Advanced Medical Solutions (AIM: AMS) has confirmed that it received and subsequently rejected an approach from Consort Medical (AIM: CSRT). AMS said it received a verbal indication of a possible offer price, which was firmly rejected by both the board and nominated advisor Investec.
Since rejecting the verbal approach AMS has not received a revised approach, nor to date has it received any formal written offer from Consort. Consequently the board advised shareholders to take no action at this stage and further announcements will be made if necessary.
Earlier this morning, Consort told investors that it made an approach which may or may not lead to an offer being made for AMS.
AMS provides a range of advanced wound-care products under the ActivHeal brand, and through private label distributors. The company’s wound closure and sealants division, AMS, has developed tissue adhesives for closing wounds in the Accident & Emergency and Operating Room areas.
Consort Medical’s product portfolio includes medical device technologies for drug delivery and for the management of patient airways. The company’s King Systems unit is a US manufacturer of medical devices used by anaesthetists and emergency crews to establish and maintain patient airways in both hospital and pre-hospital settings. The Bespak unit develops and manufactures Metered Dose Inhaler (MDI) and Dry Powder Inhaler (DPI) devices to deliver drugs to sufferers of asthma and COPD.
http://www.proactiveinvestors.co.uk/companies/news/13816/advanced-medical-solutions-firmly-rejects-consort-medicals-verbal-offer-13816.html
Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London.
Friday, 26 February 2010
FTSE 100 climbs as Q4 UK GDP growth revised up to 0.3%, US futures point to flat open ahead of data
Overview: the FTSE 100 recovered from yesterday’s falls, climbing 0.5% today after US stocks trimmed early losses on Thursday and Asian markets rallied earlier today. The market was supported by today’s reading of the Q4 UK GDP, which was revised upwards to an increase of 0.3% from 0.1%.
Serco Group (LSE: SRP) was the top performing blue chip today, rallying 6% after releasing its final results. Other notable risers included pharmaceutical company AstraZeneca (LSE: AZN) and retailer Next (LSE: NXT), which gained slightly more than 2%.
Part-nationalized banks Lloyds (LSE: LLOY) and RBS (LSE: RBS) were at the bottom of the index with losses of 5.5% and 2.5%. Commercial property companies Hammerson (LSE: HMSO) and Segro (LSE: SGRO) lost 2.5% and 2% respectively. Telecom group BT (LSE: BT.A) also shed 2%. Credit information group Experian (LSE: EXPN) and mobile operator Vodafone (LSE: VOD) lost slightly more than 1.5%, while another property stock British Land (SLE: BLND) was down 1.3%.
Futures for the Dow Jones Industrial Average and the S&P 500 index were marginally higher, while futures for the technology focused NASDAQ composite were flat ahead of today’s flurry of economic data including Q4 US GDP data, the Chicago PMI (Purchasing Managers Index) and New York ISM (Institute of Supply Management) updates as well as the University of Michigan consumer sentiment index.
Commodities
Oil prices inched lower in the afternoon after making gains earlier today as the US dollar weakened against the euro ahead of today’s US economic data.
A weaker US dollar makes dollar denominated commodities such as crude cheaper for holders of other currencies, driving up the demand.
This week’s inventories report from the Energy Information Administration (EIA) had little impact on the crude prices, which held steady despite an unexpected increase of 3 million barrels in crude stockpiles last week, signalling weaker demand. At the same time, gasoline and distillate stocks including heating oil declined by 900,000 barrels and 600,000 barrels respectively.
Earlier in the week, data from API (American petroleum Institute) revealed that stockpiles fell by 3.1 million barrels last week instead of an expected increase. Gasoline stocks added 1.7 million barrels, while distillate stocks including heating oil were down by 834,000 barrels, which was a lesser decline than projected.
April Brent Crude slid to US$76.21/barrel on the ICE Exchange, while US light, sweet crude inched lower to US$78.14 on the New York Mercantile Exchange today.
Blue chip oil and gas producers were in buying mode today. Tullow Oil (LSE: TLW) and Cairn Energy (LSE: CNE) advanced 1.3%, while BG Group (LSE: BG) added 1%. BP (LSE: BP) rose 1.1%, while fellow supermajor Shell (SLE: RDSB) added less than 1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) were up 1% and 2% respectively.
Most midcaps followed the trend. Melrose Resources (LSE: MRS) climbed 5% to take the lead. JKX Oil & Gas (LSE: JKX) rose 2%, Dana Petroleum (LSE: DNX) tacked on 1.7% and Premier Oil (LSE: PMO) climbed 1.1%. Soco International (LSE: SIA) and Salamander Energy (LSE: SMDR) were flat, while Heritage Oil (SLE: HOIL) posted a small decline.
Dragon Oil (LSE: DGO) was at the bottom of the pile with a 2.4% loss.
Services companies Wood Group (LSE: WG) and Wellsteam Holdings (LSE: WSM) did well, climbing 1.8% and 1.6% respectively.
Junior stocks didn’t show much movement today. North America focused oil & gas junior Pantheon Resources (AIM: PANR) moved with the sector, adding 4%.
Gold reaches $1,100 on rumored IMF gold sale to China
Gold retreated below US$1,110/oz after rising to US$1,114/oz earlier today on reports that China is set to buy the gold that IMF (International Monetary Fund) is currently shopping. Last week, IMF announced the sale of 191.3 tonnes of gold out of the total 403.3 tonnes earmarked for sale. IMF sold the first 212 tonnes to India, Sri Lanka and Mauritius last year.
The yellow metal got further support from a weaker US dollar, which declined ahead of today’s flurry of US economic data.
Today’s recovery in global stock markets following yesterday’s sharp falls also bolstered gold, which is seen as a riskier investment alternative to the US dollar.
Gold last traded at US$1,109/oz, while fellow precious metals headed in a different direction with silver and platinum sliding to US$16.10/oz and US$1,527/oz respectively.
All major miners were on the rise today. Platinum producer Lonmin (LSE: LMI) and silver and gold miner Fresnillo (LSE: FRES) led the pack with gains of 1.8%, while fellow blue chip Randgold Resources (LSE: RRS) advanced 1.6%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.
Midcaps also were in demand as gold miner Petropavlovsk (LSE: POG) added 2.8% and silver producer Hochschild Mining (LSE: HOC) climbed 1.6%. Aquarius Platinum (LSE: AQP) rose marginally.
London listed Australian gold producer Leyshon Resources (AIM: LRL) led the juniors with a gain of 8%, while Africa focused gold miner Pan African Resources (AIM: PAF) added 4.5%.
Africa operating gold miner GMA Resources (AIM: GMA) declined 4%.
Miners gain as base metals advance
Base metals were higher today. Copper and nickel reached US$3.21/lb and US$9.21/lb respectively, while zinc improved to US$0.97/lb.
Miners were higher as metal prices rose. Vedanta Resources (LSE: VED) was the top performer with a 2.7% gain. Anglo American (LSE: AAL) and Rio Tinto (LSE: RIO) followed, climbing 2.3%, while Antofagasta (LSE: ANTO) and Eurasian Natural Resources (LSE: ENRC) added 2.2% and 2% respectively.
Kazakhmys (LSE: KAZ) tacked on 1.7% and BHP Billiton (LSE: BLT) and Xstrata (LSE: XTA) climbed 1.4%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) outperformed the sector with a 3.6% advance.
South American focused junior miner Herencia Resources (AIM: HER) led the juniors with a 9% climb after commencing a diamond drill programme at its Paguanta project in Chile. Iron ore focused investor Red Rock Resources (AIM: RRR) rose 5.5%.
Banks, insurance, private equity
Banking stocks were mixed today. Part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were in decline, shedding 5.7% and 2.3% respectively. Barclays (LSE: BARC) was flat, while HSBC (LSE: HSBA) posted a small gain and Standard Chartered (LSE: STAN) advanced 1.3%.
Insurers were in buying mode today. Aviva (LSE: AV) was in the lead with a 3.3% climb. Old Mutual (SLE: OML) was close, gaining 3%. Standard Life (LSE: SL) and Legal & general (LSE: LGEN) tacked on about 2%, Prudential (LSE: PRU) and Admiral Group (LSE: ADM) were up 1.5% and 1.4% respectively, while RSA Insurance Group (SLE: RSA) was flat.
Private equity group 3i (LSE: III) added 1.4%.
Small Cap Movers
Other notable movers among the small caps included African focussed soft commodity specialist, Agriterra Limited (AIM: AGTA), which rallied 12%.
Large and Mid Cap News
Turbines and aircraft engines maker Rolls-Royce PLC (LSE: RR) announced a recommended 67 pence per share cash offer for the remaining holding in ODIM ASA (OSX: ODIM), valuing the Norwegian marine technology company at approximately £154 million.
Web-based UK property search-portal Rightmove (LSE: RMV) reported underlying operating profit growth of 2% from £41.0m to £41.9min in the full year ended 31 December 2009, and noted that the number of advertisers using the portal increased by 6% to 17,664.
Small Cap News
Equatorial Palm Oil (AIM: PAL) joined London’s AIM market this morning following a £6.5m IPO. The newly listed, £14.3m market-cap company is developing sustainable palm oil plantations and a crude palm oil (CPO) processing operation in Liberia. According to EPO, palm oil is the most important and widely produced edible oil in the world, and demand is projected to grow at 5-6% per annum over the next five years.
Minera IRL Limited (AIM: MIRL) has signed an option to purchase the Quilavira gold exploration project in the Tacna district of southern Peru from Ingerieria y Tecnologia Minero-Metalurgica SA (ITMM). The tenements were previously explored by Newcrest Mining (ASX: NCM). The proposed US$50,000 deal is subject to approvals in Peru.
Perth-based exploration and development group Berkeley Resources (AIM, ASX: BKY) are pleased to advise completion of the first stage Mineral Resource Estimates, which has resulted in the doubling of its resource to 52 Mlbs U308 for the Salamanca Uranium Project in Spain.
Pan Andean Resources (AIM: PRE) provided investors with an update regarding the demerger of its North American and Bolivian operations, and the Petrominerales (TSX: PMG) acquisition of its Colombian and Peruvian assets. Pan Andean sent the relevant proposal documents to investors today, ahead of a shareholder vote at a general meeting which is scheduled for the 22 March 2010.
ViaLogy (LSE: VIY) has raised approximately £2.88m through the placing of 59.1m new shares with existing shareholders at a price of 4.875p per share. The proceeds will be used in to further expand ViaLogy's Energy business, which uses the proprietary QuantumRD seismic interpretation technology to location and analyse oil well sites.
Caledon Resources (AIM: CDN) said coal demand has picked up in the final quarter of 2009 and recovery in prices continued in Q1 2010 after the demand fell earlier in the year amid the economic downturn, impacting coal prices and driving down the company’s revenues.
FinnCap said that African Diamonds’ AK6 project in Botswana will be the most lucrative new open pit hard rock diamond project to enter production in the next 10 years. The stockbroker initiated its coverage with a ‘buy’ recommendation, targeting 108p per share. The analyst believes that the recently upgraded top-end diamond valuation, of US$200/carat, could prove to be conservative.
NF Energy Saving Corporation (OTCBB: NFEC) anticipates its 2009 full year revenues to rise 28% year-on-year to US$20-21 million, while earnings per share are expected to soar 250% to US$0.35 with more growth eyed in 2010.
SeaEnergy (AIM: SEA) has been named Company of the Year at the Rosenblatt New Energy Awards 2010. The award recognises the company which made the most meaningful progress or made the biggest impact in the renewable energy sector during the year. The company is currently participating in the large government-backed offshore wind-farm development in the North Sea.
WH Ireland issued a report on Goldplat (AIM: GDP), retaining its 'speculative buy' recommendation for the Africa operating gold and platinum miner and calling it the world’s only fully funded independent exploration junior with large feedstock samples that guaranteed revenue for a number of years.
Avocet Mining (AIM: AVM) has completed the first shipment of gold from its Inata mine in Burkina Faso. The company exported 11,000 ounces of gold to Rand Refinery's facility in South Africa, following Inata’s first pour on 20 December 2009. Proceeds of approximately US$12m are expected to be received next week.
Petra Diamonds (AIM: PDL) has sold the 507 carat Cullinan Heritage diamond for US$35.3m, which is the highest recorded sale price for a rough diamond. Hong Kong based jeweller Chow Tai Fook bought the diamond through a tender process in South Africa.
Herencia Resources (AIM: HER) has commenced a 3,500 metre diamond drill programme at its Paguanta zinc-silver-lead-gold project targeting potential high grade extensions to the known mineralisation after the previous drill programme returned high grade assay results in 2008.
Broker Fairfax issued a note on International Ferro Metals (AIM: IFL) today, projecting the surging ferrochrome prices to push the company back into profit and giving it a 'buy' rating. It also increased the price target to 61 pence compared to the previous target of 59 pence and a market value of around 33.75 pence.
In a brief note, Gulfsands Petroleum (AIM: GPX) informed investors that it would now release its preliminary results for the year to end-December 2009 on Tuesday 30 March 2010, rather than 29 March as previously announced.
http://www.proactiveinvestors.co.uk/companies/news/13812/ftse-100-climbs-as-q4-uk-gdp-growth-revised-up-to-03-us-futures-point-to-flat-open-ahead-of-data-13812.html
Serco Group (LSE: SRP) was the top performing blue chip today, rallying 6% after releasing its final results. Other notable risers included pharmaceutical company AstraZeneca (LSE: AZN) and retailer Next (LSE: NXT), which gained slightly more than 2%.
Part-nationalized banks Lloyds (LSE: LLOY) and RBS (LSE: RBS) were at the bottom of the index with losses of 5.5% and 2.5%. Commercial property companies Hammerson (LSE: HMSO) and Segro (LSE: SGRO) lost 2.5% and 2% respectively. Telecom group BT (LSE: BT.A) also shed 2%. Credit information group Experian (LSE: EXPN) and mobile operator Vodafone (LSE: VOD) lost slightly more than 1.5%, while another property stock British Land (SLE: BLND) was down 1.3%.
Futures for the Dow Jones Industrial Average and the S&P 500 index were marginally higher, while futures for the technology focused NASDAQ composite were flat ahead of today’s flurry of economic data including Q4 US GDP data, the Chicago PMI (Purchasing Managers Index) and New York ISM (Institute of Supply Management) updates as well as the University of Michigan consumer sentiment index.
Commodities
Oil prices inched lower in the afternoon after making gains earlier today as the US dollar weakened against the euro ahead of today’s US economic data.
A weaker US dollar makes dollar denominated commodities such as crude cheaper for holders of other currencies, driving up the demand.
This week’s inventories report from the Energy Information Administration (EIA) had little impact on the crude prices, which held steady despite an unexpected increase of 3 million barrels in crude stockpiles last week, signalling weaker demand. At the same time, gasoline and distillate stocks including heating oil declined by 900,000 barrels and 600,000 barrels respectively.
Earlier in the week, data from API (American petroleum Institute) revealed that stockpiles fell by 3.1 million barrels last week instead of an expected increase. Gasoline stocks added 1.7 million barrels, while distillate stocks including heating oil were down by 834,000 barrels, which was a lesser decline than projected.
April Brent Crude slid to US$76.21/barrel on the ICE Exchange, while US light, sweet crude inched lower to US$78.14 on the New York Mercantile Exchange today.
Blue chip oil and gas producers were in buying mode today. Tullow Oil (LSE: TLW) and Cairn Energy (LSE: CNE) advanced 1.3%, while BG Group (LSE: BG) added 1%. BP (LSE: BP) rose 1.1%, while fellow supermajor Shell (SLE: RDSB) added less than 1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) were up 1% and 2% respectively.
Most midcaps followed the trend. Melrose Resources (LSE: MRS) climbed 5% to take the lead. JKX Oil & Gas (LSE: JKX) rose 2%, Dana Petroleum (LSE: DNX) tacked on 1.7% and Premier Oil (LSE: PMO) climbed 1.1%. Soco International (LSE: SIA) and Salamander Energy (LSE: SMDR) were flat, while Heritage Oil (SLE: HOIL) posted a small decline.
Dragon Oil (LSE: DGO) was at the bottom of the pile with a 2.4% loss.
Services companies Wood Group (LSE: WG) and Wellsteam Holdings (LSE: WSM) did well, climbing 1.8% and 1.6% respectively.
Junior stocks didn’t show much movement today. North America focused oil & gas junior Pantheon Resources (AIM: PANR) moved with the sector, adding 4%.
Gold reaches $1,100 on rumored IMF gold sale to China
Gold retreated below US$1,110/oz after rising to US$1,114/oz earlier today on reports that China is set to buy the gold that IMF (International Monetary Fund) is currently shopping. Last week, IMF announced the sale of 191.3 tonnes of gold out of the total 403.3 tonnes earmarked for sale. IMF sold the first 212 tonnes to India, Sri Lanka and Mauritius last year.
The yellow metal got further support from a weaker US dollar, which declined ahead of today’s flurry of US economic data.
Today’s recovery in global stock markets following yesterday’s sharp falls also bolstered gold, which is seen as a riskier investment alternative to the US dollar.
Gold last traded at US$1,109/oz, while fellow precious metals headed in a different direction with silver and platinum sliding to US$16.10/oz and US$1,527/oz respectively.
All major miners were on the rise today. Platinum producer Lonmin (LSE: LMI) and silver and gold miner Fresnillo (LSE: FRES) led the pack with gains of 1.8%, while fellow blue chip Randgold Resources (LSE: RRS) advanced 1.6%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.
Midcaps also were in demand as gold miner Petropavlovsk (LSE: POG) added 2.8% and silver producer Hochschild Mining (LSE: HOC) climbed 1.6%. Aquarius Platinum (LSE: AQP) rose marginally.
London listed Australian gold producer Leyshon Resources (AIM: LRL) led the juniors with a gain of 8%, while Africa focused gold miner Pan African Resources (AIM: PAF) added 4.5%.
Africa operating gold miner GMA Resources (AIM: GMA) declined 4%.
Miners gain as base metals advance
Base metals were higher today. Copper and nickel reached US$3.21/lb and US$9.21/lb respectively, while zinc improved to US$0.97/lb.
Miners were higher as metal prices rose. Vedanta Resources (LSE: VED) was the top performer with a 2.7% gain. Anglo American (LSE: AAL) and Rio Tinto (LSE: RIO) followed, climbing 2.3%, while Antofagasta (LSE: ANTO) and Eurasian Natural Resources (LSE: ENRC) added 2.2% and 2% respectively.
Kazakhmys (LSE: KAZ) tacked on 1.7% and BHP Billiton (LSE: BLT) and Xstrata (LSE: XTA) climbed 1.4%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) outperformed the sector with a 3.6% advance.
South American focused junior miner Herencia Resources (AIM: HER) led the juniors with a 9% climb after commencing a diamond drill programme at its Paguanta project in Chile. Iron ore focused investor Red Rock Resources (AIM: RRR) rose 5.5%.
Banks, insurance, private equity
Banking stocks were mixed today. Part-nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) were in decline, shedding 5.7% and 2.3% respectively. Barclays (LSE: BARC) was flat, while HSBC (LSE: HSBA) posted a small gain and Standard Chartered (LSE: STAN) advanced 1.3%.
Insurers were in buying mode today. Aviva (LSE: AV) was in the lead with a 3.3% climb. Old Mutual (SLE: OML) was close, gaining 3%. Standard Life (LSE: SL) and Legal & general (LSE: LGEN) tacked on about 2%, Prudential (LSE: PRU) and Admiral Group (LSE: ADM) were up 1.5% and 1.4% respectively, while RSA Insurance Group (SLE: RSA) was flat.
Private equity group 3i (LSE: III) added 1.4%.
Small Cap Movers
Other notable movers among the small caps included African focussed soft commodity specialist, Agriterra Limited (AIM: AGTA), which rallied 12%.
Large and Mid Cap News
Turbines and aircraft engines maker Rolls-Royce PLC (LSE: RR) announced a recommended 67 pence per share cash offer for the remaining holding in ODIM ASA (OSX: ODIM), valuing the Norwegian marine technology company at approximately £154 million.
Web-based UK property search-portal Rightmove (LSE: RMV) reported underlying operating profit growth of 2% from £41.0m to £41.9min in the full year ended 31 December 2009, and noted that the number of advertisers using the portal increased by 6% to 17,664.
