for 100 per cent of the offering, now owning roughly 12.1 per cent of Cadillac, or 21.7 per cent assuming full exercise of its warrants. 
The shareholder also now has the right to appoint one director to Cadillac's board, for so long as Sino-Canada owns more than 7 per cent of the stock. It has nominated Bing Pan, with Pan to be appointed as soon as possible. 
Cadillac says it plans to use the new funds for expenditures on its Canadian exploration properties and for working capital needs. 
Earlier this month, the company announced the discovery of polymetallic veining consisting of silver and copper at its Burnt Hill property in New Brunswick - the first such discovery at the property to the company's knowledge. 
The Burnt Hill property stretches 11,000 hectares and although historical prospecting activity was carried out during the 1970s, work largely focused on the Burnt Hill mine site, and did not include exploration for silver. 
The historic tungsten/tin mine was actually taken to test production by Cadillac's CEO Norman Brewster for Canadian International Paper during the early 1980s. The company is working to update the resource model at the deposit, with results from 16 recent drill holes not previously included in the existing NI 43-101 report. 

Belvedere Resources to mull options at Hitura

Belvedere Resources (CVE:BEL) says it is assessing putting ore from its Kopsa gold project through the Hitura mill in Finland.
It comes after the firm last week announced the suspension of mining at the Hitura nickel mine in response to the low nickel price.
Releasing first quarter results, chief executive David Pym told investors: "Despite good performance at the mine in Q1, low nickel prices have subsequently forced the suspension of mining operations at Hitura. 
"Management is closely monitoring the situation, and should nickel prices improve sufficiently during the lay-off period, the company intends to re-commence production. 
"Meanwhile, management continues to focus on bringing forward its gold projects, and in particular the Kopsa gold project, for which the results of several key studies are expected over the coming months."
These studies will better inform a decision on the economic viability and likely capital requirements associated with exploitation of the Kopsa gold deposit, the firm said.
In terms of any restart to nickel operations, the firm said capital requirements to begin again are expected to be minimal and cash flows from any operational restart would be expected to resume late in the third quarter.
"If by the end of the lay-off period (late August 2013) nickel prices have not improved to support a full restart, the company will be forced to consider its options including a limited restart of operations to mine high grade ores and/or consider full closure," it said.
For the three months to end March, Belvedere posted revenue of €6 million (Q1, 2012: 8.8mln) and a net loss of €346,000 (2012: profit of €1.3 mln).

IMIC increases stake in bid target Afferro Mining

International Mining & Infrastructure Corporation (LON:IMIC) has increased its stake in its takeover target Afferro Mining (LON:AFF) to 9.94% through the purchase of an additional 5.2 mln shares.
IMIC has made a cash and share offer for Cameroon iron explorer Afferro that values it at US$190mln (£126mln) or 120p a share, which includes a cash element worth 80p. 
It bought its latest trance of Afferro shares at average price of 77.89p on the open market.
As a result of this share purchase, an option for IMIC to acquire up to 1.8% of Afferro with associated voting rights has been cancelled.
Afferro’s board recently said it would recommend IMIC’s offer to shareholders subject to the completion of the financing arrangements.

Xcite Energy looks at longer term rig alternatives

Xcite Energy (LON:XEL, CVE:XEL) revealed it is looking at alternative development drilling plans for its Bentley field as it has now cancelled a rig contract with Rowan.
It had an option for a Rowan jack-up rig however Xcite says it no longer believes the terms and structure of the rig option are appropriate for its commercialobjectives.
The oil field developer massively increased the Bentley heavy oil field’s reserves in April, up to 198-312mln barrels, and that has triggered the re-think, towards a more long term solution.
It is now in talks with other rig providers over alternative commercial solutions which it believes will have better ‘strategic alignment’ and structures to reflect an amended field development programme.
Additionally, the company said that expressions of interest have now been issued to a number of drill rig providers to formally develop an optimised drilling solution for the Bentley field.
“The amendments to the Bentley field development plan have given us the opportunity to construct a more commercially attractive and longer term approach to drilling up the field, and we are encouraged by the alternative structures that the industry has to offer. 
 “We look forward to updating the market in due course on the outcome of this initiative, which could further enhance the economics of the Bentley field development."

