GoldStone (AIM:GRL) is one of the few companies in positive territory this morning, after the company announced a strategic alliance with Bendigo Mining (ASX:BDG).
As part of the alliance Bendigo Mining has subscribed for 32.7 million shares in Goldstone at 6.5 pence per share - a 45% premium to the company’s share price on 6 May. The placing will give Bendigo a 20% equity stake in Goldstone, and the potential to increase its stake through warrants to be issued as part of the agreement. Goldstone is issuing two tranches of warrants to Bendigo. The first tranche will entitle Bendigo to subscribe for 10.9 million shares at 8.5 pence per share between 18 and 30 months from the date of their issue. The second tranche will entitle Bendigo to subscribe for an additional 10.9 million shares at 11.5 pence between 24 and 36 months from their issue.
GoldStone will also offer Bendigo a seat on the board of the Company and has also entered into a technical services agreement to provide support to GoldStone in respect of any development and mining of assets.
"We are extremely pleased that through this transaction GoldStone has gained a mid-tier miner with a strong balance sheet as a long term investor who is prepared to make a significant investment in the Company at a material premium to the market price,” Jurie Wessels, Chief Executive of GoldStone, commented. “We believe that Bendigo shares the optimism we have for our West African assets and that the alliance will add considerable value as we endeavour to advance our exploration projects into open cast or underground mining operations."
Rod Hanson, Managing Director and Chief Executive of Bendigo commented: "We are very excited to enter into this alliance with GoldStone and believe it provides a low risk expansion into West Africa, which is one of the most attractive locations for new gold discoveries globally. We believe that GoldStone has the right people in the right place and has done an excellent job in assembling a strong portfolio of exploration assets in Ghana and Senegal. Our plan is for a long term relationship in which GoldStone and Bendigo will grow and prosper together in West Africa."
Bendigo Mining is funding the investment from its cash resources, which were A$57.4 million as at 31 March 2010. Bendigo is expected to produce 80,000 to 90,000 oz of gold in the financial year ending 30 June 2010 from its two underground gold mines, the Henty Gold Mine on the West Coast of Tasmania and the Kangaroo Flat Mine in Bendigo, Victoria.
http://www.proactiveinvestors.co.uk/companies/news/16351/mid-tier-gold-producer-bendigo-mining-takes-20-stake-in-goldstone-16351.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, 7 May 2010
Gold passes $1200/ounce as global equities take a dive
Gold spiked to $1200/oz last night, hitting a new 2010 and all time high. Demand for the yellow metal defied a rout in US equities, and a rising US dollar, which if often applies downward pressure on gold. However, yesterday's spike in gold was due to its appeal as a safe-haven asset by investors amid rising volatility in currency and stock markets, which are heavily impacted by the ongoing European debt crisis.
In the latest development, Greece agreed to massive budget cuts that will amount to €30 billion over the next three years on top of the economic austerity measures already implemented in order to secure a €110 billion bailout from the European Union and International Monetary Fund (IMF).
Germany, which will account for the bulk of the financial aid package, said it would not provide any funds for Greece unless it passes economic reforms to keep its soaring budget deficit under control, forcing the country to radically cut spending.
The EU’s stats agency Eurostat has recently revised Greece’s 2009 deficit to 13.6% of the GDP from the previous estimate of 12.9%. The county is aiming to bring the deficit within the EU’s cap of 3% by 2014.
Greece’s fiscal crisis has been weighing on the euro for months to weaken it against the US dollar and limit gains in gold, which is seen as an alternative investment to the greenback and usually moves inversely to the American currency. However, gold has lately defied this trend, coming close to topping all time highs on safe-haven buying.
http://www.proactiveinvestors.co.uk/companies/news/16338/gold-passes-1200ounce-as-global-equities-take-a-dive-16338.html
In the latest development, Greece agreed to massive budget cuts that will amount to €30 billion over the next three years on top of the economic austerity measures already implemented in order to secure a €110 billion bailout from the European Union and International Monetary Fund (IMF).
Germany, which will account for the bulk of the financial aid package, said it would not provide any funds for Greece unless it passes economic reforms to keep its soaring budget deficit under control, forcing the country to radically cut spending.
The EU’s stats agency Eurostat has recently revised Greece’s 2009 deficit to 13.6% of the GDP from the previous estimate of 12.9%. The county is aiming to bring the deficit within the EU’s cap of 3% by 2014.
Greece’s fiscal crisis has been weighing on the euro for months to weaken it against the US dollar and limit gains in gold, which is seen as an alternative investment to the greenback and usually moves inversely to the American currency. However, gold has lately defied this trend, coming close to topping all time highs on safe-haven buying.
http://www.proactiveinvestors.co.uk/companies/news/16338/gold-passes-1200ounce-as-global-equities-take-a-dive-16338.html
Smallcap news: Medusa Mining, Goldstone, Caledonia Mining, Terrace Hill, Tanfield, Capital Pub Co
Medusa Mining (MML), which is listed on the ASX, TSX and AIM markets, reported that drilling at its Lingig Project has continued to intersect copper mineralisation in two geological settings. The most recent and most northerly drill hole returned 154.60 metres at 0.45% copper (with last 45.90 metres averaging 0.65% copper at a 0.3% copper cut-off) but was abandoned in strong mineralisation.