Small Cap News
Equatorial Palm Oil (AIM: PAL) joined London’s AIM market this morning following a £6.5m IPO. The newly listed, £14.3m market-cap company is developing sustainable palm oil plantations and a crude palm oil (CPO) processing operation in Liberia. According to EPO, palm oil is the most important and widely produced edible oil in the world, and demand is projected to grow at 5-6% per annum over the next five years.
Minera IRL Limited (AIM: MIRL) has signed an option to purchase the Quilavira gold exploration project in the Tacna district of southern Peru from Ingerieria y Tecnologia Minero-Metalurgica SA (ITMM). The tenements were previously explored by Newcrest Mining (ASX: NCM). The proposed US$50,000 deal is subject to approvals in Peru.
Perth-based exploration and development group Berkeley Resources (AIM, ASX: BKY) are pleased to advise completion of the first stage Mineral Resource Estimates, which has resulted in the doubling of its resource to 52 Mlbs U308 for the Salamanca Uranium Project in Spain.
Pan Andean Resources (AIM: PRE) provided investors with an update regarding the demerger of its North American and Bolivian operations, and the Petrominerales (TSX: PMG) acquisition of its Colombian and Peruvian assets. Pan Andean sent the relevant proposal documents to investors today, ahead of a shareholder vote at a general meeting which is scheduled for the 22 March 2010.
ViaLogy (LSE: VIY) has raised approximately £2.88m through the placing of 59.1m new shares with existing shareholders at a price of 4.875p per share. The proceeds will be used in to further expand ViaLogy's Energy business, which uses the proprietary QuantumRD seismic interpretation technology to location and analyse oil well sites.
Caledon Resources (AIM: CDN) said coal demand has picked up in the final quarter of 2009 and recovery in prices continued in Q1 2010 after the demand fell earlier in the year amid the economic downturn, impacting coal prices and driving down the company’s revenues.
FinnCap said that African Diamonds’ AK6 project in Botswana will be the most lucrative new open pit hard rock diamond project to enter production in the next 10 years. The stockbroker initiated its coverage with a ‘buy’ recommendation, targeting 108p per share. The analyst believes that the recently upgraded top-end diamond valuation, of US$200/carat, could prove to be conservative.
NF Energy Saving Corporation (OTCBB: NFEC) anticipates its 2009 full year revenues to rise 28% year-on-year to US$20-21 million, while earnings per share are expected to soar 250% to US$0.35 with more growth eyed in 2010.
SeaEnergy (AIM: SEA) has been named Company of the Year at the Rosenblatt New Energy Awards 2010. The award recognises the company which made the most meaningful progress or made the biggest impact in the renewable energy sector during the year. The company is currently participating in the large government-backed offshore wind-farm development in the North Sea.
WH Ireland issued a report on Goldplat (AIM: GDP), retaining its 'speculative buy' recommendation for the Africa operating gold and platinum miner and calling it the world’s only fully funded independent exploration junior with large feedstock samples that guaranteed revenue for a number of years.
Avocet Mining (AIM: AVM) has completed the first shipment of gold from its Inata mine in Burkina Faso. The company exported 11,000 ounces of gold to Rand Refinery's facility in South Africa, following Inata’s first pour on 20 December 2009. Proceeds of approximately US$12m are expected to be received next week.
Petra Diamonds (AIM: PDL) has sold the 507 carat Cullinan Heritage diamond for US$35.3m, which is the highest recorded sale price for a rough diamond. Hong Kong based jeweller Chow Tai Fook bought the diamond through a tender process in South Africa.
Herencia Resources (AIM: HER) has commenced a 3,500 metre diamond drill programme at its Paguanta zinc-silver-lead-gold project targeting potential high grade extensions to the known mineralisation after the previous drill programme returned high grade assay results in 2008.
Broker Fairfax issued a note on International Ferro Metals (AIM: IFL) today, projecting the surging ferrochrome prices to push the company back into profit and giving it a 'buy' rating. It also increased the price target to 61 pence compared to the previous target of 59 pence and a market value of around 33.75 pence.
In a brief note, Gulfsands Petroleum (AIM: GPX) informed investors that it would now release its preliminary results for the year to end-December 2009 on Tuesday 30 March 2010, rather than 29 March as previously announced.
http://www.proactiveinvestors.co.uk/companies/news/13812/ftse-100-climbs-as-q4-uk-gdp-growth-revised-up-to-03-us-futures-point-to-flat-open-ahead-of-data-13812.html
Crude retreats after making gains ahead of US data, oil and gas stocks advance
Oil prices inched lower in the afternoon after making gains earlier today as the US dollar weakened against the euro ahead of today’s US economic data, which will include the preliminary reading of the Q4 US GDP, the Chicago PMI (Purchasing Managers Index) and New York ISM (Institute of Supply Management) updates as well as the University of Michigan consumer sentiment index.
A weaker US dollar makes dollar denominated commodities such as crude cheaper for holders of other currencies, driving up the demand.
This week’s inventories report from the Energy Information Administration (EIA) had little impact on the crude prices, which held steady despite an unexpected increase of 3 million barrels in crude stockpiles last week, signalling weaker demand. At the same time, gasoline and distillate stocks including heating oil declined by 900,000 barrels and 600,000 barrels respectively.
Earlier in the week, data from API (American petroleum Institute) revealed that stockpiles fell by 3.1 million barrels last week instead of an expected increase. Gasoline stocks added 1.7 million barrels, while distillate stocks including heating oil were down by 834,000 barrels, which was a lesser decline than projected.
April Brent Crude slid to US$76.21/barrel on the ICE Exchange, while US light, sweet crude inched lower to US$78.14 on the New York Mercantile Exchange today.
Blue chip oil and gas producers were in buying mode today. Tullow Oil (LSE: TLW) and Cairn Energy (LSE: CNE) advanced 1.3%, while BG Group (LSE: BG) added 1%. BP (LSE: BP) rose 1.1%, while fellow supermajor Shell (SLE: RDSB) added less than 1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) were up 1% and 2% respectively.
Most midcaps followed the trend. Melrose Resources (LSE: MRS) climbed 5% to take the lead. JKX Oil & Gas (LSE: JKX) rose 2%, Dana Petroleum (LSE: DNX) tacked on 1.7% and Premier Oil (LSE: PMO) climbed 1.1%. Soco International (LSE: SIA) and Salamander Energy (LSE: SMDR) were flat, while Heritage Oil (SLE: HOIL) posted a small decline.
Dragon Oil (LSE: DGO) was at the bottom of the pile with a 2.4% loss.
Services companies Wood Group (LSE: WG) and Wellsteam Holdings (LSE: WSM) did well, climbing 1.8% and 1.6% respectively.
Junior stocks didn’t show much movement today. North America focused oil & gas junior Pantheon Resources (AIM: PANR) moved with the sector, adding 4%.
http://www.proactiveinvestors.co.uk/companies/news/13809/crude-retreats-after-making-gains-ahead-of-us-data-oil-and-gas-stocks-advance-13809.html
A weaker US dollar makes dollar denominated commodities such as crude cheaper for holders of other currencies, driving up the demand.
This week’s inventories report from the Energy Information Administration (EIA) had little impact on the crude prices, which held steady despite an unexpected increase of 3 million barrels in crude stockpiles last week, signalling weaker demand. At the same time, gasoline and distillate stocks including heating oil declined by 900,000 barrels and 600,000 barrels respectively.
Earlier in the week, data from API (American petroleum Institute) revealed that stockpiles fell by 3.1 million barrels last week instead of an expected increase. Gasoline stocks added 1.7 million barrels, while distillate stocks including heating oil were down by 834,000 barrels, which was a lesser decline than projected.
April Brent Crude slid to US$76.21/barrel on the ICE Exchange, while US light, sweet crude inched lower to US$78.14 on the New York Mercantile Exchange today.
Blue chip oil and gas producers were in buying mode today. Tullow Oil (LSE: TLW) and Cairn Energy (LSE: CNE) advanced 1.3%, while BG Group (LSE: BG) added 1%. BP (LSE: BP) rose 1.1%, while fellow supermajor Shell (SLE: RDSB) added less than 1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) were up 1% and 2% respectively.
Most midcaps followed the trend. Melrose Resources (LSE: MRS) climbed 5% to take the lead. JKX Oil & Gas (LSE: JKX) rose 2%, Dana Petroleum (LSE: DNX) tacked on 1.7% and Premier Oil (LSE: PMO) climbed 1.1%. Soco International (LSE: SIA) and Salamander Energy (LSE: SMDR) were flat, while Heritage Oil (SLE: HOIL) posted a small decline.
Dragon Oil (LSE: DGO) was at the bottom of the pile with a 2.4% loss.
Services companies Wood Group (LSE: WG) and Wellsteam Holdings (LSE: WSM) did well, climbing 1.8% and 1.6% respectively.
Junior stocks didn’t show much movement today. North America focused oil & gas junior Pantheon Resources (AIM: PANR) moved with the sector, adding 4%.
http://www.proactiveinvestors.co.uk/companies/news/13809/crude-retreats-after-making-gains-ahead-of-us-data-oil-and-gas-stocks-advance-13809.html
Gulfsands Petroleum puts back preliminary results by 1 day to 30 March
In a brief note, Gulfsands Petroleum (AIM: GPX) informed investors that it would now release its preliminary results for the year to end-December 2009 on Tuesday 30 March 2010, rather than 29 March as previously announced.
Earlier this week, Edison Investment Research upgraded its RENAV (risked exploration net asset value) for the group to 301p from 263p, reflecting higher near-term oil price assumptions and de-risking of the Yousefieh field and the inclusion of five exploration prospects in the risked valuation.
Proven and probable reserves attributable to Gulfsands at 31 December 2008 were 28.7 million barrels of oil working interest and 10.9mmbbl entitlement. The oilfield developer has assets in Syria, Iraq and the United States.
Since the end of the period, Gulfsands has been making considerable progress in advancing the development of its middle-eastern projects. Last week, Gulfsands’ Khurbet East Field reached a significant production milestone, with 7 million barrels of cumulative oil production now complete. The oilfields average daily gross oil production continues at approximately 17,000 barrels oil per day (bopd), with minimal water production or pressure depletion to date.
Development of the Khurbet East Field continues as the Early Production Facility continues to yield positive production rates. In January, the Khurbet East (KHE)-14 delineation well at its Block 26 in Syria intersected an oil column and flowed at 613 barrels of oil per day, indicating a deeper field oil-down-to (ODT) depth.
http://www.proactiveinvestors.co.uk/companies/news/13808/gulfsands-petroleum-puts-back-preliminary-results-by-1-day-to-30-march-13808.html
Earlier this week, Edison Investment Research upgraded its RENAV (risked exploration net asset value) for the group to 301p from 263p, reflecting higher near-term oil price assumptions and de-risking of the Yousefieh field and the inclusion of five exploration prospects in the risked valuation.
Proven and probable reserves attributable to Gulfsands at 31 December 2008 were 28.7 million barrels of oil working interest and 10.9mmbbl entitlement. The oilfield developer has assets in Syria, Iraq and the United States.
Since the end of the period, Gulfsands has been making considerable progress in advancing the development of its middle-eastern projects. Last week, Gulfsands’ Khurbet East Field reached a significant production milestone, with 7 million barrels of cumulative oil production now complete. The oilfields average daily gross oil production continues at approximately 17,000 barrels oil per day (bopd), with minimal water production or pressure depletion to date.
Development of the Khurbet East Field continues as the Early Production Facility continues to yield positive production rates. In January, the Khurbet East (KHE)-14 delineation well at its Block 26 in Syria intersected an oil column and flowed at 613 barrels of oil per day, indicating a deeper field oil-down-to (ODT) depth.
http://www.proactiveinvestors.co.uk/companies/news/13808/gulfsands-petroleum-puts-back-preliminary-results-by-1-day-to-30-march-13808.html
Gold reaches $1,100 as US dollar falls ahead of Chicago PMI, New York ISM and US GDP data
Gold retreated below US$1,110/oz after rising to US$1,114/oz earlier today on reports that China is set to buy the gold that IMF (International Monetary Fund) is currently shopping. Last week, IMF announced the sale of 191.3 tonnes of gold out of the total 403.3 tonnes earmarked for sale. IMF sold the first 212 tonnes to India, Sri Lanka and Mauritius last year.
The yellow metal got further support from a weaker US dollar, which declined ahead of today’s flurry of US economic data, including the Q4 US GDP data, the University of Michigan consumer sentiment index and the Chicago PMI and New York ISM updates.
Today’s recovery in global stock markets following yesterday’s sharp falls also bolstered gold, which is seen as a riskier investment alternative to the US dollar.
Gold last traded at US$1,109/oz, while fellow precious metals headed in a different direction with silver and platinum sliding to US$16.10/oz and US$1,527/oz respectively.
All major miners were on the rise today. Platinum producer Lonmin (LSE: LMI) and silver and gold miner Fresnillo (LSE: FRES) led the pack with gains of 1.8%, while fellow blue chip Randgold Resources (LSE: RRS) advanced 1.6%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.
Midcaps also were in demand as gold miner Petropavlovsk (LSE: POG) added 2.8% and silver producer Hochschild Mining (LSE: HOC) climbed 1.6%. Aquarius Platinum (LSE: AQP) rose marginally.
London listed Australian gold producer Leyshon Resources (AIM: LRL) led the juniors with a gain of 8%, while Africa focused gold miner Pan African Resources (AIM: PAF) added 4.5%.
Africa operating gold miner GMA Resources (AIM: GMA) declined 4%.
http://www.proactiveinvestors.co.uk/companies/news/13805/gold-reaches-1100-as-us-dollar-falls-ahead-of-chicago-pmi-new-york-ism-and-us-gdp-data-13805.html
The yellow metal got further support from a weaker US dollar, which declined ahead of today’s flurry of US economic data, including the Q4 US GDP data, the University of Michigan consumer sentiment index and the Chicago PMI and New York ISM updates.
Today’s recovery in global stock markets following yesterday’s sharp falls also bolstered gold, which is seen as a riskier investment alternative to the US dollar.
Gold last traded at US$1,109/oz, while fellow precious metals headed in a different direction with silver and platinum sliding to US$16.10/oz and US$1,527/oz respectively.
All major miners were on the rise today. Platinum producer Lonmin (LSE: LMI) and silver and gold miner Fresnillo (LSE: FRES) led the pack with gains of 1.8%, while fellow blue chip Randgold Resources (LSE: RRS) advanced 1.6%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) rose marginally.
Midcaps also were in demand as gold miner Petropavlovsk (LSE: POG) added 2.8% and silver producer Hochschild Mining (LSE: HOC) climbed 1.6%. Aquarius Platinum (LSE: AQP) rose marginally.
London listed Australian gold producer Leyshon Resources (AIM: LRL) led the juniors with a gain of 8%, while Africa focused gold miner Pan African Resources (AIM: PAF) added 4.5%.
Africa operating gold miner GMA Resources (AIM: GMA) declined 4%.
http://www.proactiveinvestors.co.uk/companies/news/13805/gold-reaches-1100-as-us-dollar-falls-ahead-of-chicago-pmi-new-york-ism-and-us-gdp-data-13805.html
Fairfax ups International Ferro Metals target, says company has expansion and takeover potential
Broker Fairfax issued a note on International Ferro Metals (AIM: IFL) today, projecting the surging ferrochrome prices to push the company back into profit and giving it a 'buy' rating. It also increased the price target to 61 pence compared to the previous target of 59 pence and a market value of around 33.75 pence.
The report said that the market seems to be turning in IFM’s favour as ferrochrome prices are projected to settle between US$1.25-1.30/lb in the March quarter this year as production issues constrain the supply of premium quality chromite ore from Eti Chrome in Turkey to smelters, chopping a significant quantity of production capacity out of the market.
Fairfax has made adjustments in its modelling as the tightening of the supply chain through restocking lost inventory levels is likely to distort prices received for production and has led producers to set higher benchmark prices for this year.
Meanwhile, stainless steel producers are recovering lost demand with up to 80% capacity forecast for the sector this year and new production capacity is likely to be brought in as producers compete for market share.
The broker expects IFM to post its first uninterrupted period of ferrochrome production in the second half of 2010, while cash costs are projected to be maintained at US$0.80/lb despite a 25% rise in power costs in South Africa, which will be offset by a recovery in production and a weaker rand. IFM has received assurances from South African power utility Eskom that it should have sufficient power to maintain normal operation during the football World Cup in South Africa this year and for its planned expansion of furnaces, both of which are beyond current market expectations, said Fairfax.
Apart from the potential expansion beyond the current capacity of two furnaces, Fairfax noted the company’s takeover potential as some of the key industry players will likely look into acquiring the company as prices and demand climb.
Fairfax projects the company to achieve sales of US$206.5 million, which is more than double last year’s US$100.4 million, which will then increase to US$357.6 million, US$381.5 million and US$392.8 million in 2011, 2012 and 2013 respectively before hitting US$404.6 million in 2014. EBITDA (earnings before interest, taxes, depreciation and amortisation are expected to climb to US$78 million next year form this year’s projected US$2 million before increasing to over US$90 million for the following three years through 2014.
The report concluded that IFM will gain value this year, being highly leveraged to the SA rand and to ferrochrome prices, which it said were both moving in “helpful directions,” putting the stock in a position to benefit from the recovery in demand. Fairfax continued to recommend the company for its leverage and forecast revaluation.
http://www.proactiveinvestors.co.uk/companies/news/13804/fairfax-ups-international-ferro-metals-target-says-company-has-expansion-and-takeover-potential-13804.html
The report said that the market seems to be turning in IFM’s favour as ferrochrome prices are projected to settle between US$1.25-1.30/lb in the March quarter this year as production issues constrain the supply of premium quality chromite ore from Eti Chrome in Turkey to smelters, chopping a significant quantity of production capacity out of the market.
Fairfax has made adjustments in its modelling as the tightening of the supply chain through restocking lost inventory levels is likely to distort prices received for production and has led producers to set higher benchmark prices for this year.
Meanwhile, stainless steel producers are recovering lost demand with up to 80% capacity forecast for the sector this year and new production capacity is likely to be brought in as producers compete for market share.
The broker expects IFM to post its first uninterrupted period of ferrochrome production in the second half of 2010, while cash costs are projected to be maintained at US$0.80/lb despite a 25% rise in power costs in South Africa, which will be offset by a recovery in production and a weaker rand. IFM has received assurances from South African power utility Eskom that it should have sufficient power to maintain normal operation during the football World Cup in South Africa this year and for its planned expansion of furnaces, both of which are beyond current market expectations, said Fairfax.
Apart from the potential expansion beyond the current capacity of two furnaces, Fairfax noted the company’s takeover potential as some of the key industry players will likely look into acquiring the company as prices and demand climb.
Fairfax projects the company to achieve sales of US$206.5 million, which is more than double last year’s US$100.4 million, which will then increase to US$357.6 million, US$381.5 million and US$392.8 million in 2011, 2012 and 2013 respectively before hitting US$404.6 million in 2014. EBITDA (earnings before interest, taxes, depreciation and amortisation are expected to climb to US$78 million next year form this year’s projected US$2 million before increasing to over US$90 million for the following three years through 2014.
The report concluded that IFM will gain value this year, being highly leveraged to the SA rand and to ferrochrome prices, which it said were both moving in “helpful directions,” putting the stock in a position to benefit from the recovery in demand. Fairfax continued to recommend the company for its leverage and forecast revaluation.
http://www.proactiveinvestors.co.uk/companies/news/13804/fairfax-ups-international-ferro-metals-target-says-company-has-expansion-and-takeover-potential-13804.html
Petra Diamonds receives world record US$35.3m for 507 carat Cullinan diamond
Petra Diamonds (AIM: PDL) has sold the 507 carat Cullinan Heritage diamond for US$35.3m, which is the highest recorded sale price for a rough diamond. Hong Kong based jeweller Chow Tai Fook bought the diamond through a tender process in South Africa.
The proceeds from the sale add to Petra's treasury and give it further flexibility in funding the development of the underground operations at Cullinan in South Africa and the expansion project at the Williamson mine. The company said that both developments represent important steps in taking Petra's annual production from one million carats to over three million carats by 2019.