Thursday 30 May 2013

Latin American Minerals identifies important targets at Paso Yobai

Latin American Minerals (CVE:LAT) (OTCQX:LATNF) says that bulk sampling at its Independencia Mine Discovery Zone has allowed the company to operate in a challenging time for junior explorers, as it has managed to continue exploration and identify important targets at its Paso Yobai gold project in Paraguay.
The recent activity at the Independencia Mine bulk-sampling operation at Paso Yobai -- described in the Management's Discussion and Analysis filed on SEDAR -- shows that Discovery Trend mineralization has now been continuously exposed over a 375 metre strike length.
The operation at the site allows for intensive mineral sampling from the surface to a depth of 20 metres, verified by bulk-sample processing, from which proceeds are reinvested to support the operation. To date Latin American Minerals has produced 858 troy ounces of gold and 240 troy ounces of silver, with total proceeds from all doré sales of $1.4 million.
The company has also announced the initial findings of the geophysical surveys being conducted over seven gold-mineralized target sectors at the Paso Yobai project.
The company said Thursday it has identified a potential mineral target below 150 metres depth, which has been detected to run parallel to the Discovery Zone trend, and has been prioritized for drill testing. 
Eight new discrete drill targets have been delineated over an area of 2000 m x 1500 m at the company's landmark Tacurú Block, where gold was first drilled on the 14.8 km X-Mile Trend, located 3.5 km east of the Discovery Trend.
Geophysical surveys are continuing at the project with the expectation of producing additional drill targets, Latin American said. It expects to complete this targeting work by mid-year.
The company said Thursday that it anticipates that proceeds from bulk sampling will cover all routine production and corporate overhead expenses before the end of the calendar year. At the operation, high-grade ore is processed on site and the recovered gold is smelted into doré bars, which is then sold to a refinery in Canada, with the proceeds financing operations and basic exploration costs at Paso Yobai.
The accumulated gross sales for 2013 to date is $722,446, well up on the amounts for 2012, which were recorded as bringing in $686,560 in gross sales over the entire year. The company sees this trend of increasing gold sales as likely to continue as it continues to improve efficiencies at the bulk-sampling facility, it said. 
"The bulk-sampling program is proving the Discovery Trend mineralization to be continuous along strike, validating our drill data,” said president and CEO Miles Rideout.
“The proceeds from the sales of gold doré product are significant and assist the company to operate effectively in this challenging market. The geophysical surveys have revolutionized our understanding of the project and will greatly facilitate follow-up drilling. Our current focus is to complete target identification in the remaining sectors using this new data."

New Zealand Energy implements measures to reduce production costs, boost output

New Zealand Energy Corp. (CVE:NZ)(OTCQX:NZERF) announced Wednesday lower first quarter revenue and production year-on-year, but said it is implementing measures to reduce production costs and increase oil output by installing permanent production facilities at its Copper Moki site. 
According to the statement today, methods identified to optimize output could also include stimulation of well flow with condensate washes, modified pumping mechanisms or other forms of reservoir stimulation. 
The company said total "comprehensive income" for the three months to March 31 was $1.3 million, or a loss of 2 cents per share, compared to $0.8 million, or breakeven per share, in the year-ago period. 
Revenues declined to $2.93 million from $3.91 million in the first quarter of 2012, as production from its four wells, and prices, dropped. The company still, however, posted positive net cash flow from petroleum operations in the quarter of approximately $1.2 million.
Output of oil from its wells in the Taranaki Basin of New Zealand was 30,179 barrels in the latest period, down from 39,852 barrels a year earlier, but up from 29,516 barrels in the previous quarter. 
Realized prices also declined year-over-year to $112.35 per barrel, from $117.94 a barrel in the first quarter of 2012, but improved on the price of $103.98 per barrel in the fourth quarter of last year. 
Production costs during the most recent period totalled $1.69 million, or an average of $62.08 per barrel, generating an average field netback, calculated as the oil sale price less fixed and variable operating costs and a 5 per cent royalty, of $45.29 per barrel.
The Vancouver-based company said that while the field netback in the first quarter increased compared to the fourth quarter as a result of the higher realized oil price, field netbacks declined year-on-year on the lower oil output tied to well declines and higher fixed production costs. 
New Zealand Energy said Wednesday it has undertaken a number of reservoir and production tests in recent months with the aim of optimizing output and recovery, which have expectedly added to production costs. In the latest first quarter, fixed production costs made up roughly 89 per cent of total production costs. 
The junior oil and gas company is looking at ways to reduce these costs, associated with manpower and equipment rentals, and to boost production. It has already installed permanent facilities at its Copper Moki site in the Taranaki Basin of New Zealand, with the facilities now being commissioned. 
The company says the new quarters are expected to lower costs "considerably" in the future as the equipment is owned by New Zealand Energy and operated and maintained by its employees. 
Late in February, the junior oil and gas company announced the decision to delay further drilling to focus on the completion of its acquisition from Origin Energy as its plans are to focus in the near-term on lower-cost exploration and production opportunities that are close to infrastructure in a bid to bolster cash flow. 
Indeed, the acquisition from Origin, which is expected to close once terms of the agreement are finalized, includes the Waihapa Production Station, and associated gathering and sales infrastructure, as well as four petroleum licenses in the main Taranaki Basin production fairway. 
The company's four wells at Taranaki, consisting of 3 Copper Moki wells and the Waitapu-2 well, are producing light oil that is trucked to the Shell-operated Omata tank farm and sold at Brent pricing. 
New Zealand Energy has also completed a natural gas pipeline from the Copper Moki site to the Waihapa Production Station, and is considering laying 1.3 kilometres of natural gas pipeline to tie-in Waitapu-2 to the station, though the company is not yet generating cash flow from its natural gas production. 
The company invested around $12 million of cash in resource properties, plant and equipment in the first quarter, and had a net working capital position of about $12 million earlier this month. It says it is considering a number of options to increase its financial capacity to carry out acquisitions and other activities.  
A review is underway to evaluate the Canadian company's drilling and completion operations to date, with the aim of restarting drilling operations early in the third quarter of this year. It expects to start drilling a Mt. Messenger target well in the third quarter. The company has also begun the consent and permitting process for two exploration wells on its East Coast Basin properties.
Shares of New Zealand Energy rose by a penny in early deals Wednesday, to 41.5 cents.