GoldStone (GRL), a junior exploration company focused on gold in Ghana, Senegal and Gabon, announce a strategic alliance with Bendigo Mining (ASX: BDG), a mid-tier Australian gold producer. Bendigo has agreed to subscribe for 32.7 million shares at a premium of 45% to the closing price on 6 May.
Capital Pub Company (CPUB) continued to defy the wider pub industry, confirming that trading at its London properties is ‘significantly ahead of last year’. The pub owner and operator also announced the sale of the freehold of the Marquis of Granby for a consideration of £3.49 million.
Caledonia Mining (AIM:CMCL) said it had taken ‘immediate steps’ to address electricity supply concerns to its Blanket Gold Mine in Zimbabwe. The company has ordered the first of several planned 2.5MVA diesel generators.
UK property development and investment group, Terrace Hill Group plc (THG) announced that it has let 24,352 sq ft of office space at its mixed-use development at 129 Wilton Road, Victoria. 88% of the office space has now been leased. Terrace Hill has let the space on a 15 year lease at £40 per sq. ft.
Tanfield Group (TAN), once a darling of the junior market, reported pretty grim numbers for the year ended 31 December 2009. Turnover slumped from £146 million in 2008 to £58 million in 2009, while the company swung to an operating loss of £21.4 million (2008: operating profit £1.3 million). Net cash fell from £11.1 million to £5.4 million. During 2009, the company cut staff costs by 42%. Tanfield’s Chairman Jon Pither said the company was expecting 2010 to be ‘challenging’.
Alliance Pharma (AIM: APH) said Nigel Wray has bought a further 750,000 shares in the company this week, taking his holding to 25,269,995 shares, or 11.08% of the capital. He is still the group's second largest shareholder behind chief executive John Dawson.
http://www.proactiveinvestors.co.uk/companies/news/16349/smallcap-news-medusa-mining-goldstone-caledonia-mining-terrace-hill-tanfield-capital-pub-co-16349.html
GoldStone (GRL), a junior exploration company focused on gold in Ghana, Senegal and Gabon, announce a strategic alliance with Bendigo Mining (ASX: BDG), a mid-tier Australian gold producer. Bendigo has agreed to subscribe for 32.7 million shares at a premium of 45% to the closing price on 6 May.
Capital Pub Company (CPUB) continued to defy the wider pub industry, confirming that trading at its London properties is ‘significantly ahead of last year’. The pub owner and operator also announced the sale of the freehold of the Marquis of Granby for a consideration of £3.49 million.
Caledonia Mining (AIM:CMCL) said it had taken ‘immediate steps’ to address electricity supply concerns to its Blanket Gold Mine in Zimbabwe. The company has ordered the first of several planned 2.5MVA diesel generators.
UK property development and investment group, Terrace Hill Group plc (THG) announced that it has let 24,352 sq ft of office space at its mixed-use development at 129 Wilton Road, Victoria. 88% of the office space has now been leased. Terrace Hill has let the space on a 15 year lease at £40 per sq. ft.
Tanfield Group (TAN), once a darling of the junior market, reported pretty grim numbers for the year ended 31 December 2009. Turnover slumped from £146 million in 2008 to £58 million in 2009, while the company swung to an operating loss of £21.4 million (2008: operating profit £1.3 million). Net cash fell from £11.1 million to £5.4 million. During 2009, the company cut staff costs by 42%. Tanfield’s Chairman Jon Pither said the company was expecting 2010 to be ‘challenging’.
Alliance Pharma (AIM: APH) said Nigel Wray has bought a further 750,000 shares in the company this week, taking his holding to 25,269,995 shares, or 11.08% of the capital. He is still the group's second largest shareholder behind chief executive John Dawson.
http://www.proactiveinvestors.co.uk/companies/news/16349/smallcap-news-medusa-mining-goldstone-caledonia-mining-terrace-hill-tanfield-capital-pub-co-16349.html
BP updates on Gulf of Mexico clean-up and well control operations
Oil Major BP (LSE: BP) updated on developments in the response to the oil spill from the MC252 well in the Gulf of Mexico, following the explosion of a rig contracted by BP and owned by Transocean, saying work continues to attempt to bring MC252 under control, to stop the flow of oil and to contain the oil subsea.
The containment dome arrived on location yesterday, May 6, from Port Fourchon, Louisiana, ready to be deployed. Once lowered to the sea bed, the next steps will be to connect the 40x24x14 feet steel dome, which weighs almost 100 tons, to a vessel on the surface. Once this operation is complete it will be possible to assess the effectiveness of the solution.