Petra said the record price reflects the incredible rarity of the diamond, which combines both a remarkable size, and exceptional colour and clarity. At 507.5 carats Cullinan Heritage is the nineteenth largest gem diamond ever discovered.
"It is fitting that The Cullinan Heritage should achieve a sale price of US$35.3 million, the highest sale price on record ever achieved for a rough diamond”, Petra CEO Johan Dippenaar commented. “it has the potential to produce one of the world's most important polished gems”
The Cullinan Heritage was recovered in September 2009 from the Cullinan mine, which has produced the majority of the world's most famous and important diamonds, Petra said. According to Petra, the Cullinan kimberlite pipe is the second largest indicated diamond resource in the world by in-situ value, totalling 204m carats. The company led a consortium to acquire the Cullinan mine from De Beers in July 2008, for R1bn.
The mine is named after the 'Cullinan' diamond, which was discovered at the site in 1905, at 3,106 carats Cullinan remains the world's largest ever gem diamond. Cullinan has produced over 300 stones weighing more than 100 carats, and around a quarter of all of the world's diamonds weighing more than 400 carats.
The mine has now produced four of the top 20 largest rough-gem diamonds, the other three are the ‘Cullinan’ at 3,106 carats, the ‘Golden Jubilee’ at 755 carats, the ‘Centenary’ with 599 carats rough. Cullinan is also the source of the world’s two largest polished diamonds including the ‘Golden Jubilee’ and the Great Star of Africa with 530 carats.
Chow Tai Fook has not advised Petra of their plans for the diamond.
http://www.proactiveinvestors.co.uk/companies/news/13803/petra-diamonds-receives-world-record-us353m-for-507-carat-cullinan-diamond-13803.html
The proceeds from the sale add to Petra's treasury and give it further flexibility in funding the development of the underground operations at Cullinan in South Africa and the expansion project at the Williamson mine. The company said that both developments represent important steps in taking Petra's annual production from one million carats to over three million carats by 2019.
Petra said the record price reflects the incredible rarity of the diamond, which combines both a remarkable size, and exceptional colour and clarity. At 507.5 carats Cullinan Heritage is the nineteenth largest gem diamond ever discovered.
"It is fitting that The Cullinan Heritage should achieve a sale price of US$35.3 million, the highest sale price on record ever achieved for a rough diamond”, Petra CEO Johan Dippenaar commented. “it has the potential to produce one of the world's most important polished gems”
The Cullinan Heritage was recovered in September 2009 from the Cullinan mine, which has produced the majority of the world's most famous and important diamonds, Petra said. According to Petra, the Cullinan kimberlite pipe is the second largest indicated diamond resource in the world by in-situ value, totalling 204m carats. The company led a consortium to acquire the Cullinan mine from De Beers in July 2008, for R1bn.
The mine is named after the 'Cullinan' diamond, which was discovered at the site in 1905, at 3,106 carats Cullinan remains the world's largest ever gem diamond. Cullinan has produced over 300 stones weighing more than 100 carats, and around a quarter of all of the world's diamonds weighing more than 400 carats.
The mine has now produced four of the top 20 largest rough-gem diamonds, the other three are the ‘Cullinan’ at 3,106 carats, the ‘Golden Jubilee’ at 755 carats, the ‘Centenary’ with 599 carats rough. Cullinan is also the source of the world’s two largest polished diamonds including the ‘Golden Jubilee’ and the Great Star of Africa with 530 carats.
Chow Tai Fook has not advised Petra of their plans for the diamond.
http://www.proactiveinvestors.co.uk/companies/news/13803/petra-diamonds-receives-world-record-us353m-for-507-carat-cullinan-diamond-13803.html
Avocet to receive US$12m from 1st gold shipment from Inata, Burkina Faso
Avocet Mining (AIM: AVM) has completed the first shipment of gold from its Inata mine in Burkina Faso. The company exported 11,000 ounces of gold to Rand Refinery's facility in South Africa, following Inata’s first pour on 20 December 2009. Proceeds of approximately US$12m are expected to be received next week.
Avocet’s Burkina Faso based subsidiary signed a refining contract with Rand Refinery earlier this month. By July, the Inata mine is expected to reach a steady state production rate of over 10,000 ounces. "Since first gold was poured the plant has performed ahead of expectations, and gold production to date has been well above our ramp-up schedule", Avocet CEO Jonathan Henry commented.
Avocet acquired the Inata mine through the all share acquisition of Oslo listed Wega Mining earlier this year. Inata hosts a measured and indicated resource of 1.4 million ounces. Avocet Mining already operates two gold mines, in Malaysia and Indonesia.
The company’s wholly-owned Penjom unit is Malaysia's largest gold producer, Avocet developed the project from a grass roots exploration area into a commercially producing gold mine. The mine is located in Pahang State, approximately 120 km north of Kuala Lumpur. The mine was commissioned in December 1996 with reserves of 223,000 ounces.
http://www.proactiveinvestors.co.uk/companies/news/13802/avocet-to-receive-us12m-from-1st-gold-shipment-from-inata-burkina-faso-13802.html
WH Ireland retains 'speculative buy' for Goldplat, says stockpiles guarantee revenues
WH Ireland issued a report on Goldplat (AIM: GDP), retaining its 'speculative buy' recommendation for the Africa operating gold and platinum miner and calling it the world’s only fully funded independent exploration junior with large feedstock samples that guaranteed revenue for a number of years.
The broker said that the company was an excellent proposition for risk tolerant investors due to its stockpiles and cash flows, which it said were substantial for a company of this size. The stock was given what WH Ireland said was a conservative after-tax NPV (net present value) of £21.3 million or 19 pence per share fully diluted compared to the current market price of 9.75 pence.
Goldplat posted a 4% increase in revenues in its interim results to £5.44 million due to higher commodity prices. Gold production declined 31% to 8,309 oz (ounces) in the first half, yet the cash costs were “reasonable” at US$794/oz. As a result, the broker adjusted its NPAT (net profit after tax) projection for the full year 2010 downward by 13% to £1.92 million, largely retaining its original estimate after the management said that H2 production would be higher than the for the first half.
These production variations were called a “normal course of business,” which in Goldplat’s case is strongly cash-generative with such variations expected even with the plant running at full capacity, the broker said.
At the same time, WH Ireland noted the company’s tendency to “under promise and over deliver,” which led to its decision to generate an NPV despite its historic avoidance to attribute such valuation given the management’s desire to reinvest funds into either exploration of judicious acquisitions.
WH Ireland projected the company to post revenues of £10.57 million for this year, which will then stay above £13 million through 2013, while EBIT (earnings before interest and taxes) will increase from this year’s £3.29 million to £5.06 million in 2011 and amount to £4.85 million and £4.50 million in 2012 and 2013 respectively.
Results from previous exploration at Goldplat’s recently optioned Nyieme gold project in Burkina Faso included values of between 1 and 100 g/t (grammes per tonne) gold over a strike distance of over 2 km (kilometres) and intersections of 3 m (metres) graded at 17.48 g/t gold, 1 m at 16.76 g/t gold, 1 m at 4.46 g/t gold and 1 m at 17.83 g/t gold from a 2,015 m RC (reverse circulation) drilling programme. To prove up the Nyieme Gold project, the company have budgeted US$500,000 for a 2,500m diamond hole drill programme, as well as localised geochemistry and mapping, to be completed sometime in 2010.
Goldplat has also recently purchased the remaining 50% interest in Kilimapesa Gold project for US$2.7 million, from their previous partner, International Gold Exploration. A JORC compliant resource was calculated for the deposit, entailing Measured and Indicated Resource totalling 409,000 t at 2.39 g/t for 31,400 oz gold, and an Inferred Resource of 1.24 Mt at 2.43 g/t for 98,000 oz of gold.
http://www.proactiveinvestors.co.uk/companies/news/13801/wh-ireland-retains-speculative-buy-for-goldplat-says-stockpiles-guarantee-revenues-13801.html
The broker said that the company was an excellent proposition for risk tolerant investors due to its stockpiles and cash flows, which it said were substantial for a company of this size. The stock was given what WH Ireland said was a conservative after-tax NPV (net present value) of £21.3 million or 19 pence per share fully diluted compared to the current market price of 9.75 pence.
Goldplat posted a 4% increase in revenues in its interim results to £5.44 million due to higher commodity prices. Gold production declined 31% to 8,309 oz (ounces) in the first half, yet the cash costs were “reasonable” at US$794/oz. As a result, the broker adjusted its NPAT (net profit after tax) projection for the full year 2010 downward by 13% to £1.92 million, largely retaining its original estimate after the management said that H2 production would be higher than the for the first half.
These production variations were called a “normal course of business,” which in Goldplat’s case is strongly cash-generative with such variations expected even with the plant running at full capacity, the broker said.
At the same time, WH Ireland noted the company’s tendency to “under promise and over deliver,” which led to its decision to generate an NPV despite its historic avoidance to attribute such valuation given the management’s desire to reinvest funds into either exploration of judicious acquisitions.
WH Ireland projected the company to post revenues of £10.57 million for this year, which will then stay above £13 million through 2013, while EBIT (earnings before interest and taxes) will increase from this year’s £3.29 million to £5.06 million in 2011 and amount to £4.85 million and £4.50 million in 2012 and 2013 respectively.
Results from previous exploration at Goldplat’s recently optioned Nyieme gold project in Burkina Faso included values of between 1 and 100 g/t (grammes per tonne) gold over a strike distance of over 2 km (kilometres) and intersections of 3 m (metres) graded at 17.48 g/t gold, 1 m at 16.76 g/t gold, 1 m at 4.46 g/t gold and 1 m at 17.83 g/t gold from a 2,015 m RC (reverse circulation) drilling programme. To prove up the Nyieme Gold project, the company have budgeted US$500,000 for a 2,500m diamond hole drill programme, as well as localised geochemistry and mapping, to be completed sometime in 2010.
Goldplat has also recently purchased the remaining 50% interest in Kilimapesa Gold project for US$2.7 million, from their previous partner, International Gold Exploration. A JORC compliant resource was calculated for the deposit, entailing Measured and Indicated Resource totalling 409,000 t at 2.39 g/t for 31,400 oz gold, and an Inferred Resource of 1.24 Mt at 2.43 g/t for 98,000 oz of gold.
http://www.proactiveinvestors.co.uk/companies/news/13801/wh-ireland-retains-speculative-buy-for-goldplat-says-stockpiles-guarantee-revenues-13801.html
SeaEnergy wins ‘Rosenblatt New Energy Company of the Year’ award
SeaEnergy (AIM: SEA) has been named Company of the Year at the Rosenblatt New Energy Awards 2010. The award recognises the company which made the most meaningful progress or made the biggest impact in the renewable energy sector during the year. The company is currently participating in the large government-backed offshore wind-farm development in the North Sea.
SeaEnergy’s Renewables unit was recognised ahead of fellow nominees Eaga (LSE: EAGA), Terra Firma associate company Infinis and privately-owned Dulas. The Renewables team conceived, developed and delivered the world’s first deep water wind farm development, the Beatrice offshore wind farm demonstrator project.
“Offshore wind power generation is going to make a major contribution to the UK’s energy needs and we’re very excited to be at the heart of it”, SeaEnergy Renewables CEO Joel Staadecker stated.
In January, SeaEnergy confirmed that its joint venture with Portugal’s EDP Renovaveis S.A. (EDPR) was awarded acreage by The Crown Estate to develop offshore wind farms in the Moray Firth, Scotland, with an approximate installed capacity of 1.3 GigaWatt as part of the UK Round 3 awards, enough to power 730,000 homes.
Under the terms of the agreement, signed by EDPR, SeaEnergy’s 80%-held unit SeaEnergy Renewables Ltd and The Crown Estate, the companies have been awarded the exclusive rights to develop wind farm sites within the Zone 1 of the latest round.
The company was also awarded two development sites in the Scottish Round, with partners Scottish & Southern Energy (LSE: SSE) and RWE’s (XETRA: RWE) Npower unit, with a capacity of 1.8 GW.
As noted by Staadecker at last night's awards ceremony, the offshore wind-power industry represents a significant part the UK’s renewable energy strategy. In a recent study, the European Wind Energy Association (EWEA) said that the UK, along with Denmark, is one of the largest wind-power generators in Europe.
According to the EWEA, the UK and Denmark accounted for 44% and 30% of European capacity in 2009, respectively. The trade association said the offshore wind industry generated turnover of approximately €1.5 billion in 2009 and it expects this to double in 2010, reaching over €3 billion.
In the coming year, the trade association expects a further ten offshore wind farms to add 1,000 MW, representing equivalent year-on-year market growth of 75%. Last year five countries built new offshore wind farms: UK (284 MW), Denmark (230 MW), Sweden (30 MW), Germany (30 MW) and Norway (2.3 MW). http://www.proactiveinvestors.co.uk/companies/news/13799/seaenergy-wins-rosenblatt-new-energy-company-of-the-year-award-13799.html
ViaLogy raises £2.88m to progress QuantumRD oil and gas seismic analyser
ViaLogy (LSE: VIY) has raised approximately £2.88m through the placing of 59.1m new shares with existing shareholders at a price of 4.875p per share. The proceeds will be used in to further expand ViaLogy's Energy business, which uses the proprietary QuantumRD seismic interpretation technology to location and analyse oil well sites.
The QuantumRD technology has primarily been used in Texas, where the product’s first five analyses have all been successful, compared to the states average strike rate of approximately 40%.
"The continuing success of ViaLogy's QuantumRD technology, and its ability to accurately predict the correct locations for well drillings in order to maximise the commercial potential of oil and gas deposits, is causing considerable interest in the O&G industry globally”, ViaLogy Terry Bond commented. “Our achievement is being recognised by exploration companies around the world and the additional funding will be used in part to expand ViaLogy's ability to handle the increased demand for its services".
In order to support the product development ViaLogy is currently recruiting additional geophysicists and mathematicians, and it is acquiring additional sophisticated computer equipment.
The new shares are expected to be admitted onto the AIM market on 2 March 2010.
http://www.proactiveinvestors.co.uk/companies/news/13798/vialogy-raises-288m-to-progress-quantumrd-oil-and-gas-seismic-analyser-13798.html
The QuantumRD technology has primarily been used in Texas, where the product’s first five analyses have all been successful, compared to the states average strike rate of approximately 40%.
"The continuing success of ViaLogy's QuantumRD technology, and its ability to accurately predict the correct locations for well drillings in order to maximise the commercial potential of oil and gas deposits, is causing considerable interest in the O&G industry globally”, ViaLogy Terry Bond commented. “Our achievement is being recognised by exploration companies around the world and the additional funding will be used in part to expand ViaLogy's ability to handle the increased demand for its services".
In order to support the product development ViaLogy is currently recruiting additional geophysicists and mathematicians, and it is acquiring additional sophisticated computer equipment.
The new shares are expected to be admitted onto the AIM market on 2 March 2010.
http://www.proactiveinvestors.co.uk/companies/news/13798/vialogy-raises-288m-to-progress-quantumrd-oil-and-gas-seismic-analyser-13798.html
Rightmove FY Results show profit growth despite low UK home sales
Web-based UK property search-portal Rightmove (LSE: RMV) reported underlying operating profit growth of 2% from £41.0m to £41.9min in the full year ended 31 December 2009, and noted that the number of advertisers using the portal increased by 6% to 17,664.
“Rightmove's performance during 2009 reflects the widespread recognition across the residential property industry of the primary importance of the internet as a marketing channel”, Rightmove Chairman Scott Forbes commented. “Research recently conducted indicates that half of all successful UK home buyers in 2009 first saw the property they bought on the internet and two thirds of this group first saw the property on Rightmove”.
Although revenues actually fell 6% from the previous year to £74m, Rightmove’s underlying Earnings per share (EPS) increased by 28% as the company improved margins, repaid debts and bought-back shares. The company proposed a 7p final dividend, taking the year’s total dividend to 10p, in-line with 2008.
The company’s debt situation has greatly improved, at 31 December 2009, Rightmove had net cash of £3.4m, compared with a net debt of £16.9m in the previous year. The company also retired the outstanding £22.5m debt in early February 2010, with no penalties.
The company emphasised that it had achieved underlying profit growth despite historically low home sales in the housing market, with sharply lower numbers of estate agents and new home developments.
According to Rightmove, this growth was the result of prompt cost reduction initiatives, undertaken in 2008, and Increased average online advertising spending. The company also noted an improving trend, with second half revenues 7% higher than in the first half, and monthly revenues were close to their all time peak prior to the collapse in the property market.
Looking forward, Rightmove’s board said it is confident of future success based on increased investment, new advertising products and the prospect of a significant increase in customer numbers.
http://www.proactiveinvestors.co.uk/companies/news/13797/-rightmove-fy-results-show-profit-growth-despite-low-uk-home-sales-13797.html
“Rightmove's performance during 2009 reflects the widespread recognition across the residential property industry of the primary importance of the internet as a marketing channel”, Rightmove Chairman Scott Forbes commented. “Research recently conducted indicates that half of all successful UK home buyers in 2009 first saw the property they bought on the internet and two thirds of this group first saw the property on Rightmove”.
Although revenues actually fell 6% from the previous year to £74m, Rightmove’s underlying Earnings per share (EPS) increased by 28% as the company improved margins, repaid debts and bought-back shares. The company proposed a 7p final dividend, taking the year’s total dividend to 10p, in-line with 2008.
The company’s debt situation has greatly improved, at 31 December 2009, Rightmove had net cash of £3.4m, compared with a net debt of £16.9m in the previous year. The company also retired the outstanding £22.5m debt in early February 2010, with no penalties.
The company emphasised that it had achieved underlying profit growth despite historically low home sales in the housing market, with sharply lower numbers of estate agents and new home developments.
According to Rightmove, this growth was the result of prompt cost reduction initiatives, undertaken in 2008, and Increased average online advertising spending. The company also noted an improving trend, with second half revenues 7% higher than in the first half, and monthly revenues were close to their all time peak prior to the collapse in the property market.
Looking forward, Rightmove’s board said it is confident of future success based on increased investment, new advertising products and the prospect of a significant increase in customer numbers.
http://www.proactiveinvestors.co.uk/companies/news/13797/-rightmove-fy-results-show-profit-growth-despite-low-uk-home-sales-13797.html
NF Energy expects 2009 earnings to soar 250% as revenues climb 28%
NF Energy Saving Corporation (OTCBB: NFEC) anticipates its 2009 full year revenues to rise 28% year-on-year to US$20-21 million, while earnings per share are expected to soar 250% to US$0.35 with more growth eyed in 2010.
The company did not recognize US$3 million in additional revenues as some client projects have been delayed to the first quarter of 2010.
“Although there were significant changes in the economy during the 2008 and 2009 time frame, which had an impact on the types of projects to which we provided products and services, the Company still experienced strong growth year over year,” said Chairman and Chief Executive of NF Energy Gang Li.
The company expects further growth in 2010 due to the ongoing global economic recovery and expansion of the Chinese economy, as well as the Chinese government’s expansion of environment protection policies and continued investment in and encouragement of infrastructure projects.
“Management believes there are many opportunities for expanding of the product and service offerings of the business and 2010 will reflect continued growth for the company,” added Li.
Last month, the company was recognized as one of the top Chinese energy service companies with the “2009 Top 20 ESCO in China” award, presented to the company at the China ESCO Industry Annual Meeting & China Energy Forum held in Beijing.
Last month, NF Energy won bidding on Phase III of a large ultra-supercritical coal power plant in Zhejiang province. It will supply 6 sets of DN2200 fluid-control butterfly valve to the project, and expects to recognize revenue from the deal of US$550,000 in the third quarter of 2010.
http://www.proactiveinvestors.co.uk/companies/news/13795/nf-energy-expects-2009-earnings-to-soar-250-as-revenues-climb-28-13795.html
The company did not recognize US$3 million in additional revenues as some client projects have been delayed to the first quarter of 2010.
“Although there were significant changes in the economy during the 2008 and 2009 time frame, which had an impact on the types of projects to which we provided products and services, the Company still experienced strong growth year over year,” said Chairman and Chief Executive of NF Energy Gang Li.
The company expects further growth in 2010 due to the ongoing global economic recovery and expansion of the Chinese economy, as well as the Chinese government’s expansion of environment protection policies and continued investment in and encouragement of infrastructure projects.