Drilling confirms new gold zone at Klondex site in Nevada

Klondex Mines (TSE:KDX) (OTCQX:KLNDF) has announced the discovery of mineralization in the new West Zone at its Fire Creek gold project in Nevada Thursday, saying that significant mineralization has been intercepted in five exploratory drill holes.
The longest interpreted vein now extends at least 97.5 metres (320ft) to the south from an earlier discovery. It was this earlier discovery that prompted a shifting of focus in the company’s drill program.
"In response to the vent-raise access discovery earlier this year, we interrupted the infill drill program in the east and turned the drills around to test for an extension of the new-found mineralization,” said chief geologist Steve McMillin in a company statement issued with the announcement.
“We are extremely pleased we hit multiple intercepts in three of five drill holes and shown additional continuity in a previously unexplored area of Fire Creek. The new zone supports our thesis that the exploration upside at Fire Creek extends well-beyond our current mineral resource borders and the project is underexplored at the current time."
All five holes drilled to test for an extension of the vent-raise access discovery returned mineralization from the drilling program, which totalled more than 1,071.37metres (3,515ft) in length. Three of the five holes returned several intercepts.
One hole that reported a gold intercept of 67.4 grams per tonne (g/t) gold over 0.3 metres (1.0ft) was deemed by the company “a likely candidate for an extension of vent raise mineralization located 320 feet southeast from the vent raise.”
Two of the holes, FC13-063U and FC13-065U, contain intercepts that are at least 60.96 metres (200ft) west of the mineralization discovered earlier and have the potential to represent new zones, dependent on the findings of further exploration drilling, the company said. 
These holes returned intercepts of 77.8 g/t gold over 0.7 metres (2.3ft) and 23.4 g/t gold over 1.4 metres (4.5ft).
It is another piece of good news for the company less than a week after the advanced-stage developer was touted in an analyst’s note from influential natural resources investment bank Casimir Capital as having a high grade resource in a strategic location with potential for a "number of upside opportunities.”
In that note, the analyst, Eric Winmill, gave Klondex a speculative buy rating and a target price of $2.50 per share, a figure which at the time was twice the company’s trading price. The analyst noted that the company benefits from a fortuitous location – the property is situated at the intersection of the Battle Mountain trend and Northern Nevada Rift, which also hosts the Midas and Hollister narrow-vein epithermal gold deposits. Aside from being surrounded by major producers, it is also proximate to power, transportation, infrastructure and a milling facility in the heart of the U.S. state’s gold trend.
An initial bulk sampling program from the property is scheduled for the third quarter with the aim of extracting approximately 10,000 tons of material in the remainder of 2013 with targets for next year to be announced with the completion of an updated mineral resource estimate – expected in June.
Klondex Mines and its subsidiary, Klondex Gold and Silver Mining Co., have a focus on exploration and development of mineral properties in Nevada, primarily on gold and silver deposits. The 1,235 acre Fire Creek property in north central Nevada is 100 per owned by the Vancouver-based company and is its principal property.
Stock in the developer was trading up on the TSX the day of the announcement, adding 13 cents to the company’s share price, a bump of 10 per cent, to hit $1.43 per share in intraday trading.

