Fox-Davies Capital Wednesday Energy and Mining News Wrap

Petrofac (PFC) started production from the Don SW field in the UK North Sea. This follows first oil from the West Don field on 28 April. A second phase of the Don SW development is already at advanced stage of planning and could be brought on-stream in the second half of next year.

Matra Petroleum (MTA) has received approval from Russian authorities to extend its Arkhangelovskoe licence in Orenburg to the north of the existing boundary and to extend the licence period until the end of 2010. The previous licence boundary left some 50% of the structure of the Sokolovskoe discovery and 70% of Recoverable Contingent Resources outside the licence area. This is a very positive and important development for the company.

Hochschild (HOC) announced that it has exercised its option to purchase a further 5M shares of Gold Resource Corporation ("GRC") for a total cash consideration of $20M, representing a 20% discount to the previous 30 day average closing price as at 24 June 2009. The purchase will be completed in two tranches: a $5M dollars investment which closed on June 30, 2009 and a second tranche of $15M dollars, which will close by 20 July 2009. On completion of the purchase, which will be funded from existing cash, Hochschild will have a 23.9% interest in GRC, a US OTC traded underground precious metals mining company with a number of prime development projects in southern Mexico.

The investment increases Hochschild's exposure to GRC's high grade,low cost ounces in a mining friendly country with significant mineral potential, and expands the Group's Southern Mexico operational cluster following Hochschild's initial investment in GRC in December 2008. GRC will use $16M of the proceeds to complete the El Aguila project. El Aguila is currently expected to commence production in the second half of 2009 at 70 thousand ounces of gold per year (4.2M silver equivalent ounces), subject to obtaining remaining permits and regulatory approval. The deposit comprises 75% gold and silver and 25% zinc, copper and lead at current prices. The remaining investment will be used to advance GRC’s exploration efforts around the La Arista, Margaritas, El Rey and El Aguila properties.

Mano River Resources (MANA) and African Aura Resources Ltd announced that they have entered into the definitive combination agreement (the "Combination Agreement") in respect of their proposed merger, as contemplated in the previously announced letter of intent between the companies dated 15 April 2009, as amended on 14 May 2009 and 12 June 2009 (the “LOI"). As previously announced, Mano River will offer 1.57 Mano River shares for every one African Aura share in order to acquire the entire issued share capital of African Aura. The terms of the Combination Agreement are substantially similar to the terms of the LOI.

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