“Management believes there are many opportunities for expanding of the product and service offerings of the business and 2010 will reflect continued growth for the company,” added Li.
Last month, the company was recognized as one of the top Chinese energy service companies with the “2009 Top 20 ESCO in China” award, presented to the company at the China ESCO Industry Annual Meeting & China Energy Forum held in Beijing.
Last month, NF Energy won bidding on Phase III of a large ultra-supercritical coal power plant in Zhejiang province. It will supply 6 sets of DN2200 fluid-control butterfly valve to the project, and expects to recognize revenue from the deal of US$550,000 in the third quarter of 2010.
http://www.proactiveinvestors.co.uk/companies/news/13795/nf-energy-expects-2009-earnings-to-soar-250-as-revenues-climb-28-13795.html
Asia Digital Holdings (ADH, 0.5p, £3.5m), the online marketing group, reports a trading update for the year ended 31 December 2009, is ahead of expectations of pre-tax losses of £0.2m and EPS of -0.2p. The business returned to profitability at an EBITDAS level in Q409. This was driven by the Asian operations achieving break even trading, a post recessionary improvement in the Australian business and cost savings. Following the placing of £1.275m of new monies, the balance sheet has strengthened. The Board continue to manage working capital tightly. We would expect the group to be profitable in the current financial year. The share price has drifted since our Hold recommendation. On 2009 prospective revenue multiple of 0.2x, we believe the stock is undervalued and upgrade our recommendation to a SPECULATIVE BUY with a target price of 1.6p.
Baqus Group (BQS, 3.625p, £4.11m), the national construction consultancy and quantity surveying group, reports a trading for the interims to 31 December 2009 and the current financial year will be below market expectations of PBT of £0.3m and EPS of 0.17p. Cutbacks and delays in projects largely due to Government cut-backs and a lack of banks lending in the construction industry has led to a decline in revenues. The latter combined with increase competition has reduced margins. The group have reduced overheads by £0.5m to reflect the deterioration in revenues. At this stage, the group do not intend to pay a dividend – a clear signal of deteriorating profitability. Net cash stood at £0.09m at the end of June 2009. The market remains weak and the level of uncertainty, especially in public spending, provides the group with uncertainty at this stage. We therefore reduce our hold recommendation to a SELL.
Cryo-Save (CRYO, 477.5p, £44.10m) Europe’s leading stem cell bank has acquired the remaining 30% in its Hungarian operation. As this is one of the most successful it is a logical if relatively small positive step. We remain firm fans of the company and re-iterate our BUY recommendation.
Harvey Nash (HVN, 32.5p, £23.87m) Trading statement for the year ending January 2010 confirms trading has been in-line with expectations and that revenues will be some £375m with underlying pre-tax profits not less than £4m with some £5m of net cash in the balance sheet. The group has indicated it will recommend a final dividend of 1.35p (1.2p), making a full year total up 10% to 2.2p (2p) – putting the group on a yield of 4.15% on the final alone. The minimum profits level would suggest EPS of some 3.8p to January 2010 – putting the group on a 8.6x rating about to go historic. The group will thus report a second half profitability of £1.7m or better – against £2.3m in H1. So forecasts for a flat profit, which would leave the group on 8.6x to January 2011 seem reasonable - a continued HOLD though yield is an attraction.
Minorplanet Systems (MPS, 15.5p, £1.02m) Final results to August 2009 reflected difficult trading conditions made worse by the increasingly limited availability of lease financing which triggered a major cost reduction programme. Revenues fell to £9.7m (£15.3m) and the group fell into a net pre-tax loss of £3.8m (profit £1.8m). The group remains in financial trouble with 12 months to pay an outstanding £2.1m tax to HMRC, has assumed the successful sale of its Australian subsidiary and is in breach of terms on a £0.5m loan that can now be called without notice and has been given notice of a legal action against its former Spanish subsidiary. Given these concerns we maintain our SELL recommendation.
Molins (MLIN, 60.5p, £12.20m) Finals to December 2009 saw revenues of £83.8m (£91.5m) with profits of £2.5m (£7.1m) with EPS of 6.3p (35.2p) on continuing operations and a held 2.5p DPS making a held full year payout of 5p. This puts the group on a 4.1% yield on the final alone. The group ended the period with £5m net cash (net debt £0.4m). The operations reported a mixed performance with tobacco machinery boosted by the new Octave cigarette machine, a good outcome for the scientific services while the packaging had a more difficult year. The group has warned it expects a flat year ahead, despite having a higher overall order book with higher sales but continued difficult trading in Scientific Services and Packaging. With a low PER we see the difficult year ahead as already discounted in the share price (assuming flat profits) but the group ill be able to maintain the yield and thus we rate the group as a Yield based BUY.
NXT (NTX, 13.25p, £20.03m) Interims to December 2009 saw revenues of £1m (2008 £2.1m though that included £1.2m off-off license income) and a net pre-tax loss of £0.86m (profit of £0.28m). Net cash fell to £0.21m but the group has raised an additional £1m via a placing at 13p –representing an additional 5% dilution – announced today. The group is concentrating on achieving further licences for its haptic (force feedback for touch screens) technology which can act as a loudspeaker as well as a touch screen (Apple anyone?), after an agreement with Immersion Corporation that gave NXT access to touch screen technology. The move to flat-screen televisions is set to enhance the outlook for the group’s BMR loudspeakers, with its incorporation into some JVC screens. We maintain our SPECULATIVE BUY recommendation in anticipation of positive licensing news.
Rheochem (RHEP, 7.125p, £15.46m) Interims to December 2009 reports revenues of AUS$11.8m (AUS$21.50m) with sharply reduced loss before tax of AUS$1.81m (AUS$10.80m). The group had previously warned that conventional oil & gas exploration customers were reducing drilling activity but in the longer term the move towards coal bed methane and mineral drilling would offset the fall. The group was hit hardest in Australia by the reduction in drilling activity, while New Zealand was flat with contracts on-going till 2011 so far, while it is still tendering in India for work and has received the required licences to operate in Indonesia. The group did not write-down any further its oil and gas exploration assets. With the potential upside of its UK and American exploration assets we maintain our HOLD recommendation.
http://www.proactiveinvestors.co.uk/companies/news/13786/hb-markets-daily-smallcap-newsflash-including-asia-digital-holdings-baqus-group-harvey-nash-nxt-and-others--13786.html
Baqus Group (BQS, 3.625p, £4.11m), the national construction consultancy and quantity surveying group, reports a trading for the interims to 31 December 2009 and the current financial year will be below market expectations of PBT of £0.3m and EPS of 0.17p. Cutbacks and delays in projects largely due to Government cut-backs and a lack of banks lending in the construction industry has led to a decline in revenues. The latter combined with increase competition has reduced margins. The group have reduced overheads by £0.5m to reflect the deterioration in revenues. At this stage, the group do not intend to pay a dividend – a clear signal of deteriorating profitability. Net cash stood at £0.09m at the end of June 2009. The market remains weak and the level of uncertainty, especially in public spending, provides the group with uncertainty at this stage. We therefore reduce our hold recommendation to a SELL.
Cryo-Save (CRYO, 477.5p, £44.10m) Europe’s leading stem cell bank has acquired the remaining 30% in its Hungarian operation. As this is one of the most successful it is a logical if relatively small positive step. We remain firm fans of the company and re-iterate our BUY recommendation.
Harvey Nash (HVN, 32.5p, £23.87m) Trading statement for the year ending January 2010 confirms trading has been in-line with expectations and that revenues will be some £375m with underlying pre-tax profits not less than £4m with some £5m of net cash in the balance sheet. The group has indicated it will recommend a final dividend of 1.35p (1.2p), making a full year total up 10% to 2.2p (2p) – putting the group on a yield of 4.15% on the final alone. The minimum profits level would suggest EPS of some 3.8p to January 2010 – putting the group on a 8.6x rating about to go historic. The group will thus report a second half profitability of £1.7m or better – against £2.3m in H1. So forecasts for a flat profit, which would leave the group on 8.6x to January 2011 seem reasonable - a continued HOLD though yield is an attraction.
Minorplanet Systems (MPS, 15.5p, £1.02m) Final results to August 2009 reflected difficult trading conditions made worse by the increasingly limited availability of lease financing which triggered a major cost reduction programme. Revenues fell to £9.7m (£15.3m) and the group fell into a net pre-tax loss of £3.8m (profit £1.8m). The group remains in financial trouble with 12 months to pay an outstanding £2.1m tax to HMRC, has assumed the successful sale of its Australian subsidiary and is in breach of terms on a £0.5m loan that can now be called without notice and has been given notice of a legal action against its former Spanish subsidiary. Given these concerns we maintain our SELL recommendation.
Molins (MLIN, 60.5p, £12.20m) Finals to December 2009 saw revenues of £83.8m (£91.5m) with profits of £2.5m (£7.1m) with EPS of 6.3p (35.2p) on continuing operations and a held 2.5p DPS making a held full year payout of 5p. This puts the group on a 4.1% yield on the final alone. The group ended the period with £5m net cash (net debt £0.4m). The operations reported a mixed performance with tobacco machinery boosted by the new Octave cigarette machine, a good outcome for the scientific services while the packaging had a more difficult year. The group has warned it expects a flat year ahead, despite having a higher overall order book with higher sales but continued difficult trading in Scientific Services and Packaging. With a low PER we see the difficult year ahead as already discounted in the share price (assuming flat profits) but the group ill be able to maintain the yield and thus we rate the group as a Yield based BUY.
NXT (NTX, 13.25p, £20.03m) Interims to December 2009 saw revenues of £1m (2008 £2.1m though that included £1.2m off-off license income) and a net pre-tax loss of £0.86m (profit of £0.28m). Net cash fell to £0.21m but the group has raised an additional £1m via a placing at 13p –representing an additional 5% dilution – announced today. The group is concentrating on achieving further licences for its haptic (force feedback for touch screens) technology which can act as a loudspeaker as well as a touch screen (Apple anyone?), after an agreement with Immersion Corporation that gave NXT access to touch screen technology. The move to flat-screen televisions is set to enhance the outlook for the group’s BMR loudspeakers, with its incorporation into some JVC screens. We maintain our SPECULATIVE BUY recommendation in anticipation of positive licensing news.
Rheochem (RHEP, 7.125p, £15.46m) Interims to December 2009 reports revenues of AUS$11.8m (AUS$21.50m) with sharply reduced loss before tax of AUS$1.81m (AUS$10.80m). The group had previously warned that conventional oil & gas exploration customers were reducing drilling activity but in the longer term the move towards coal bed methane and mineral drilling would offset the fall. The group was hit hardest in Australia by the reduction in drilling activity, while New Zealand was flat with contracts on-going till 2011 so far, while it is still tendering in India for work and has received the required licences to operate in Indonesia. The group did not write-down any further its oil and gas exploration assets. With the potential upside of its UK and American exploration assets we maintain our HOLD recommendation.
http://www.proactiveinvestors.co.uk/companies/news/13786/hb-markets-daily-smallcap-newsflash-including-asia-digital-holdings-baqus-group-harvey-nash-nxt-and-others--13786.html
FinnCap starts African Diamonds as a 'buy', targets 108p
FinnCap said that African Diamonds’ AK6 project in Botswana will be the most lucrative new open pit hard rock diamond project to enter production in the next 10 years. The stockbroker initiated its coverage with a ‘buy’ recommendation, targeting 108p per share. The analyst believes that the recently upgraded top-end diamond valuation, of US$200/carat, could prove to be conservative.
Earlier this week, African Diamonds received the latest diamond valuation, and at US$162 a carat, the valuation exceeds the company’s previous projections. The valuation is US$23 per carat higher than prices used in the current AK6 development studies. The new valuation also indicates the possibility of a US$200 per carat value at production, African Diamonds said.
According to FinnCap, the US$200 valuation could be a conservative estimate. The analyst stated that up to 20% of the South lobe of the three kimberlites at AK6 could contain ultra-pure Type II diamonds similar to those produced at Gem Diamonds’ (LSE: GEM) 70%-owned Letseng mine in the Kingdom of Lesotho. According to Letšeng, its diamonds sell for the highest per carat price of any kimberlite mine.
“The key difference is that the estimated production grade of AK6, at 25 carats per hundred tonnes, is twentyfold that of Letseng. Less than 2 per cent of annual global rough diamond production is Type II”, Lunn said. “To us, the implications for AK6 are clear: this mine is set to produce substantial positive cash flow over its 12 year open pit life”.
Furthermore, the broker noted that the project’s new partner Lucara Diamond Corp (TSX-V: LUC), who raised C$110 million to finance its buy out of De Beers, suggests that institutional appetite is returning for quality diamond projects. Finncap said that African Diamonds and Lucara enjoy a good working relationship and both parties are committed to build a mine to start production in Q4 2011.
The stockbrokers price target and valuation is based on a 12 year open pit mine, and assumes that African Diamonds will exercise its recently gained option to take its overall interest in AK6 to 40%.
The AK6 diamond discovery in Orapa, Botswana, is being developed through a joint venture between African Diamonds and Lucara, an associate of Lundin Group. African Diamonds currently has a 30% interest in the project and Lucara owns the remaining 70%.
AK6 is situated on ground once held by De Beers prior to 2002, and it was through a De Beers / African Diamonds joint-venture that the pipe was discovered in 2004. Lucara acquired De Beers' stake in the project for US$49 million in November 2009.
Previously, African Diamonds noted that the new Lucara venture is more favourable than the previous De Beers partnership. Under the Lucara partnership, the company has the option to increase its stake in AK6. African Diamonds intends to exercise its option for £5 million and increase its interest to 40%. Another attractive benefit of the new venture is that now African Diamonds has the right to market its own percentage of the AK6 diamonds. In January, Teeling said the company’s position had greatly improved in recent months and Lucara has removed the project’s previous uncertainty.
http://www.proactiveinvestors.co.uk/companies/news/13773/finncap-starts-african-diamonds-as-a-buy-targets-108p--13773.html
Earlier this week, African Diamonds received the latest diamond valuation, and at US$162 a carat, the valuation exceeds the company’s previous projections. The valuation is US$23 per carat higher than prices used in the current AK6 development studies. The new valuation also indicates the possibility of a US$200 per carat value at production, African Diamonds said.
According to FinnCap, the US$200 valuation could be a conservative estimate. The analyst stated that up to 20% of the South lobe of the three kimberlites at AK6 could contain ultra-pure Type II diamonds similar to those produced at Gem Diamonds’ (LSE: GEM) 70%-owned Letseng mine in the Kingdom of Lesotho. According to Letšeng, its diamonds sell for the highest per carat price of any kimberlite mine.
“The key difference is that the estimated production grade of AK6, at 25 carats per hundred tonnes, is twentyfold that of Letseng. Less than 2 per cent of annual global rough diamond production is Type II”, Lunn said. “To us, the implications for AK6 are clear: this mine is set to produce substantial positive cash flow over its 12 year open pit life”.
Furthermore, the broker noted that the project’s new partner Lucara Diamond Corp (TSX-V: LUC), who raised C$110 million to finance its buy out of De Beers, suggests that institutional appetite is returning for quality diamond projects. Finncap said that African Diamonds and Lucara enjoy a good working relationship and both parties are committed to build a mine to start production in Q4 2011.
The stockbrokers price target and valuation is based on a 12 year open pit mine, and assumes that African Diamonds will exercise its recently gained option to take its overall interest in AK6 to 40%.
The AK6 diamond discovery in Orapa, Botswana, is being developed through a joint venture between African Diamonds and Lucara, an associate of Lundin Group. African Diamonds currently has a 30% interest in the project and Lucara owns the remaining 70%.
AK6 is situated on ground once held by De Beers prior to 2002, and it was through a De Beers / African Diamonds joint-venture that the pipe was discovered in 2004. Lucara acquired De Beers' stake in the project for US$49 million in November 2009.
Previously, African Diamonds noted that the new Lucara venture is more favourable than the previous De Beers partnership. Under the Lucara partnership, the company has the option to increase its stake in AK6. African Diamonds intends to exercise its option for £5 million and increase its interest to 40%. Another attractive benefit of the new venture is that now African Diamonds has the right to market its own percentage of the AK6 diamonds. In January, Teeling said the company’s position had greatly improved in recent months and Lucara has removed the project’s previous uncertainty.
http://www.proactiveinvestors.co.uk/companies/news/13773/finncap-starts-african-diamonds-as-a-buy-targets-108p--13773.html
Caledon Resources sets 700 kt coal sales target for 2010 as prices and demand recover
Caledon Resources (AIM: CDN) said coal demand has picked up in the final quarter of 2009 and recovery in prices continued in Q1 2010 after the demand fell earlier in the year amid the economic downturn, impacting coal prices and driving down the company’s revenues.
Sales for the full year increased from 463 kt (kilotonnes) to 479 kt, however, revenues fell from A$121.9 to A$67.8 million as coal prices plummeted from A$264/t (tonne) to A$141/t. Meanwhile, unit cost of sales declined 23% from A$171/t in the first half to A$131/t in the second half, costs and cash flows at the Cook mine were contained and operational capability of the mine preserved. Still, the company posted a pre-tax loss of A$23.8 million after achieving a profit of A$10.4 million in 2008.
Caledon also said that Argo South mining development at the Cook mine is well advanced to facilitate expansion of mining activities with the ABM25 continuous miner and Prairie mobile haulage system refurbished and relocated to the site.
Other operational developments included the termination of the strategic review process and completion of an advanced concept study at the Minyango project, where a base-line ecological study is currently in progress.
"The first half of 2009 was a difficult period for the coal industry. As the global financial crisis took hold, demand for coal fell and many buyers reneged on off-take agreements - both in terms of price and tonnage. Our response was to reduce manning and costs to the minimum possible while keeping a productive mining team intact and preparing the Cook mine for future expansion... Cook enters 2010 with the Argo South area established and most of the mains development required for the coming year already completed,” said Managing Director of Caledon Resources Mark Trevan.
After growing sales volumes in 2009, the company is now recruiting additional mine employees, aiming to sell a minimum of 700 kt in 2010 based on increased demand and market reports of a likely increase in prices in April 2010 contract year.
The company secured additional working capital by raking in £4.2 million in a fundraising post year end in February 2010 after its cash balance fell to A$13.6 million from A$44.2 million in 2008.
http://www.proactiveinvestors.co.uk/companies/news/13772/caledon-resources-sets-700-kt-coal-sales-target-for-2010-as-prices-and-demand-recover-13772.html
Sales for the full year increased from 463 kt (kilotonnes) to 479 kt, however, revenues fell from A$121.9 to A$67.8 million as coal prices plummeted from A$264/t (tonne) to A$141/t. Meanwhile, unit cost of sales declined 23% from A$171/t in the first half to A$131/t in the second half, costs and cash flows at the Cook mine were contained and operational capability of the mine preserved. Still, the company posted a pre-tax loss of A$23.8 million after achieving a profit of A$10.4 million in 2008.
Caledon also said that Argo South mining development at the Cook mine is well advanced to facilitate expansion of mining activities with the ABM25 continuous miner and Prairie mobile haulage system refurbished and relocated to the site.
Other operational developments included the termination of the strategic review process and completion of an advanced concept study at the Minyango project, where a base-line ecological study is currently in progress.
"The first half of 2009 was a difficult period for the coal industry. As the global financial crisis took hold, demand for coal fell and many buyers reneged on off-take agreements - both in terms of price and tonnage. Our response was to reduce manning and costs to the minimum possible while keeping a productive mining team intact and preparing the Cook mine for future expansion... Cook enters 2010 with the Argo South area established and most of the mains development required for the coming year already completed,” said Managing Director of Caledon Resources Mark Trevan.
After growing sales volumes in 2009, the company is now recruiting additional mine employees, aiming to sell a minimum of 700 kt in 2010 based on increased demand and market reports of a likely increase in prices in April 2010 contract year.