Omthera acquisition highlights upside potential of Pivotal Therapeutics

A recent deal in the pharmaceutical sector has shone a light on the fact that Pivotal Therapeutics (CNSX:PVO) (OTCQX:PVTTF) is undervalued, with investors seeing potential for the stock to be valued at up to $500 million, compared to its current market cap of just over $11 million. 
Earlier this week, Omthera Pharmaceuticals' (NASDAQ:OMTH) market value nearly doubled in the wake of UK-basedAstraZeneca (NYSE:AZN) agreeing to acquire the company for $12.70 per share, an 88 per cent premium to Omthera's closing price the last trading day before the deal was announced. In addition to the cash offer, Omthera shareholders will also get a conditional $4.70 per share if the company reaches certain milestones, pushing the total value of the deal to up to $443 million. 
Both Omthera and Pivotal are in the business of Omega-3 therapies, which are widely known to boost overall cardiac health. Omthera's Epanova, a therapy designed to help regulate lipoprotein abnormalities, still needs regulatory approvals, while Pivotal's Vascazen Omega-3 FDA regulated medical food product, which avoided the lengthy FDA pre-approval process that is required with drugs, is already available with a prescription in all major pharmacies throughout the U.S. 
"The Omthera buy is rather interesting as it puts a value on an early-stage Omega 3 company of up to $450 million for a drug that is not yet on the market," says Navroze Alphonse, the portfolio managing partner of Crossover Healthcare Fund, a major shareholder in Pivotal Therapeutics with a 15 per cent holding. 
He says that this shows just how undervalued Pivotal is, drawing on some comparisons in the field. Indeed, Amarin(NASDAQ:AMRN), which has its Vascepa Omega 3 drug on the market, is valued at almost $1 billion, while Omthera, which has the yet-to-be approved prescription-grade fish oil Epanova, is valued at nearly $450 million with earn-outs following the AstraZenecaacquisition. Neptune Technologies & Bioressources (NASDAQ:NEPT), which has its Krill oil, which Alphonse concedes is slightly different, is valued at roughly $168 million. 
Meanwhile, Pivotal Therapeutics, whose Omega 3 medical food product Vascazen was second to market behindGlaxoSmithKline's Lovaza, is valued at a mere $11.12 million. Currently, the company's sales reps are focused on marketing the product on the eastern seaboard in the U.S., which it says contains the highest prevalence of cardiovascular disease-related illness in the nation.
"Out of all of these, Pivotal is most interesting to me as it has a slightly different approach to Omega 3 therapies in that its medical food product treats a deficiency, which addresses a much larger market," says Alphonse. 
"The product is already regulated by the FDA and available on the market as a medical food so it could also easily be combined in theory with statins drugs from a larger pharma company, which one would assume is one of the things Astra wants to do with Omthera, and this could give a lot more value to Pivotal," he adds, attributing the undervaluation of the Canadian company partly to the medical food product category being new in the field of cardiovascular therapies. 
"Ultimately, there is no reason why Pivotal over time should not be valued in the $400 to $500 million range due to the strength of its unique formulation and that its medical food product addresses a much bigger market by treating an Omega 3 deficiency rather than a specific area of cardiovascular disease.
"This is what the cardiologists in our network want to see."
The company's product, Vascazen, is an FDA-regulated medical food product developed to lower cardiovascular health risks in Omega-3 deficient cardiac patients, including high triglycerides, or fatty substances in the blood that are associated with coronary disease. 
The 90 percent-pure product, which was introduced in the U.S. in November 2011, provides those suffering from heart disease with levels of the most important Omega-3 fatty acids in fish oil – EPA and DHA – that the company says are ideal, and cannot be achieved just through simple changes in diet alone.
Pivotal earlier this month revealed that results from a clinical trial showed that its Vascazen product was highly effective in correcting an Omega-3 deficiency. Indeed, after eight weeks of treatment, the company said a "statistically significant" increase of 121 per cent in the Omega-Score and 112 per cent in the Omega-Index - both diagnostic tests that measure circulating blood levels of Omega-3 in individuals - was seen in the Vascazen-treated subjects. Pivotal also said that the trial showed that secondary goals, such as a 48 per cent triglyceride reduction, exceeded company expectations, and levels of HDL - known as the "good cholesterol" - actually increased. 
The main aim of the trial was to show that cardiovascular disease patients are nutritionally deficient in Omega-3 fatty acids, and through treatment with Vascazen, such deficiency can be corrected - resulting in improved patient lipid profiles, and ultimately reducing risk factors of heart disease. 
As the goal of the study has been met, the company is kicking into high gear as it looks to advance the commercialization of its product with a full-scale launch in the U.S. Just this week, it reported that first quarter sales jumped to $73,642 from $3,322 a year earlier, leaving it with vast potential for upward growth. 
Analyst Juan Noble of Taglich Brothers recently wrote in a research report that he predicts that by 2017, Pivotal's revenue should ramp up to around $61 million, with the company anticipated to be cash flow positive by late this year. 
Its stock is currently trading on the CNSX and the OTCQX at 14 cents, with almost 80 million shares issued and outstanding, giving it a market cap of $11.12 million.