The company secured additional working capital by raking in £4.2 million in a fundraising post year end in February 2010 after its cash balance fell to A$13.6 million from A$44.2 million in 2008.
http://www.proactiveinvestors.co.uk/companies/news/13772/caledon-resources-sets-700-kt-coal-sales-target-for-2010-as-prices-and-demand-recover-13772.html
Pan Andean Resources details demerger plan ahead of shareholder vote
Pan Andean Resources (AIM: PRE) provided investors with an update regarding the demerger of its North American and Bolivian operations, and the Petrominerales (TSX: PMG) acquisition of its Colombian and Peruvian assets. Pan Andean sent the relevant proposal documents to investors today, ahead of a shareholder vote at a general meeting which is scheduled for the 22 March 2010.
Petrominerales initially made the £0.15 per share cash-offer for the company’s Colombian and Peruvian assets on 9 December 2009. "I strongly recommend the Petrominerales offer to Pan Andean shareholders. The £0.15 cash portion of the offer is a fair price for our Colombian and Peruvian assets”, Pan Andean chairman John Teeling commented today.
Pan Andean will establish a new company named Hydrocarbon Exploration, which will own the North American and Bolivian assets and liabilities. Existing shareholders will receive one share in Hydrocarbon for every Pan Andean share held. The Hydrocarbon shares are deemed to have a value of £0.025p each, based on the Pan Andean directors’ valuation of the North American and Bolivian operations.
“Hydrocarbon Exploration gives shareholders a stake in the existing Pan Andean interests in Bolivia and the United States. These interests have been valued at £0.025 per Pan Andean share, which reflects the political and legal uncertainties surrounding the activities”, Teeling said. “The Hydrocarbon Exploration board of directors will focus on creating value from these assets”.
The total implied £0.175 per share valuation represents a premium of approximately 40% from Pan Andean’s closing share price on 8 December.
The company’s directors have unanimously recommended the proposal. As such they have irrevocably supported the deal in respect of their own beneficial holdings of 14.5m Pan Andean shares, representing approximately 11.4% of the vote.
In December, the company said Hydrocarbon Exploration will initially be an unlisted company, but that it anticipated re-listing the business in due course.
Pan Andean’s full year revenues reported at the end of September amounted to £1.85 million, up from last year’s £1.67 million, while pre-tax profits slid to £0.98 million from £1.2 million, but earnings per share increased to 0.58 pence from 0.39 pence. Most of the company’s profits were generated in the United States, where the company is entitled to royalties of 1.32% and 2.15% from the Gryphon and Phoenix rigs respectively, both of which operate on the High Island 52 block, producing 20 million cubic feet of gas per day (mmcfd) and 6 million mmcfd respectively.
Pan Andean has two joints ventures to develop blocks 114 and 131 in the Ucayali basin and block 141 in the Altiplano around Lake Titicaca and was awarded block 161 in Peru. The Antorcha block in Colombia has estimated oil reserves of 600 million to 1.6 billion barrels with a 10% to 15% recovery.
http://www.proactiveinvestors.co.uk/companies/news/13771/pan-andean-resources-details-demerger-plan-ahead-of-shareholder-vote-13771.html
Petrominerales initially made the £0.15 per share cash-offer for the company’s Colombian and Peruvian assets on 9 December 2009. "I strongly recommend the Petrominerales offer to Pan Andean shareholders. The £0.15 cash portion of the offer is a fair price for our Colombian and Peruvian assets”, Pan Andean chairman John Teeling commented today.
Pan Andean will establish a new company named Hydrocarbon Exploration, which will own the North American and Bolivian assets and liabilities. Existing shareholders will receive one share in Hydrocarbon for every Pan Andean share held. The Hydrocarbon shares are deemed to have a value of £0.025p each, based on the Pan Andean directors’ valuation of the North American and Bolivian operations.
“Hydrocarbon Exploration gives shareholders a stake in the existing Pan Andean interests in Bolivia and the United States. These interests have been valued at £0.025 per Pan Andean share, which reflects the political and legal uncertainties surrounding the activities”, Teeling said. “The Hydrocarbon Exploration board of directors will focus on creating value from these assets”.
The total implied £0.175 per share valuation represents a premium of approximately 40% from Pan Andean’s closing share price on 8 December.
The company’s directors have unanimously recommended the proposal. As such they have irrevocably supported the deal in respect of their own beneficial holdings of 14.5m Pan Andean shares, representing approximately 11.4% of the vote.
In December, the company said Hydrocarbon Exploration will initially be an unlisted company, but that it anticipated re-listing the business in due course.
Pan Andean’s full year revenues reported at the end of September amounted to £1.85 million, up from last year’s £1.67 million, while pre-tax profits slid to £0.98 million from £1.2 million, but earnings per share increased to 0.58 pence from 0.39 pence. Most of the company’s profits were generated in the United States, where the company is entitled to royalties of 1.32% and 2.15% from the Gryphon and Phoenix rigs respectively, both of which operate on the High Island 52 block, producing 20 million cubic feet of gas per day (mmcfd) and 6 million mmcfd respectively.
Pan Andean has two joints ventures to develop blocks 114 and 131 in the Ucayali basin and block 141 in the Altiplano around Lake Titicaca and was awarded block 161 in Peru. The Antorcha block in Colombia has estimated oil reserves of 600 million to 1.6 billion barrels with a 10% to 15% recovery.
http://www.proactiveinvestors.co.uk/companies/news/13771/pan-andean-resources-details-demerger-plan-ahead-of-shareholder-vote-13771.html
Berkeley doubles resource to 52 Mlbs U3O8 for Salamanca uranium project
Perth-based exploration and development group Berkeley Resources (AIM, ASX: BKY) are pleased to advise completion of the first stage Mineral Resource Estimates, which has resulted in the doubling of its resource to 52 Mlbs U308 for the Salamanca Uranium Project in Spain.
Initial estimates for the Águila Area and significant additions in the Retortillo Area have doubled Berkeley’s total Mineral Resource base to over 52 Mlbs
U3O8.
Mineral Resources for the Águila Area, which includes the Sageras, Palacios (previously Mina D) and Majuelos deposits, all within 3 kms of the Quercus processing plant, total 22.5 million tonnes at an average grade of 417 ppm for 20.7 Mlbs U3O8.
These Mineral Resources include 24% Measured Resources and 26% Indicated Resources.
Mineral Resources in the Retortillo Area increased by 33% to a total of 19.9 million tonnes at an average grade of 512 ppm for 22.5 Mlbs U3O8.
Total Mineral Resources are now 53.7 million tonnes at 442 ppm for 52.4 Mlbs U3O8, with 31% in the Measured and Indicated categories.
Confirmatory drilling at the substantial Alameda deposits (exploration target of 25.5-29 million tonnes @ 450-500 ppm U3O8) is well advanced. It is anticipated that additional Mineral Resources will be reported in accordance with the JORC Code by the end of the current quarter.
Uranium was first discovered in Salamanca during the 1950’s.
Production commenced in 1974 at the Fe mine, which grew to become the largest uranium mine in the Iberian Peninsula. The mine closed in 2000 due to low uranium prices and the mining areas have since been restored.
Berkeley’s Feasibility Study process for the Salamanca Uranium Project commenced in May 2009, following Cabinet approval of the Co-Operation Agreement between Berkeley and ENUSA.
The Study objective is to assess the viability of restarting mining within the Salamanca State Reserves, based on a number of known uranium deposits.
Following successful completion of the Scoping Study, announced in December 2009, the Company has been focused on the estimation of Mineral Resources based on historical exploration targets, as well as acquiring representative samples for a comprehensive program of metallurgical testing. This process has now been completed for the Águila Area, proximal to the Quercus processing plant.
Drilling at the Alameda area will be completed shortly with estimation of Mineral Resources expected by the end of March.
Final Mineral Resource Estimates for the Definitive Feasibility Study, which are intended to upgrade resource categories, will be available later in 2010 after infill RC drilling and probing of additional ENUSA holes.
http://www.proactiveinvestors.co.uk/companies/news/13770/berkeley-doubles-resource-to-52-mlbs-u3o8-for-salamanca-uranium-project-13770.html
Initial estimates for the Águila Area and significant additions in the Retortillo Area have doubled Berkeley’s total Mineral Resource base to over 52 Mlbs
U3O8.
Mineral Resources for the Águila Area, which includes the Sageras, Palacios (previously Mina D) and Majuelos deposits, all within 3 kms of the Quercus processing plant, total 22.5 million tonnes at an average grade of 417 ppm for 20.7 Mlbs U3O8.
These Mineral Resources include 24% Measured Resources and 26% Indicated Resources.
Mineral Resources in the Retortillo Area increased by 33% to a total of 19.9 million tonnes at an average grade of 512 ppm for 22.5 Mlbs U3O8.
Total Mineral Resources are now 53.7 million tonnes at 442 ppm for 52.4 Mlbs U3O8, with 31% in the Measured and Indicated categories.
Confirmatory drilling at the substantial Alameda deposits (exploration target of 25.5-29 million tonnes @ 450-500 ppm U3O8) is well advanced. It is anticipated that additional Mineral Resources will be reported in accordance with the JORC Code by the end of the current quarter.
Uranium was first discovered in Salamanca during the 1950’s.
Production commenced in 1974 at the Fe mine, which grew to become the largest uranium mine in the Iberian Peninsula. The mine closed in 2000 due to low uranium prices and the mining areas have since been restored.
Berkeley’s Feasibility Study process for the Salamanca Uranium Project commenced in May 2009, following Cabinet approval of the Co-Operation Agreement between Berkeley and ENUSA.
The Study objective is to assess the viability of restarting mining within the Salamanca State Reserves, based on a number of known uranium deposits.
Following successful completion of the Scoping Study, announced in December 2009, the Company has been focused on the estimation of Mineral Resources based on historical exploration targets, as well as acquiring representative samples for a comprehensive program of metallurgical testing. This process has now been completed for the Águila Area, proximal to the Quercus processing plant.
Drilling at the Alameda area will be completed shortly with estimation of Mineral Resources expected by the end of March.
Final Mineral Resource Estimates for the Definitive Feasibility Study, which are intended to upgrade resource categories, will be available later in 2010 after infill RC drilling and probing of additional ENUSA holes.
http://www.proactiveinvestors.co.uk/companies/news/13770/berkeley-doubles-resource-to-52-mlbs-u3o8-for-salamanca-uranium-project-13770.html
Minera IRL to acquire Quilavira Gold project in Peru
Minera IRL Limited (AIM: MIRL) has signed an option to purchase the Quilavira gold exploration project in the Tacna district of southern Peru from Ingerieria y Tecnologia Minero-Metalurgica SA (ITMM). The tenements were previously explored by Newcrest Mining (ASX: NCM). The proposed US$50,000 deal is subject to approvals in Peru.
"Quilavira represents a strategic, longer term exploration opportunity in a highly prospective area. We are already well established in southern Peru, where our Ollachea Project is located, and Quilavira is consistent with building our business interests in selected districts”, Minera IRL Executive Chairman, Courtney Chamberlain said.
ITMM previously acquired the Quilavira property from Newcrest in a competitive tendering process. On the 5,100 hectare tenement package, the main exploration target is an alteration area approximately 1,200x300m. Newcrest’s previous exploration work identified a 200x200m zone of anomalous gold mineralization, sampling on the western part of the zone returned more than 1 gram per tonne gold.
Under the terms of the deal, Minera IRL has the option purchase 100% with a US$50,000 payment, the acquisition is also subject to the grant of the required supreme decree by the Peruvian government. Additionally, a surface rights agreement will be negotiated with the local community before exploration activities can commence.
In January, the company reported that its Corihuarmi gold mine in Peru achieved its best production in 2009 in the final quarter, the Peruvian operation also achieved significant cost cuts and benefitted from all time record gold prices.
The company said total gold production for the year reached 33,012 ounces at a cash cost of US$341 per ounce, while Q4 production amounted to 10,259oz exceeding targets by 18%. Quarterly cash operating costs were 23% below budget at US$248/oz compared to the average sales price of US$1,107/oz during the quarter.
At Corihuarmi, mining blocks in the Susan Pit that were originally defined as waste were found to be mineralized, and no waste was mined, which led to lower operating costs. The company intends to use the resulting cash flow to advance the development of its other projects.
http://www.proactiveinvestors.co.uk/companies/news/13769/minera-irl-to-acquire-quilavira-gold-project-in-peru-13769.html
"Quilavira represents a strategic, longer term exploration opportunity in a highly prospective area. We are already well established in southern Peru, where our Ollachea Project is located, and Quilavira is consistent with building our business interests in selected districts”, Minera IRL Executive Chairman, Courtney Chamberlain said.
ITMM previously acquired the Quilavira property from Newcrest in a competitive tendering process. On the 5,100 hectare tenement package, the main exploration target is an alteration area approximately 1,200x300m. Newcrest’s previous exploration work identified a 200x200m zone of anomalous gold mineralization, sampling on the western part of the zone returned more than 1 gram per tonne gold.
Under the terms of the deal, Minera IRL has the option purchase 100% with a US$50,000 payment, the acquisition is also subject to the grant of the required supreme decree by the Peruvian government. Additionally, a surface rights agreement will be negotiated with the local community before exploration activities can commence.
In January, the company reported that its Corihuarmi gold mine in Peru achieved its best production in 2009 in the final quarter, the Peruvian operation also achieved significant cost cuts and benefitted from all time record gold prices.
The company said total gold production for the year reached 33,012 ounces at a cash cost of US$341 per ounce, while Q4 production amounted to 10,259oz exceeding targets by 18%. Quarterly cash operating costs were 23% below budget at US$248/oz compared to the average sales price of US$1,107/oz during the quarter.
At Corihuarmi, mining blocks in the Susan Pit that were originally defined as waste were found to be mineralized, and no waste was mined, which led to lower operating costs. The company intends to use the resulting cash flow to advance the development of its other projects.
http://www.proactiveinvestors.co.uk/companies/news/13769/minera-irl-to-acquire-quilavira-gold-project-in-peru-13769.html
Liberia-focused Equatorial Palm Oil lists on AIM
Equatorial Palm Oil (AIM: PAL) (EPO) joined London’s AIM market this morning following a £6.5m IPO. The newly listed, £14.3m market-cap company is developing sustainable palm oil plantations and a crude palm oil (CPO) processing operation in Liberia. According to EPO, palm oil is the most important and widely produced edible oil in the world, and demand is projected to grow at 5-6% per annum over the next five years.
“EPO offers a fantastic opportunity to enter into the fast growing and highly lucrative palm oil market. Our aim is to be a sustainable, low-cost producer of crude palm oil in Africa through the reactivation and development of existing plantations and our agricultural land bank in Liberia”, EPO chairman Michael Frayne said. “We have a fantastic land holding and a management with large scale oil palm plantation development experience, having worked with the likes of New Britain Palm Oil and Harrisons & Crosfields”.
The company issued 37.1m ordinary shares at 17.5 pence each through a placing. The money will be used to develop sustainable palm oil plantations and a CPO processing operation in Liberia, where the company controls approximately 169,000 hectares of land.
The operational strategy is focused on three core business activities, the rehabilitation of existing oil palm plantations, the development of new plantations and the development of out-grower small holdings.
Liberia is a politically stable country and is becoming a fast growing investment destination for multi-national corporations, EPO said. Moreover, the company noted that the oil palm is indigenous to West Africa and that it believes the application of South-East Asian techniques and the latest seed genetics may enable Africa to become a key player in the world palm oil market again.
EPO also noted that major international palm oil producer Sime Darby is currently developing 220,000 hectares of palm oil and rubber plantations in Liberia.
“Our three project areas will be advanced in tandem with active out-grower programmes, which will importantly provide major employment to the country. The projects lie between the Ports of Buchanan and Greenville, which means our palm oil processing mill, due to be running later this year, will benefit from easy access to the West African market” Frayne added.
EPO has secured government ratified investment agreements for the rehabilitation of the palm oil plantations. Operations are already underway at the Butaw plantation and Palm Bay plantation.
According to Frayne, the immediate reactivation of 3,000 hectares plantation will provide early cash flow and demonstrate the business’ scalability. Furthermore the company believes that the rehabilitation should immediately enhance land valuations. Developed oil palm plantations are valued in the range of US$15,000-22,000 per hectare.
EPO’s management team is chaired by Michael Frayne, who is a co-founder of the company. The team has extensive international experience in managing oil palm plantations, including EPO’s managing director Peter Bayliss, who previously managed New Britain Palm Oil’s 10-year programme in Indonesia, which spanned 187,000 hectares of palm oil and 26,000 hectares of rubber.
Mirabaud Securities LLP and Shore Capital Stockbrokers Limited are Joint Brokers to the company and Shore Capital and Corporate Limited is its Nominated Adviser.
EPO is the result of a reverse takeover by Liberian Forest Products of Equatorial Biofuels PLC (AIM: EBF), first announced in August 2006.
http://www.proactiveinvestors.co.uk/companies/news/13756/liberia-focused-equatorial-palm-oil-lists-on-aim-13756.html
“EPO offers a fantastic opportunity to enter into the fast growing and highly lucrative palm oil market. Our aim is to be a sustainable, low-cost producer of crude palm oil in Africa through the reactivation and development of existing plantations and our agricultural land bank in Liberia”, EPO chairman Michael Frayne said. “We have a fantastic land holding and a management with large scale oil palm plantation development experience, having worked with the likes of New Britain Palm Oil and Harrisons & Crosfields”.
The company issued 37.1m ordinary shares at 17.5 pence each through a placing. The money will be used to develop sustainable palm oil plantations and a CPO processing operation in Liberia, where the company controls approximately 169,000 hectares of land.
The operational strategy is focused on three core business activities, the rehabilitation of existing oil palm plantations, the development of new plantations and the development of out-grower small holdings.
Liberia is a politically stable country and is becoming a fast growing investment destination for multi-national corporations, EPO said. Moreover, the company noted that the oil palm is indigenous to West Africa and that it believes the application of South-East Asian techniques and the latest seed genetics may enable Africa to become a key player in the world palm oil market again.
EPO also noted that major international palm oil producer Sime Darby is currently developing 220,000 hectares of palm oil and rubber plantations in Liberia.
“Our three project areas will be advanced in tandem with active out-grower programmes, which will importantly provide major employment to the country. The projects lie between the Ports of Buchanan and Greenville, which means our palm oil processing mill, due to be running later this year, will benefit from easy access to the West African market” Frayne added.
EPO has secured government ratified investment agreements for the rehabilitation of the palm oil plantations. Operations are already underway at the Butaw plantation and Palm Bay plantation.
According to Frayne, the immediate reactivation of 3,000 hectares plantation will provide early cash flow and demonstrate the business’ scalability. Furthermore the company believes that the rehabilitation should immediately enhance land valuations. Developed oil palm plantations are valued in the range of US$15,000-22,000 per hectare.
EPO’s management team is chaired by Michael Frayne, who is a co-founder of the company. The team has extensive international experience in managing oil palm plantations, including EPO’s managing director Peter Bayliss, who previously managed New Britain Palm Oil’s 10-year programme in Indonesia, which spanned 187,000 hectares of palm oil and 26,000 hectares of rubber.
Mirabaud Securities LLP and Shore Capital Stockbrokers Limited are Joint Brokers to the company and Shore Capital and Corporate Limited is its Nominated Adviser.
EPO is the result of a reverse takeover by Liberian Forest Products of Equatorial Biofuels PLC (AIM: EBF), first announced in August 2006.
http://www.proactiveinvestors.co.uk/companies/news/13756/liberia-focused-equatorial-palm-oil-lists-on-aim-13756.html
Morning news wrap: Lloyds, Rolls Royce, Serco Group
In the FTSE 100, turbine manufacturer Rolls Royce (LSE: RR) has agreed to launch a recommended cash offer of £154 million for the 67% of share capital of ODIM ASA not already held by the group.
Business services company Serco Group (LSE: SRP) released its full year results, reporting a 27.1% increase in revenues to £3.97 billion, while pre-tax profits soared 30.1% to £177.1 million and earnings per share improved 30.6% to 26.76 pence.
Part-nationalised bank Lloyds (LSE: LLOY) reported a full year loss of £6.3 billion for 2009 on more writedowns of bad loans.
In AIM, Latin American precious metal miner Minera IRL (AIM: MIRL) has signed an option to purchase the Quilavira Gold Exploration Project from Ingerieria y Tecnologia Minero-Metalurgica SA.
South American Focused explorer Pan Andean Resources (AIM: PRE) has agreed to demerge its North American and Bolivian assets and liabilities and Petrominerales will offer to acquire the entire issued and to be issued share capital of Pan Andean.
Australia focused coking coal producer Caledon Resources (AIM: CDN) released its preliminary results for the full year, reporting revenues of A$67.8 million compared to last year’s A$121.9 million, while making a net loss of A$11.4 million compared to an A$8.2 million profit a year ago. Last year’s earnings per share of 4.3 cents turned into losses of 5.4 cents.
http://www.proactiveinvestors.co.uk/companies/news/13768/morning-news-wrap-lloyds-rolls-royce-serco-group-13768.html
Business services company Serco Group (LSE: SRP) released its full year results, reporting a 27.1% increase in revenues to £3.97 billion, while pre-tax profits soared 30.1% to £177.1 million and earnings per share improved 30.6% to 26.76 pence.
Part-nationalised bank Lloyds (LSE: LLOY) reported a full year loss of £6.3 billion for 2009 on more writedowns of bad loans.
In AIM, Latin American precious metal miner Minera IRL (AIM: MIRL) has signed an option to purchase the Quilavira Gold Exploration Project from Ingerieria y Tecnologia Minero-Metalurgica SA.
South American Focused explorer Pan Andean Resources (AIM: PRE) has agreed to demerge its North American and Bolivian assets and liabilities and Petrominerales will offer to acquire the entire issued and to be issued share capital of Pan Andean.
Australia focused coking coal producer Caledon Resources (AIM: CDN) released its preliminary results for the full year, reporting revenues of A$67.8 million compared to last year’s A$121.9 million, while making a net loss of A$11.4 million compared to an A$8.2 million profit a year ago. Last year’s earnings per share of 4.3 cents turned into losses of 5.4 cents.
http://www.proactiveinvestors.co.uk/companies/news/13768/morning-news-wrap-lloyds-rolls-royce-serco-group-13768.html
Fox-Davies Daily Newsflash Including Pan Andean Resources, Chariot Oil & Gas, Minera IRL, Archipelago Resources and Avocet Mining
Pan Andean Resources (PRE) announced they have agreed terms with Petrominerales regarding the acquisition of the entire issued and to be issued share capital of Pan Andean. Under the proposals, Pan Andean shareholders will receive £0.15 in cash and one share in Hydrocarbon exploration, a newly created unlisted Plc for every one Pan Andean share held. The proposals value Pan Andean's current issued and to be issued share capital at approximately £22,345,703, equivalent to £0.175 per Scheme Share. This implied valuation of £0.175 per Scheme Share represents a premium of approximately 14.8% to the Closing Price of 15.25p per Pan Andean Share at 24 February 2010.
Chariot Oil & Gas (CHAR) gave an update ahead of its full year results for the year ended 28 February 2010. Over the past six months work has continued across all the offshore Namibian blocks of interest, the focus being on the processing and interpretation of the comprehensive seismic data that was acquired last year. Chariot holds a large acreage position, totalling an area of 38,725km², and has undertaken extensive seismic acquisition programmes over all of its licences. Initial results in the form of quick look cubes are now available, with further detailed processing and interpretation work continuing. A number of key indicators have already been identified from the seismic surveys in the Northern Blocks. In particular, the time and depth analysis of the initial 900 km² supports evidence of significant structures, oil prone source rock, bright spots and volcanic highs – all of which indicate a working petroleum system which underscores the prospectivity of this area. Additionally, the processing of the latest 600km² of seismic data is underway. In the Central Blocks, the Company is continuing to work on the potential resource volumes, the results of which will be announced later this quarter. In the Southern Blocks, work also progresses in partnership with Petrobras on block 2714A and the latest seismic programme is being processed. Chariot has recently opened a dataroom in London and has received numerous expressions of interest from significant third parties, to visit and review the latest information. Chariot looks forward to welcoming these initial companies and others into the dataroom over the next several months.
Minera IRL (MIRL) announced that it has signed an option to purchase the Quilavira Gold Exploration Project from Ingerieria y Tecnologia Minero-Metalurgica SA (ITMM) for the sum of $50,000. The 5,100 hectare tenement package is located in the Tacna district of southern Peru. ITMM acquired the property from Newcrest in a competitive tendering process.
Archipelago Resources (AR) announced that following receipt of authority from shareholders on 25 January 2010, it has arranged a placing of 102,000,000 new ordinary shares to institutional investors at a price of 30p per Placing Shares to raise £30.6 million. The proceeds of the Placing are estimated to provide up to approximately 80% of the funds required to complete construction of the company’s Toka Tindung Gold Project.
Avocet Mining (AVM) announced the first shipment of gold from its Inata mine in Burkina Faso. Inata poured first gold on 20 December 2009 and this week exported approximately 11,000oz of gold to Rand Refinery's facility in South Africa. Proceeds from the sale of gold of approximately US$12 million are expected to be received next week.
http://www.proactiveinvestors.co.uk/companies/news/13767/fox-davies-daily-newsflash-including-pan-andean-resources-chariot-oil-gas-minera-irl-archipelago-resources-and-avocet-mining-13767.html
Chariot Oil & Gas (CHAR) gave an update ahead of its full year results for the year ended 28 February 2010. Over the past six months work has continued across all the offshore Namibian blocks of interest, the focus being on the processing and interpretation of the comprehensive seismic data that was acquired last year. Chariot holds a large acreage position, totalling an area of 38,725km², and has undertaken extensive seismic acquisition programmes over all of its licences. Initial results in the form of quick look cubes are now available, with further detailed processing and interpretation work continuing. A number of key indicators have already been identified from the seismic surveys in the Northern Blocks. In particular, the time and depth analysis of the initial 900 km² supports evidence of significant structures, oil prone source rock, bright spots and volcanic highs – all of which indicate a working petroleum system which underscores the prospectivity of this area. Additionally, the processing of the latest 600km² of seismic data is underway. In the Central Blocks, the Company is continuing to work on the potential resource volumes, the results of which will be announced later this quarter. In the Southern Blocks, work also progresses in partnership with Petrobras on block 2714A and the latest seismic programme is being processed. Chariot has recently opened a dataroom in London and has received numerous expressions of interest from significant third parties, to visit and review the latest information. Chariot looks forward to welcoming these initial companies and others into the dataroom over the next several months.
Minera IRL (MIRL) announced that it has signed an option to purchase the Quilavira Gold Exploration Project from Ingerieria y Tecnologia Minero-Metalurgica SA (ITMM) for the sum of $50,000. The 5,100 hectare tenement package is located in the Tacna district of southern Peru. ITMM acquired the property from Newcrest in a competitive tendering process.
Archipelago Resources (AR) announced that following receipt of authority from shareholders on 25 January 2010, it has arranged a placing of 102,000,000 new ordinary shares to institutional investors at a price of 30p per Placing Shares to raise £30.6 million. The proceeds of the Placing are estimated to provide up to approximately 80% of the funds required to complete construction of the company’s Toka Tindung Gold Project.
Avocet Mining (AVM) announced the first shipment of gold from its Inata mine in Burkina Faso. Inata poured first gold on 20 December 2009 and this week exported approximately 11,000oz of gold to Rand Refinery's facility in South Africa. Proceeds from the sale of gold of approximately US$12 million are expected to be received next week.
http://www.proactiveinvestors.co.uk/companies/news/13767/fox-davies-daily-newsflash-including-pan-andean-resources-chariot-oil-gas-minera-irl-archipelago-resources-and-avocet-mining-13767.html
Rolls-Royce in £154 mln recommended bid for marine technology affiliate ODIM of Norway
Turbines and aircraft engines maker Rolls-Royce PLC (LSE: RR) announced a recommended 67 pence per share cash offer for the remaining holding in ODIM ASA (OSX: ODIM), valuing the Norwegian marine technology company at approximately £154 million.
Rolls-Royce acquired a 33 percent stake in the company in July 2009 at the same price per share.
Listed on the Oslo Stock Exchange, ODIM develops and sells advanced automated handling systems for seismic and offshore vessels. Rolls-Royce has complementary capabilities in integrated ship systems for the offshore industry, including ship design and the design and integration of power and propulsion systems, Rolls-Royce said.
ODIM board of directors has unanimously recommended that its shareholders accept the offer. In addition, the board of directors and members of management holding shares have undertaken to accept the offer.
John Paterson, president of Rolls-Royce Marine said: "ODIM ASA is rich in technology with a unique subsea and deepwater capability that complements our own activities. Integrating ODIM ASA's innovative technology and highly skilled people into our business will enable us to optimise our offering and provide our global customer base with a wider range of products and services in this important market segment."
http://www.proactiveinvestors.co.uk/companies/news/13765/rolls-royce-in-154-mln-recommended-bid-for-marine-technology-affiliate-odim-of-norway-13765.html
Rolls-Royce acquired a 33 percent stake in the company in July 2009 at the same price per share.
Listed on the Oslo Stock Exchange, ODIM develops and sells advanced automated handling systems for seismic and offshore vessels. Rolls-Royce has complementary capabilities in integrated ship systems for the offshore industry, including ship design and the design and integration of power and propulsion systems, Rolls-Royce said.
ODIM board of directors has unanimously recommended that its shareholders accept the offer. In addition, the board of directors and members of management holding shares have undertaken to accept the offer.
John Paterson, president of Rolls-Royce Marine said: "ODIM ASA is rich in technology with a unique subsea and deepwater capability that complements our own activities. Integrating ODIM ASA's innovative technology and highly skilled people into our business will enable us to optimise our offering and provide our global customer base with a wider range of products and services in this important market segment."
http://www.proactiveinvestors.co.uk/companies/news/13765/rolls-royce-in-154-mln-recommended-bid-for-marine-technology-affiliate-odim-of-norway-13765.html
FTSE 100 seen sharply higher ahead of UK GDP data, commodities recover
The FTSE 100 is seen sharply higher today after a recovery on Wall Street and gains in Asia. US stocks trimmed losses after heavy falls early in the day on worse than expected jobless claims data, which showed an increase in applications for benefits by 22,000 to 496,000. The blue chip index is projected to gain 1% after declining 1.2% on Thursday.
The Dow Jones Industrial Average ended the day 0.5% below the opening level after shedding as much as 1.7% in early trade, while the broader S&P 500 index lost just 0.2% and the technology heavy NASDAQ composite was flat.
Asian stocks were recovering from yesterday's falls. Hong Kong’s Hang Seng was up 1%, Japan’s benchmark Nikkei 225 added 0.25%, South Korea’s KOSPI climbed 0.45% and Australia’s S&P/ASX 200 advanced 1%. China’s Shanghai Composite Index corrected after Thursday’s surge, shedding 0.2%.
Royal Bank of Scotland (LSE: RBS) was the top performer in the index, rallying 6% after releasing its full year results. Fellow bailed out bank Lloyds (LSE: LLOY) and tour operator TUI Travel (LSE: TT) followed with gains of over 2.5%. Satellite telecommunications company Inmarsat (LSE: ISAT) was up 2.4% and energy company Centrica (SLE: CNA) and pharmaceutical company Shire (LSE: SHP) added 2%.
Miner Xstrata (LSE: XTA) was the heaviest faller with a decline of nearly 5%. Outsourcing group Capita (LSE: CPI) lost 4.2%, while private equity group 3i (LSE: III) was down 4%. Plumbing and heating equipment manufacturer Wolseley (LSE: WOS) and hedge fund manager Man Group (LSE: EMG) declined 3.7%.
Commodities
Oil prices rose as April Brent Crude improved to US$76.60/barrel and US light, sweet crude advanced to US$78.49/barrel.
Precious metals also were higher as gold and silver improved to US$1,109/oz and US$16.15/oz, while platinum reached US$1,533/oz.
Base metals followed. Copper and nickel improved to US$3.22/lb and US$9.21/lb, while zinc rose to US$0.97/lb.
The economic data due today includes the second reading for Q4 UK GDP, which will be out at 9:30 AM GMT, and Q4 US GDP data, while will be released in mid afternoon.
http://www.proactiveinvestors.co.uk/companies/news/13766/ftse-100-seen-sharply-higher-ahead-of-uk-gdp-data-commodities-recover-13766.html
The Dow Jones Industrial Average ended the day 0.5% below the opening level after shedding as much as 1.7% in early trade, while the broader S&P 500 index lost just 0.2% and the technology heavy NASDAQ composite was flat.
Asian stocks were recovering from yesterday's falls. Hong Kong’s Hang Seng was up 1%, Japan’s benchmark Nikkei 225 added 0.25%, South Korea’s KOSPI climbed 0.45% and Australia’s S&P/ASX 200 advanced 1%. China’s Shanghai Composite Index corrected after Thursday’s surge, shedding 0.2%.
Royal Bank of Scotland (LSE: RBS) was the top performer in the index, rallying 6% after releasing its full year results. Fellow bailed out bank Lloyds (LSE: LLOY) and tour operator TUI Travel (LSE: TT) followed with gains of over 2.5%. Satellite telecommunications company Inmarsat (LSE: ISAT) was up 2.4% and energy company Centrica (SLE: CNA) and pharmaceutical company Shire (LSE: SHP) added 2%.
Miner Xstrata (LSE: XTA) was the heaviest faller with a decline of nearly 5%. Outsourcing group Capita (LSE: CPI) lost 4.2%, while private equity group 3i (LSE: III) was down 4%. Plumbing and heating equipment manufacturer Wolseley (LSE: WOS) and hedge fund manager Man Group (LSE: EMG) declined 3.7%.
Commodities
Oil prices rose as April Brent Crude improved to US$76.60/barrel and US light, sweet crude advanced to US$78.49/barrel.
Precious metals also were higher as gold and silver improved to US$1,109/oz and US$16.15/oz, while platinum reached US$1,533/oz.
Base metals followed. Copper and nickel improved to US$3.22/lb and US$9.21/lb, while zinc rose to US$0.97/lb.
The economic data due today includes the second reading for Q4 UK GDP, which will be out at 9:30 AM GMT, and Q4 US GDP data, while will be released in mid afternoon.
http://www.proactiveinvestors.co.uk/companies/news/13766/ftse-100-seen-sharply-higher-ahead-of-uk-gdp-data-commodities-recover-13766.html
FTSE 100 tumbles on surprising US jobless claims increase, Dow Jones, S&P 500 and NASDAQ plunge 1.5%
Overview: the FTSE 100 tumbled 1.4% after US jobless claims data that came out today turned out to be worse than expected, showing an increase in benefit claims of 22,000 to 496,000, while a decline was projected by most surveys. Oil and metal prices declined, weakening the mining and energy sectors.
Miners were the worst performers of the day with Xstrata (LSE: XTA), Rio Tinto (LSE: RIO), Anglo American (LSE: AAL) and Vedanta Resources (LSE: VED) all lost 4%. Outsourcing firm Capita Group (LSE: CPI) also declined 4%. Other notable fallers included plumbing and heating equipment manufacturer Wolseley (LSE: WOS) and hedge fund manager Man Group (LSE: EMG), which both added 3.5%.
Royal Bank of Scotland (LSE: RBS) led the blue chips with a 3% gain. Tour company TUI Travel (LSE: TT) and satellite communications group Inmarsat (LSE: ISAT) also performed well, advancing 2%. Energy company Centrica (LSE: CNA) was up 1.4%, while telecom group BT (LSE: BT.A) added 1.2% and pharmaceutical company Shire (LSE: SHP) tacked on 1%.
US stocks tumbled in early trade. The Dow Jones Industrial Average the broader S&P 500 index slipped 1.5%, as did the technology heavy NASDAQ composite, reversing yesterday’s gains on the Fed’s reassurance that the interest rates would stay low for en extended period of time.
Commodities
Crude prices fell today as the US dollar strengthened amid losses in global equity markets, which were pushed down by Fed Chairman Ben Bernanke’s gloomy assessment of the US economy in his speech to the Congress yesterday and today’s negative economic data.
The stock market declines increased the appeal of the greenback as a safe investment to drive up its value. A stronger US dollar makes dollar-denominated commodities such as crude more expensive for holders of other currencies, pushing down the demand.
Further direction for crude prices will be set by today’s inventories update from the Energy Information Administration (EIA). Yesterday’s data from API (American petroleum Institute) revealed that stockpiles fell by 3.1 million barrels last week instead of an expected increase. However, gasoline stocks added 1.7 million barrels, while distillate stocks including heating oil were down by 834,000 barrels, which was a lesser decline than projected.
April Brent Crude was down to US$76.75/barrel, while US light, sweet crude slipped to US$78.70/barrel after recapturing the US$80/barrel mark yesterday.
Blue chip oil and gas producers turned negative today. Tullow Oil (LSE: TLW) was at the bottom of the pile with a 2% loss. Cairn Energy (LSE: CNE) was down 1.7%, while BG Group (LSE: BG) declined 1.5%. Shell (LSE: RDSB) was down 1.2%, while fellow supermajor BP (LSE: BP) declined marginally.
Petrofac (LSE: PFC) moved with the sector, shedding 1.9%, while fellow oil and gas engineering firm Amec (LSE: AMEC) posted a small loss.
Midcaps followed the trend. JKX Oil & Gas (LSE: JKX) was the heaviest faller with a loss of nearly 4%. Salamander Energy (LSE: SMDR) was down 3.6%, while Premier Oil (LSE: PMO) slid 2% and Melrose Resources (LSE: MRS) and Soco International (LSE: SIA) dropped 1.5%. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) lost 1% and Heritage Oil (LSE: HOIL) declined marginally.
Services companies also were in selling mode as Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) retreated 2.2% and 1% respectively.
Junior companies didn’t show much movement today. Energy investor Xtract Energy PLC (AIM: XTR) moved along with the sector, shedding 6%.
Gold and silver drop on stronger US dollar
Gold was under pressure from a stronger US dollar today, failing to get back to the US$1,100/oz level after finding support at US$1,090/oz.
The American currency firmed today after falling on Ben Bernanke’s yesterday’s pledge to leave the interest rates at the current ultra-low level. Last week, the Fed raised its discount rates that it charges banks for emergency loans by 25 basis points to 0.75%, stirring up speculation that the economic stimulus package that is currently in place could be withdrawn sooner than expected.
Meanwhile, the euro continued its decline against the greenback to further weaken gold as concerns over the Greek debt crisis continued to weigh on Europe’s single currency.
After rallying on Bernanke’s comments, equity markets turned negative today to curb the appeal of riskier assets such as gold and boosting the demand for safer investments like the US dollar.
Gold was at US$1,093/oz in mid afternoon. Silver followed, dropping to US$15.89/oz, while platinum firmed, reaching US$1,513/oz.
All blue chip miners were in decline today. Randgold Resources (LSE: RRS), silver miner Fresnillo (LSE: FRES) and platinum producer Lonmin (LSE: LMI) all lost nearly 2%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) declined marginally.
Midcaps did better as while silver producer Hochschild Mining (LSE: HOC) slid 1.2%, fellow FTSE 250 constituent Aquarius Platinum (LSE: AQP) gained 2.1% and gold miner Petropavlovsk (LSE: POG) was flat.
Argentina focused gold explorer Patagonia Gold (AIM: PGD) was the bets performer among the juniors with an 8% advance.
Most other small caps declined. Australian gold and copper prospector Solomon Gold (AIM: SOLG) and Stellar Diamonds (AIM: STEL) declined 6.5% and 5% respectively, while commodity asset development company Mercator Gold (AIM: MCR) and Western Australia operating Norseman Gold (AIM: NGL) dropped 4.5% and 4%.
Base metals extend losses
Base metals also declined with copper and nickel sliding to US$3.21/lb and US$9.21/lb, while zinc dropped to US$0.97/lb.
Mining stocks fell on lower metal prices. Rio Tinto (LSE: RIO) and Anglo American (LSE: AAL) led the retreat with losses of nearly 3.5%. Eurasian Natural Resources (LSE: ENRC) was close, sliding 2.8%. Vedanta Resources (LSE: VED) was down 2.7%, Kazakhmys (LSE: KAZ) declined 2.5% and the world’s largest miner BHP Billiton (LSE: BLT) lost 2.3%.
Antofagasta (LSE: ANTO) did relatively well, shedding just 1.6%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, slipping 1.4%.
Specialty minerals exploration and development company Thor Mining (AIM: THR) led the juniors with a 12.5% rally after announcing its intention to acquire the Dundas gold project in Australia.