Southern Arc's re-focused strategy pays off with "encouraging" West Lombok drill results ahead of upcoming resource estimate

Southern Arc Minerals (CVE:SA) (OTCQX: SOACF) shares were up Thursday after reporting encouraging results from its West Lombok property in Indonesia, ahead of an upcoming resource estimate expected by the middle of this year. 
The drilling results were from the Tibu Serai and the Bising targets at the Mencanggah prospect on the property, with 12 holes drilled altogether, for a total of 1,696 metres.  
The company told investors Thursday that the results show the consistency of the wide mineralized body along the 500-metre strike of the Bising Hill target, as well as highlight the potential of higher grade zones at Tibu Serai. All drill results can be viewed on the company’s website atwww.southernarcminerals.com
Southern Arc has now given all the drilling and exploration data collected so far from the West Lombok project to SRK Consulting, which is undertaking an NI 43-101 compliant resource report - expected by mid-2013. 
The company said the upcoming resource report is expected to provide an inferred resource estimate for the property that includes epithermal gold mineralization from parts of the Pelangan prospect and the Mencanggah prospect, where the Bising and Tibu Serai targets are located, as well as porphyry copper-gold mineralization from the Selodong prospect. 
The NI 43-101 report will also include SRK's recommendations for next steps at the project, including additional drilling for both resource upgrade and expansion. 
"We have seen consistently strong drill results at the West Lombok property, and look forward to the results of the SRK report," said chairman and CEO of Southern Arc, John Proust, in the statement Thursday. "With West Lombok successfully advanced to this stage, Southern Arc may consider bringing a partner to the project to accelerate West Lombok's advancement while reducing financial exposure and risk to Southern Arc's shareholders."
The release of the drilling results came in hand with the company's quarterly financials, which were released in a separate statement. Total assets as at the end of the quarter were $53.9 million, with a working capital position of $15.16 million as of March 31. It posted a net loss of $6.5 million or 6 cents per share. 
"Southern Arc's treasury is one of its key assets in what is undeniably a difficult capital market. While our share price has followed the general downward trend of most resource companies, having current working capital of approximately $14 million puts Southern Arc in a unique position among our peers and provides the financial flexibility to consider new opportunities that can bring near-term value to our shareholders," said Proust. 
Indeed, at the end of last year, the company implemented a strategy to pursue advanced-stage gold projects in new jurisdictions, after conducting a strategic review of its assets. Its priority was to proceed with drilling at West Lombok, while retaining the "no-cost" joint venture interest in the East Elang property in Indonesia, which sits next to Newmont Mining's Elang-Dodo copper-gold asset. Southern Arc also decided to sell its Taliwang property and relinquish the Sabalong project, in an effort to focus its resources on West Lombok as well as new opportunities. 
The West Lombok project covers a 13-km long by 7-km wide structural corridor of mineralization hosting porphyry copper-gold and epithermal gold deposits.
Shares of Southern Arc rose 12.5 per cent, or 1.5 cents, on Thursday, to trade at 13.5 cents as of mid-morning.