Copper and nickel explorer Regency Mines (AIM: RGM) followed with a 9% climb, while Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and iron ore focused investor Red Rock Resources (AIM: RRR) advanced 7.2%. Botswana operating nickel and copper miner Discovery Metals (AIM: DME) and South American focused junior miner Herencia Resources (AIM: HER) added 6.5% and 6% respectively.
Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and Forte Energy (AIM: FTE) headed in the opposite direction with losses of 5%.
Banks, insurance, private equity
Financial stocks were mixed. Royal Bank of Scotland (LSE: RBS) and fellow part-nationalised bank Lloyds (LSE: LLOY) led the sector with gains of 3.3% and 1% respectively. Peers Barclays (LSE: BARC) and Standard Chartered (LSE: STAN) slipped 1.5% and 1.1% respectively, while HSBC (LSE: HSBA) declined marginally.
Admiral Group (LSE: ADM) was flat, while other insurance companies slipped into the red. Legal & General (LSE: LGEN) and Prudential (LSE: PRU) were down 2.5%. Standard Life (LSE: SL) lost nearly 2%, while RSA Insurance Group (LSE: RSA) declined 1.4% and Aviva (LSE: AV) was down 1.2%.
Private equity group 3i (LSE: III) was down 3.2%.
Small Cap Movers
Other notable movers among the small caps included IP commercialisation company Amphion Innovations (AIM: AMP), which lost 12%, and novel pesticides and plant nutritional products developer Plant Impact (AIM: PIM) with a 22% loss on equity issue.
Large and Mid Cap News
British Gas parent company Centrica PLC (LSE: CNA) said it has signed an agreement with Suncor Energy (TSX: SU, NYSE: SU), under which Centrica will acquire Suncor’s Trinidad and Tobago portfolio of gas assets for £246 million in cash.
Engineering, construction and services group Balfour Beatty PLC (LSE: BBY) said its 50 percent controlled infrastructure contractor Gammon Construction Ltd has won a HK$2.4 billion, or £195 million, contract for the widening of the Tolo and Fanling Highways in Hong Kong for the Hong Kong Special Administrative Region Highways Department.
Small Cap News
Thor Mining (AIM, ASX: THR) is set to acquire the Dundas gold project, which is located in the broader Norseman area south-east of Kalgoorlie in Western Australia. Dundas consists of 3 tenements covering 340km₂ in the Western Australian Goldfields, approximately 100km southeast of Norseman. The proposed deal marks the first step in Thor’s new exploration strategy, which is targeting economically favourable gold prospects rather than base metal projects.
Dual-listed oil & gas explorer Range Resources (ASX: RRS, AIM: RRL) has encountered significantly better oil and gas production than expected following successful connection of the Smith #1 well to the sales line earlier this week.
Australian-listed coal mining and development company Coal of Africa (ASX: CZA, AIM:CZA) has moved to a 100% interest in the Limpopo Coal Company.
Irish oil and gas exploration and production company Providence Resources PLC (AIM: PVR, IEX: PRR) said it has signed a strategic collaboration agreement with PGS Ventures A/S, a division of Petroleum Geo-Services (PGS), an industry leader in offshore seismic data acquisition and processing.
Marketing software specialists smartFOCUS Group (AIM: STF) has launched a new marketing software procuct for social networks, which will allow placing a value on an individuals' influence across a range of social networking sites including Twitter, Facebook, LinkedIn, Delicious and Digg.
African Aura Mining (AIM: AAAM) has commissioned an airborne geophysical survey across its Nkout, Ngoa and Akon iron ore projects in southern Cameroon to define priority targets for a drill programme scheduled for this year.
Healthcare and technology investor Amphion Innovations (AIM: AMP) announced that its partner company PrivateMarkets has appointed a new director of sales, Jeff Evans. In the role, Evans will support the company as it refines it sales approach in the electric power industry. The PrivateMarkets software platform enables structured bilateral physical-commodity trading.
Sinclair Pharma (AIM: SPH) expects its performance to pick up in the second half of the year following what the company said were the busiest three months in history with new acquisitions made and cost cutting moves undertaken after revenues posted year-on-year declines during the first half of the current year and profits turned into losses.
London Mining (AIM: LOND) is continuing to deliver development milestones across all four of its key iron ore projects. The AIM-listed mine developer has a busy schedule in 2010 with each of the four projects targeting the next significant development milestone, including a number of feasibility studies and new JORC-resource statements.
Broker Fairfax has initiated coverage of Landore Resources (AIM: LND), saying the company’s experienced management team and diversified asset portfolio represented a strong investment case and projecting a continuous news flow this year featuring drill results, resource upgrades and engineering study results on major targets.
Solomon Gold (AIM: SOLG) said that following the completion of the scrip-based acquisitions of Acapulco Mining and Central Minerals and relevant allotments, chief executive Nicholas Mather has a 15.9% stake in the company compared to the 19.1% shareholding he had before the acquisition.
Food processing equipment maker Pursuit Dynamics (AIM: PDX) said it is re-entering the brewing industry with a suite of new products and services following the completion of several brewing projects and an extensive test program with a large international brewer.
Island Oil & Gas (AIM: IOG) and San Leon Energy (AIM: SLE) have agreed the terms of a recommended share-based merger, which values Island at £13.74m.
Plant Impact (AIM: PIM) has announced a share issue to raise £2.1 million to hire new sales and marketing personnel to drive sales across the company’s existing markets and accelerate the roll-out of its new productions into new markets.
http://www.proactiveinvestors.co.uk/companies/news/13759/ftse-100-tumbles-on-surprising-us-jobless-claims-increase-dow-jones-sp-500-and-nasdaq-plunge-15-13759.html
Miners were the worst performers of the day with Xstrata (LSE: XTA), Rio Tinto (LSE: RIO), Anglo American (LSE: AAL) and Vedanta Resources (LSE: VED) all lost 4%. Outsourcing firm Capita Group (LSE: CPI) also declined 4%. Other notable fallers included plumbing and heating equipment manufacturer Wolseley (LSE: WOS) and hedge fund manager Man Group (LSE: EMG), which both added 3.5%.
Royal Bank of Scotland (LSE: RBS) led the blue chips with a 3% gain. Tour company TUI Travel (LSE: TT) and satellite communications group Inmarsat (LSE: ISAT) also performed well, advancing 2%. Energy company Centrica (LSE: CNA) was up 1.4%, while telecom group BT (LSE: BT.A) added 1.2% and pharmaceutical company Shire (LSE: SHP) tacked on 1%.
US stocks tumbled in early trade. The Dow Jones Industrial Average the broader S&P 500 index slipped 1.5%, as did the technology heavy NASDAQ composite, reversing yesterday’s gains on the Fed’s reassurance that the interest rates would stay low for en extended period of time.
Commodities
Crude prices fell today as the US dollar strengthened amid losses in global equity markets, which were pushed down by Fed Chairman Ben Bernanke’s gloomy assessment of the US economy in his speech to the Congress yesterday and today’s negative economic data.
The stock market declines increased the appeal of the greenback as a safe investment to drive up its value. A stronger US dollar makes dollar-denominated commodities such as crude more expensive for holders of other currencies, pushing down the demand.
Further direction for crude prices will be set by today’s inventories update from the Energy Information Administration (EIA). Yesterday’s data from API (American petroleum Institute) revealed that stockpiles fell by 3.1 million barrels last week instead of an expected increase. However, gasoline stocks added 1.7 million barrels, while distillate stocks including heating oil were down by 834,000 barrels, which was a lesser decline than projected.
April Brent Crude was down to US$76.75/barrel, while US light, sweet crude slipped to US$78.70/barrel after recapturing the US$80/barrel mark yesterday.
Blue chip oil and gas producers turned negative today. Tullow Oil (LSE: TLW) was at the bottom of the pile with a 2% loss. Cairn Energy (LSE: CNE) was down 1.7%, while BG Group (LSE: BG) declined 1.5%. Shell (LSE: RDSB) was down 1.2%, while fellow supermajor BP (LSE: BP) declined marginally.
Petrofac (LSE: PFC) moved with the sector, shedding 1.9%, while fellow oil and gas engineering firm Amec (LSE: AMEC) posted a small loss.
Midcaps followed the trend. JKX Oil & Gas (LSE: JKX) was the heaviest faller with a loss of nearly 4%. Salamander Energy (LSE: SMDR) was down 3.6%, while Premier Oil (LSE: PMO) slid 2% and Melrose Resources (LSE: MRS) and Soco International (LSE: SIA) dropped 1.5%. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) lost 1% and Heritage Oil (LSE: HOIL) declined marginally.
Services companies also were in selling mode as Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) retreated 2.2% and 1% respectively.
Junior companies didn’t show much movement today. Energy investor Xtract Energy PLC (AIM: XTR) moved along with the sector, shedding 6%.
Gold and silver drop on stronger US dollar
Gold was under pressure from a stronger US dollar today, failing to get back to the US$1,100/oz level after finding support at US$1,090/oz.
The American currency firmed today after falling on Ben Bernanke’s yesterday’s pledge to leave the interest rates at the current ultra-low level. Last week, the Fed raised its discount rates that it charges banks for emergency loans by 25 basis points to 0.75%, stirring up speculation that the economic stimulus package that is currently in place could be withdrawn sooner than expected.
Meanwhile, the euro continued its decline against the greenback to further weaken gold as concerns over the Greek debt crisis continued to weigh on Europe’s single currency.
After rallying on Bernanke’s comments, equity markets turned negative today to curb the appeal of riskier assets such as gold and boosting the demand for safer investments like the US dollar.
Gold was at US$1,093/oz in mid afternoon. Silver followed, dropping to US$15.89/oz, while platinum firmed, reaching US$1,513/oz.
All blue chip miners were in decline today. Randgold Resources (LSE: RRS), silver miner Fresnillo (LSE: FRES) and platinum producer Lonmin (LSE: LMI) all lost nearly 2%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) declined marginally.
Midcaps did better as while silver producer Hochschild Mining (LSE: HOC) slid 1.2%, fellow FTSE 250 constituent Aquarius Platinum (LSE: AQP) gained 2.1% and gold miner Petropavlovsk (LSE: POG) was flat.
Argentina focused gold explorer Patagonia Gold (AIM: PGD) was the bets performer among the juniors with an 8% advance.
Most other small caps declined. Australian gold and copper prospector Solomon Gold (AIM: SOLG) and Stellar Diamonds (AIM: STEL) declined 6.5% and 5% respectively, while commodity asset development company Mercator Gold (AIM: MCR) and Western Australia operating Norseman Gold (AIM: NGL) dropped 4.5% and 4%.
Base metals extend losses
Base metals also declined with copper and nickel sliding to US$3.21/lb and US$9.21/lb, while zinc dropped to US$0.97/lb.
Mining stocks fell on lower metal prices. Rio Tinto (LSE: RIO) and Anglo American (LSE: AAL) led the retreat with losses of nearly 3.5%. Eurasian Natural Resources (LSE: ENRC) was close, sliding 2.8%. Vedanta Resources (LSE: VED) was down 2.7%, Kazakhmys (LSE: KAZ) declined 2.5% and the world’s largest miner BHP Billiton (LSE: BLT) lost 2.3%.
Antofagasta (LSE: ANTO) did relatively well, shedding just 1.6%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, slipping 1.4%.
Specialty minerals exploration and development company Thor Mining (AIM: THR) led the juniors with a 12.5% rally after announcing its intention to acquire the Dundas gold project in Australia.
Copper and nickel explorer Regency Mines (AIM: RGM) followed with a 9% climb, while Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and iron ore focused investor Red Rock Resources (AIM: RRR) advanced 7.2%. Botswana operating nickel and copper miner Discovery Metals (AIM: DME) and South American focused junior miner Herencia Resources (AIM: HER) added 6.5% and 6% respectively.
Russia focused copper and nickel miner Amur Minerals (AIM: AMC) and Forte Energy (AIM: FTE) headed in the opposite direction with losses of 5%.
Banks, insurance, private equity
Financial stocks were mixed. Royal Bank of Scotland (LSE: RBS) and fellow part-nationalised bank Lloyds (LSE: LLOY) led the sector with gains of 3.3% and 1% respectively. Peers Barclays (LSE: BARC) and Standard Chartered (LSE: STAN) slipped 1.5% and 1.1% respectively, while HSBC (LSE: HSBA) declined marginally.
Admiral Group (LSE: ADM) was flat, while other insurance companies slipped into the red. Legal & General (LSE: LGEN) and Prudential (LSE: PRU) were down 2.5%. Standard Life (LSE: SL) lost nearly 2%, while RSA Insurance Group (LSE: RSA) declined 1.4% and Aviva (LSE: AV) was down 1.2%.
Private equity group 3i (LSE: III) was down 3.2%.
Small Cap Movers
Other notable movers among the small caps included IP commercialisation company Amphion Innovations (AIM: AMP), which lost 12%, and novel pesticides and plant nutritional products developer Plant Impact (AIM: PIM) with a 22% loss on equity issue.
Large and Mid Cap News
British Gas parent company Centrica PLC (LSE: CNA) said it has signed an agreement with Suncor Energy (TSX: SU, NYSE: SU), under which Centrica will acquire Suncor’s Trinidad and Tobago portfolio of gas assets for £246 million in cash.
Engineering, construction and services group Balfour Beatty PLC (LSE: BBY) said its 50 percent controlled infrastructure contractor Gammon Construction Ltd has won a HK$2.4 billion, or £195 million, contract for the widening of the Tolo and Fanling Highways in Hong Kong for the Hong Kong Special Administrative Region Highways Department.
Small Cap News
Thor Mining (AIM, ASX: THR) is set to acquire the Dundas gold project, which is located in the broader Norseman area south-east of Kalgoorlie in Western Australia. Dundas consists of 3 tenements covering 340km₂ in the Western Australian Goldfields, approximately 100km southeast of Norseman. The proposed deal marks the first step in Thor’s new exploration strategy, which is targeting economically favourable gold prospects rather than base metal projects.
Dual-listed oil & gas explorer Range Resources (ASX: RRS, AIM: RRL) has encountered significantly better oil and gas production than expected following successful connection of the Smith #1 well to the sales line earlier this week.
Australian-listed coal mining and development company Coal of Africa (ASX: CZA, AIM:CZA) has moved to a 100% interest in the Limpopo Coal Company.
Irish oil and gas exploration and production company Providence Resources PLC (AIM: PVR, IEX: PRR) said it has signed a strategic collaboration agreement with PGS Ventures A/S, a division of Petroleum Geo-Services (PGS), an industry leader in offshore seismic data acquisition and processing.
Marketing software specialists smartFOCUS Group (AIM: STF) has launched a new marketing software procuct for social networks, which will allow placing a value on an individuals' influence across a range of social networking sites including Twitter, Facebook, LinkedIn, Delicious and Digg.
African Aura Mining (AIM: AAAM) has commissioned an airborne geophysical survey across its Nkout, Ngoa and Akon iron ore projects in southern Cameroon to define priority targets for a drill programme scheduled for this year.
Healthcare and technology investor Amphion Innovations (AIM: AMP) announced that its partner company PrivateMarkets has appointed a new director of sales, Jeff Evans. In the role, Evans will support the company as it refines it sales approach in the electric power industry. The PrivateMarkets software platform enables structured bilateral physical-commodity trading.
Sinclair Pharma (AIM: SPH) expects its performance to pick up in the second half of the year following what the company said were the busiest three months in history with new acquisitions made and cost cutting moves undertaken after revenues posted year-on-year declines during the first half of the current year and profits turned into losses.
London Mining (AIM: LOND) is continuing to deliver development milestones across all four of its key iron ore projects. The AIM-listed mine developer has a busy schedule in 2010 with each of the four projects targeting the next significant development milestone, including a number of feasibility studies and new JORC-resource statements.
Broker Fairfax has initiated coverage of Landore Resources (AIM: LND), saying the company’s experienced management team and diversified asset portfolio represented a strong investment case and projecting a continuous news flow this year featuring drill results, resource upgrades and engineering study results on major targets.
Solomon Gold (AIM: SOLG) said that following the completion of the scrip-based acquisitions of Acapulco Mining and Central Minerals and relevant allotments, chief executive Nicholas Mather has a 15.9% stake in the company compared to the 19.1% shareholding he had before the acquisition.
Food processing equipment maker Pursuit Dynamics (AIM: PDX) said it is re-entering the brewing industry with a suite of new products and services following the completion of several brewing projects and an extensive test program with a large international brewer.
Island Oil & Gas (AIM: IOG) and San Leon Energy (AIM: SLE) have agreed the terms of a recommended share-based merger, which values Island at £13.74m.
Plant Impact (AIM: PIM) has announced a share issue to raise £2.1 million to hire new sales and marketing personnel to drive sales across the company’s existing markets and accelerate the roll-out of its new productions into new markets.
http://www.proactiveinvestors.co.uk/companies/news/13759/ftse-100-tumbles-on-surprising-us-jobless-claims-increase-dow-jones-sp-500-and-nasdaq-plunge-15-13759.html
HB Markets Daily Smallcap Newsflash including Avesco Group, Centaur Media, Communisis, Lidco and others
4imprint Group (FOUR, 155p, £40.0m) Prelims to 2 January 2010 report flat revenues at £169.1m, but adjusted operating profit is down 42% to £5.5m (2008: £9.6m) and adjusted EPS down 30% to 17.1p (2008: £24.5p), exceeding market earnings expectations of 12.6p. In fact, 2009 actual earnings have exceeded 2010 EPS estimate of 16.4p. We expect the market to upgrade estimates for 2010. The group has increased its market share and lower cost. There is some evidence that market conditions are improving. The group is well positioned for a market recovery. The stock trades on a historic PER of 9.5x with a compelling yield of 8.2%. We therefore upgrade our Hold recommendation to a BUY.
Avesco Group (AVS, 43.5p, £10.9m), Taya Investment Company has no current intention to make an offer for Avesco. The share price has risen by 112% since our BUY recommendation, driven by the bid situation. Avesco is an asset play story, with tangible net assets stood at £37.8m, exceeding the current market capitalisation or £10.9m. Given the group is no longer in a bid situation, we believe investors should take profits. We do not foresee the share price to increase substantially in the short-term and expect it to drift southwards instead. We therefore reduce our Buy recommendation to a HOLD or take profits.
Centaur Media (CAU, 50p, £70.44m) Interims to December 2009 saw revenues fall to £23.9m (£31.5m) with an adjusted loss before tax of £1.2m (Profit £0.7m) and a 0.6p (0.5p) DPS. The group ended the period with net debt of £0.7m (net cash of £0.6m at the June 2009 year end) but that was driven primarily by a £0.8m purchase of software. The group comments the rate of decline is lowing, with revenues only down 15% in the final 2 months of the period as opposed to 28% down in the first 4 months. The fall in revenues has been accentuated by a number of events that did not repeat this year, so although events revenues were down 27% the underlying situation was slightly better at 14% down. The group did take action on costs to offset the 24% decline in revenues by cutting admin by some 19%. We admire the group and believe it is reacting correctly to the difficult trading conditions but are still concerned regarding the future ratings. We maintain our SELL.
ClearStream Technologies (CTN, 25.75p, £11.9m) The trading statement reports management are comfortable with current FY2010 estimates of PBT of £0.5m and EPS of 1.0p. Following the manufacturing changes, yields and gross margins have returned to 2009 levels. The group have secured a number of new customers increasing OEM sales. The own-labelling division is focussing on developing sales in BRIC and is seeing some evidence of a recovery in demand from European distributors. Traditionally the business is H2 weighted and this year is no different. We retain our SPECULATIVE BUY recommendation.
Clyde Process Solutions (CPSP, 53p, £21.40m) Trading since the half year has been in-line with market expectations with the end of January order book standing at £19.5m (£24.5m). The group is expanding overseas and is fairly rated in our eyes, a maintained HOLD.
Communisis (CMS, 13.75p, £19.06m) Finals to December 2009 saw sales decline to £190.19m (£257.73m) with underlying pre-tax profits of £5.25m (£12.73m) and EPS of 2.28p (6.24p). As we feared the dividend has been trimmed to a final of 0.43p (1.635p) making a year total of 1.29p (4.13p), giving a year yield total of 9.2%, indeed 3.1% in the final alone. Year end net debt reduced to £16.8m from £16.8m at the interims, despite an adverse working cap movement of £7.9m, raised pension contribution from £1.2m to £2.5m which were offset by a business sale of £3.5m. The group remains confident that the integrated marketing model creates opportunities with 40 of the top 100 customers taking more than 1 service from the group and is throwing up acquisition opportunities. The group is continuing to invest heavily in high tech printing kit that enables personalised marketing. Key concern is the bill and cheque printing business which is inevitably winding down, driven by Government legislation. That said forecasts around £6m PBT with 3p EPS look achievable – so we move the shares from a Sell, last iterated at 16p on 11/11/09, to a HOLD.
Gartmore Fledgling Trust (GMF, 374.5p, £70.39m) Interim report to December 2009 reports a 21.7% NAV rise to 452.1p over the period (outperforming the 15.7% rise in the Fledgling index). It has declared a held 3.5p interim dividend. GFM was ranked 1st in the Association of Investment Companies UK Smaller Companies universe over both the 1 year and 10 year periods to December 2009. GFM notes it sits at a slightly larger discount to NAV (16.6% V.S. the sector average of 16.1%) and that worsened during the period. GFM bought back some 90,000 shares during the period and maintains the ability to buy back more. Like us, GFM believes as yet little of the Quantitive Easing liquidity injected into the markets has reached the smaller cap market place, but it will eventually, probably as corporate activity. BUY
GB Group (GBG, 22.5p, £19.25m) Has announced Racing UK, the subscription TV horse racing channel, has signed to use GBG’s identity management solutions which will be used to consolidate all subscriber information into a single view database. Still a HOLD.
IDOX (IDOX, 10.25p, £35.08m) AGM statement has stated that Q1 revenue and profitability are ahead of the comparable period last year. The group has a large order book that underpins the outlook, though they sensibly note caution regarding the general UK economy and the forthcoming UK election, given its prime focus of software & services to the UK public sector. Forecasts for the year ending October 2010 put the group on a 6.3x PER (based on £7.54m PBT with 1.6p EPS). Although clearly more vulnerable than most to potential UK spending cuts, we believe it’s already discounted the impact and thus maintain our BUY.
Lidco (LID, 19.75p, £34.4m), the cardiovascular monitoring company, reports trading for the year ended 31 January 2010, is ahead of market expectations of pre-tax losses of £1.1m and EPS of -0.6p. Revenues are expected to have increase by c.18% to c. £5.3m, with a 2.7x increase in monitors installed to 2,075. The business is set to become profitable in the current financial year. Lidco is debt free and has net cash of £1.8m at the end of FY2010 (H1 2010: £2.1m). Despite the better than expected performance, we remain concerned about the group’s cash levels. If the business does not become cash generative this year there is a danger of a further cash raise. Trading on a 2010 EV/Sales of 3.4x encourages us to upgrade our sell recommendation to a HOLD.
Pursuit Dynamics (PDX, 165p, £108.57m) So after months of examining the business strategy PDX, under the management of the new CEO Roel Pieper, has decided to re-enter the brewing market. Brewers are inevitably cautious and the sight of a new technology entering, withdrawing and then re-entering the market has certainly done damage to the prospects. We have always been backers of the technology, but feel the share price is still well ahead and we now believe the group will have to do a deal withy a larger operation to secure much take-up of its technology. We still rate the group as a SELL.
Sabien Technology (SNT, 27.5p, £8.7m), the manufacturer of the patented M2G energy saving devices, reports interims to 31 December 2009. Sales up 25% to £0.44m (H109: £0.35m), and pre-tax losses fell by 57% to £0.21m (H109: £0.5m). The order book is strong with £0.8m of sales received for the year to date. Following a placing of £1.475m at 30p per share, the group has ended the period with net cash of £1.1m. The next 6 months will be interesting. The group need to convert the trials into orders and ramp up sales to gain critical mass. We maintain our HOLD recommendation for now, but large contract wins could make this stock more interesting.
Silverdell (SID, 8.875p, £13.5m), the UK supplier of asbestos and environmental consultancy services, reports trading continues to perform in line with 2010 EPS estimates of 1.3p, despite a 6% decline in revenues from 1 October 2009 to 31 January 2010, due to adverse weather conditions. However, enquiry levels remain strong. The business now benefits from a 1% increase in gross margins to 24.6% derived from maximising efficiencies. The group has recently secured new contracts, providing revenue visibility. We continue to be believe the business is undervalued trading on a 2010 PER of 6.7x and 5.2 2011 PER. We retain our SPECULATIVE BUY recommendation and our target price of 11.8p.
Swallowfield (SWL, 126p, £14.3m), formulates, manufactures and packages quality cosmetics, toiletries and household goods across the whole spectrum of consumer markets for retailers and famous brands such as Next, PZ Cussons and Estee Lauder. Interims to 9 January 2010 reports revenues up 15% to £29.1m (H109: £25.2m), adjusted PBT up 27% to £0.7m (H109: £0.6m) and adjusted EPS up 31% to 4.7p (H109: 3.6p) – an excellent performance by the group in tough market conditions. A 22% increase in DPS to 2.2p sends a positive signal of growth going forward. Net debt was reduced to £2.2m (FY09: 3.4m). Operating margins declined to 28% (FY09: 31%) due to an increase in raw materials, which have now stabilised combined with a shift in the sales mix to lower margin toiletries. The group is focussing on increasing sales in higher margin products, broadening geographic footprint; widening product range and by further enhancing our operational capability through continuous improvement in quality, cost, service and innovation. The group has a strong order book in volume terms and continues to develop existing and new client relationships across an expanding geographical spread. Assuming there is no double dip, Swallowfield is trading in line with 2010 PBT estimate of £1.6m, EPS of 9.77p and DPS of 6.5p. The business has a strong balance sheet with a tangible net asset value of £12.9m. Trading on a 2010 PER of 12.9x with a yield compelling 5.2% and a 2011 PER of 11.9x and a yield of 5.6%, we believe the stock is compelling. The share price has risen 42% since our buy recommendation on 10/09/09. The strong asset backing combined with a generous yield encourages us to retain our BUY recommendation.
Telephonetics (TPH, 7.5p, £8.19m) Finals to November 2009 saw revenues rise by 5.6% to £10.51m (£9.95m) with a first time contribution from the February 2009 acquisition of Datadialogs of £0.55m (reflecting a 27% growth from pre-purchase levels). PBT fell to £0.41m (£1.07m) with EPS of 0.33p (0.87p) and the group ended the period with net cash of £5.1m. With healthy cash balances and the ability to make further acquisitions we rate the company still as a BUY.
Vertu Motors (VTU, 39p, £77m) reports trading for the year ending 28 February will be ahead of market consensus forecasts, driven by the scrappage scheme. The outlook for the remainder of 2010 is uncertain. The weak and fragile UK economy, ending of the scrappage programme, increase in VAT to 17.5%, introduction of the new car “showroom” tax in April and the weak Sterling against the Euro, indicate that new car sales to private customers will decline over the remainder of the year. The fleet, used car and aftersales areas are likely to be more resilient in the coming period. The Group has the strategies and management in place to ensure costs are controlled and dealership performance is maximised in all revenue areas. The market forecasts 2011 PBT of £6m and EPS of 2.2p. The stock trades on a 2011 PER of 18x. We believe the stock is fully valued and initiate with a HOLD.
Wilmington (WIL, 132p, £109.05m) Interim results to December 2009 saw revenues of £36.95m (£43.97m) with Professional Training & Events revenue declining to £20.79m (£26.53m) and Professional Publishing & Information £16.15m (£17.44m). Underlying pre-tax profits of £5.51m (£6.96m) with 4.4p (5.16p) EPS and 3.5p (2.3p) DPS, while net debt increased to £20.51m (£17.83m) that masks modest cash generation offset by a £2.2m acquisition during the period. The group is seeing some pick-up in the outlook, even in banking training, which will combine with a lower cost base to ensure further profits progress. Forecasts of £13m with 10.2p EPS leave the group looking well valued, and we thus reduce our Buy recommendation, last iterated on 09/07/09 at 113.5p, to a HOLD.
YCO Group (YCO, 7.5p, £3.6m), the provider of specialist services to superyachts, expects to break-even for the year ended 31 December 2009. The global weak economic climate has adversely impacted the sale of superyachts. The group have gone through a restructuring program, reducing overheads and improving the structure of cross selling opportunities. The benefits of the restructuring are bearing fruit and there are signs indicating a recovery. We are slightly another downturn in global economies could avert a recovery. The completion of a yacht sale in Q409 will receive the revenue benefit in 2010. The group has management contracts with 50 yachts and is actively seeking to grow this. There are no forecast in the market, but we would expect 2011 to be stronger than 2010. We initiate with a HOLD recommendation.
http://www.proactiveinvestors.co.uk/companies/news/13755/hb-markets-daily-smallcap-newsflash-including-avesco-group-centaur-media-communisis-lidco-and-others--13755.html
Avesco Group (AVS, 43.5p, £10.9m), Taya Investment Company has no current intention to make an offer for Avesco. The share price has risen by 112% since our BUY recommendation, driven by the bid situation. Avesco is an asset play story, with tangible net assets stood at £37.8m, exceeding the current market capitalisation or £10.9m. Given the group is no longer in a bid situation, we believe investors should take profits. We do not foresee the share price to increase substantially in the short-term and expect it to drift southwards instead. We therefore reduce our Buy recommendation to a HOLD or take profits.
Centaur Media (CAU, 50p, £70.44m) Interims to December 2009 saw revenues fall to £23.9m (£31.5m) with an adjusted loss before tax of £1.2m (Profit £0.7m) and a 0.6p (0.5p) DPS. The group ended the period with net debt of £0.7m (net cash of £0.6m at the June 2009 year end) but that was driven primarily by a £0.8m purchase of software. The group comments the rate of decline is lowing, with revenues only down 15% in the final 2 months of the period as opposed to 28% down in the first 4 months. The fall in revenues has been accentuated by a number of events that did not repeat this year, so although events revenues were down 27% the underlying situation was slightly better at 14% down. The group did take action on costs to offset the 24% decline in revenues by cutting admin by some 19%. We admire the group and believe it is reacting correctly to the difficult trading conditions but are still concerned regarding the future ratings. We maintain our SELL.
ClearStream Technologies (CTN, 25.75p, £11.9m) The trading statement reports management are comfortable with current FY2010 estimates of PBT of £0.5m and EPS of 1.0p. Following the manufacturing changes, yields and gross margins have returned to 2009 levels. The group have secured a number of new customers increasing OEM sales. The own-labelling division is focussing on developing sales in BRIC and is seeing some evidence of a recovery in demand from European distributors. Traditionally the business is H2 weighted and this year is no different. We retain our SPECULATIVE BUY recommendation.
Clyde Process Solutions (CPSP, 53p, £21.40m) Trading since the half year has been in-line with market expectations with the end of January order book standing at £19.5m (£24.5m). The group is expanding overseas and is fairly rated in our eyes, a maintained HOLD.
Communisis (CMS, 13.75p, £19.06m) Finals to December 2009 saw sales decline to £190.19m (£257.73m) with underlying pre-tax profits of £5.25m (£12.73m) and EPS of 2.28p (6.24p). As we feared the dividend has been trimmed to a final of 0.43p (1.635p) making a year total of 1.29p (4.13p), giving a year yield total of 9.2%, indeed 3.1% in the final alone. Year end net debt reduced to £16.8m from £16.8m at the interims, despite an adverse working cap movement of £7.9m, raised pension contribution from £1.2m to £2.5m which were offset by a business sale of £3.5m. The group remains confident that the integrated marketing model creates opportunities with 40 of the top 100 customers taking more than 1 service from the group and is throwing up acquisition opportunities. The group is continuing to invest heavily in high tech printing kit that enables personalised marketing. Key concern is the bill and cheque printing business which is inevitably winding down, driven by Government legislation. That said forecasts around £6m PBT with 3p EPS look achievable – so we move the shares from a Sell, last iterated at 16p on 11/11/09, to a HOLD.
Gartmore Fledgling Trust (GMF, 374.5p, £70.39m) Interim report to December 2009 reports a 21.7% NAV rise to 452.1p over the period (outperforming the 15.7% rise in the Fledgling index). It has declared a held 3.5p interim dividend. GFM was ranked 1st in the Association of Investment Companies UK Smaller Companies universe over both the 1 year and 10 year periods to December 2009. GFM notes it sits at a slightly larger discount to NAV (16.6% V.S. the sector average of 16.1%) and that worsened during the period. GFM bought back some 90,000 shares during the period and maintains the ability to buy back more. Like us, GFM believes as yet little of the Quantitive Easing liquidity injected into the markets has reached the smaller cap market place, but it will eventually, probably as corporate activity. BUY
GB Group (GBG, 22.5p, £19.25m) Has announced Racing UK, the subscription TV horse racing channel, has signed to use GBG’s identity management solutions which will be used to consolidate all subscriber information into a single view database. Still a HOLD.
IDOX (IDOX, 10.25p, £35.08m) AGM statement has stated that Q1 revenue and profitability are ahead of the comparable period last year. The group has a large order book that underpins the outlook, though they sensibly note caution regarding the general UK economy and the forthcoming UK election, given its prime focus of software & services to the UK public sector. Forecasts for the year ending October 2010 put the group on a 6.3x PER (based on £7.54m PBT with 1.6p EPS). Although clearly more vulnerable than most to potential UK spending cuts, we believe it’s already discounted the impact and thus maintain our BUY.
Lidco (LID, 19.75p, £34.4m), the cardiovascular monitoring company, reports trading for the year ended 31 January 2010, is ahead of market expectations of pre-tax losses of £1.1m and EPS of -0.6p. Revenues are expected to have increase by c.18% to c. £5.3m, with a 2.7x increase in monitors installed to 2,075. The business is set to become profitable in the current financial year. Lidco is debt free and has net cash of £1.8m at the end of FY2010 (H1 2010: £2.1m). Despite the better than expected performance, we remain concerned about the group’s cash levels. If the business does not become cash generative this year there is a danger of a further cash raise. Trading on a 2010 EV/Sales of 3.4x encourages us to upgrade our sell recommendation to a HOLD.
Pursuit Dynamics (PDX, 165p, £108.57m) So after months of examining the business strategy PDX, under the management of the new CEO Roel Pieper, has decided to re-enter the brewing market. Brewers are inevitably cautious and the sight of a new technology entering, withdrawing and then re-entering the market has certainly done damage to the prospects. We have always been backers of the technology, but feel the share price is still well ahead and we now believe the group will have to do a deal withy a larger operation to secure much take-up of its technology. We still rate the group as a SELL.
Sabien Technology (SNT, 27.5p, £8.7m), the manufacturer of the patented M2G energy saving devices, reports interims to 31 December 2009. Sales up 25% to £0.44m (H109: £0.35m), and pre-tax losses fell by 57% to £0.21m (H109: £0.5m). The order book is strong with £0.8m of sales received for the year to date. Following a placing of £1.475m at 30p per share, the group has ended the period with net cash of £1.1m. The next 6 months will be interesting. The group need to convert the trials into orders and ramp up sales to gain critical mass. We maintain our HOLD recommendation for now, but large contract wins could make this stock more interesting.
Silverdell (SID, 8.875p, £13.5m), the UK supplier of asbestos and environmental consultancy services, reports trading continues to perform in line with 2010 EPS estimates of 1.3p, despite a 6% decline in revenues from 1 October 2009 to 31 January 2010, due to adverse weather conditions. However, enquiry levels remain strong. The business now benefits from a 1% increase in gross margins to 24.6% derived from maximising efficiencies. The group has recently secured new contracts, providing revenue visibility. We continue to be believe the business is undervalued trading on a 2010 PER of 6.7x and 5.2 2011 PER. We retain our SPECULATIVE BUY recommendation and our target price of 11.8p.
Swallowfield (SWL, 126p, £14.3m), formulates, manufactures and packages quality cosmetics, toiletries and household goods across the whole spectrum of consumer markets for retailers and famous brands such as Next, PZ Cussons and Estee Lauder. Interims to 9 January 2010 reports revenues up 15% to £29.1m (H109: £25.2m), adjusted PBT up 27% to £0.7m (H109: £0.6m) and adjusted EPS up 31% to 4.7p (H109: 3.6p) – an excellent performance by the group in tough market conditions. A 22% increase in DPS to 2.2p sends a positive signal of growth going forward. Net debt was reduced to £2.2m (FY09: 3.4m). Operating margins declined to 28% (FY09: 31%) due to an increase in raw materials, which have now stabilised combined with a shift in the sales mix to lower margin toiletries. The group is focussing on increasing sales in higher margin products, broadening geographic footprint; widening product range and by further enhancing our operational capability through continuous improvement in quality, cost, service and innovation. The group has a strong order book in volume terms and continues to develop existing and new client relationships across an expanding geographical spread. Assuming there is no double dip, Swallowfield is trading in line with 2010 PBT estimate of £1.6m, EPS of 9.77p and DPS of 6.5p. The business has a strong balance sheet with a tangible net asset value of £12.9m. Trading on a 2010 PER of 12.9x with a yield compelling 5.2% and a 2011 PER of 11.9x and a yield of 5.6%, we believe the stock is compelling. The share price has risen 42% since our buy recommendation on 10/09/09. The strong asset backing combined with a generous yield encourages us to retain our BUY recommendation.
Telephonetics (TPH, 7.5p, £8.19m) Finals to November 2009 saw revenues rise by 5.6% to £10.51m (£9.95m) with a first time contribution from the February 2009 acquisition of Datadialogs of £0.55m (reflecting a 27% growth from pre-purchase levels). PBT fell to £0.41m (£1.07m) with EPS of 0.33p (0.87p) and the group ended the period with net cash of £5.1m. With healthy cash balances and the ability to make further acquisitions we rate the company still as a BUY.
Vertu Motors (VTU, 39p, £77m) reports trading for the year ending 28 February will be ahead of market consensus forecasts, driven by the scrappage scheme. The outlook for the remainder of 2010 is uncertain. The weak and fragile UK economy, ending of the scrappage programme, increase in VAT to 17.5%, introduction of the new car “showroom” tax in April and the weak Sterling against the Euro, indicate that new car sales to private customers will decline over the remainder of the year. The fleet, used car and aftersales areas are likely to be more resilient in the coming period. The Group has the strategies and management in place to ensure costs are controlled and dealership performance is maximised in all revenue areas. The market forecasts 2011 PBT of £6m and EPS of 2.2p. The stock trades on a 2011 PER of 18x. We believe the stock is fully valued and initiate with a HOLD.
Wilmington (WIL, 132p, £109.05m) Interim results to December 2009 saw revenues of £36.95m (£43.97m) with Professional Training & Events revenue declining to £20.79m (£26.53m) and Professional Publishing & Information £16.15m (£17.44m). Underlying pre-tax profits of £5.51m (£6.96m) with 4.4p (5.16p) EPS and 3.5p (2.3p) DPS, while net debt increased to £20.51m (£17.83m) that masks modest cash generation offset by a £2.2m acquisition during the period. The group is seeing some pick-up in the outlook, even in banking training, which will combine with a lower cost base to ensure further profits progress. Forecasts of £13m with 10.2p EPS leave the group looking well valued, and we thus reduce our Buy recommendation, last iterated on 09/07/09 at 113.5p, to a HOLD.
YCO Group (YCO, 7.5p, £3.6m), the provider of specialist services to superyachts, expects to break-even for the year ended 31 December 2009. The global weak economic climate has adversely impacted the sale of superyachts. The group have gone through a restructuring program, reducing overheads and improving the structure of cross selling opportunities. The benefits of the restructuring are bearing fruit and there are signs indicating a recovery. We are slightly another downturn in global economies could avert a recovery. The completion of a yacht sale in Q409 will receive the revenue benefit in 2010. The group has management contracts with 50 yachts and is actively seeking to grow this. There are no forecast in the market, but we would expect 2011 to be stronger than 2010. We initiate with a HOLD recommendation.
http://www.proactiveinvestors.co.uk/companies/news/13755/hb-markets-daily-smallcap-newsflash-including-avesco-group-centaur-media-communisis-lidco-and-others--13755.html
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