Work on the first relief well, which began on Sunday May 2, continues. It is expected to take some three months to complete.
Work continues to collect and disperse oil that has reached the surface of the sea. More than 260 vessels are being used, including skimmers, tugs, barges and recovery vessels. To date the oil spill response team has recovered about 30,000 barrels of oil-water mix, the company said.
The total length of deployed boom is now over 700,000 feet as part of the efforts to stop oil reaching the coast. Some one million feet is available and more than 300,000 feet is on order.
Suitable weather conditions allowed controlled burning of surface oil to be carried out.
A BP-led effort to address shoreline clean up continues. More than 4,000 people have been trained, out of about 30,000 volunteers, to deal with oil as it comes onshore, the company added.
http://www.proactiveinvestors.co.uk/companies/news/16348/bp-updates-on-gulf-of-mexico-clean-up-and-well-control-operations-16348.html
The containment dome arrived on location yesterday, May 6, from Port Fourchon, Louisiana, ready to be deployed. Once lowered to the sea bed, the next steps will be to connect the 40x24x14 feet steel dome, which weighs almost 100 tons, to a vessel on the surface. Once this operation is complete it will be possible to assess the effectiveness of the solution.
Work on the first relief well, which began on Sunday May 2, continues. It is expected to take some three months to complete.
Work continues to collect and disperse oil that has reached the surface of the sea. More than 260 vessels are being used, including skimmers, tugs, barges and recovery vessels. To date the oil spill response team has recovered about 30,000 barrels of oil-water mix, the company said.
The total length of deployed boom is now over 700,000 feet as part of the efforts to stop oil reaching the coast. Some one million feet is available and more than 300,000 feet is on order.
Suitable weather conditions allowed controlled burning of surface oil to be carried out.
A BP-led effort to address shoreline clean up continues. More than 4,000 people have been trained, out of about 30,000 volunteers, to deal with oil as it comes onshore, the company added.
http://www.proactiveinvestors.co.uk/companies/news/16348/bp-updates-on-gulf-of-mexico-clean-up-and-well-control-operations-16348.html
FTSE 350 news summary: RBS, Easyjet, ITV, Catlin Group
With all eyes on the election result, and expectations of a pretty poor performance for equity markets today, news flow from the FTSE 100 was very light.
The Royal Bank of Scotland Group (LSE:RBS) reported today, announcing a first quarter operating profit of £713 million, as the partially nationalised bank said it benefited favourable credit trends and strong seasonal results from its Global Banking & Markets business.
Meanwhile in the FTSE 250, investor’s found slightly more to chew on.
EasyJet (LSE:EZJ) reported passenger statistics for the month ending 30 April 2010, which were impacted by the volcanic ash cloud. Before this disruption EasyJet expected passenger numbers in April to be around 4.3 million representing growth in passenger numbers of 14% and a load factor of 86.2%. Due to the large number of cancellations however, Easyjet’s load factor came in at 85.2% and passenger numbers were 3.5 million.
Broadcaster ITV (LSE:ITV) released an interim management statement this morning ahead of its AGM. Group revenues for the three month period ended 31 March 2010 rose 6% to £450 million, as advertising revenues continued to recover from their low in 2009. The FTSE 250 constituent remained cautious however, stating that the outlook for the second half was ‘highly uncertain’.
Insurer and Reinsurer, Catlin Group (LSE:CGL) also released its interim management statement, reporting a 9% rise in gross premiums written to $1.3 billion, 39% increase in premiums written by non-London hubs and 0.5% increase in average weighted premium rates across the group. The company’s strongest gains came in property insurance.
http://www.proactiveinvestors.co.uk/companies/news/16347/ftse-350-news-summary-rbs-easyjet-itv-catlin-group-16347.html
The Royal Bank of Scotland Group (LSE:RBS) reported today, announcing a first quarter operating profit of £713 million, as the partially nationalised bank said it benefited favourable credit trends and strong seasonal results from its Global Banking & Markets business.
Meanwhile in the FTSE 250, investor’s found slightly more to chew on.
EasyJet (LSE:EZJ) reported passenger statistics for the month ending 30 April 2010, which were impacted by the volcanic ash cloud. Before this disruption EasyJet expected passenger numbers in April to be around 4.3 million representing growth in passenger numbers of 14% and a load factor of 86.2%. Due to the large number of cancellations however, Easyjet’s load factor came in at 85.2% and passenger numbers were 3.5 million.
Broadcaster ITV (LSE:ITV) released an interim management statement this morning ahead of its AGM. Group revenues for the three month period ended 31 March 2010 rose 6% to £450 million, as advertising revenues continued to recover from their low in 2009. The FTSE 250 constituent remained cautious however, stating that the outlook for the second half was ‘highly uncertain’.
Insurer and Reinsurer, Catlin Group (LSE:CGL) also released its interim management statement, reporting a 9% rise in gross premiums written to $1.3 billion, 39% increase in premiums written by non-London hubs and 0.5% increase in average weighted premium rates across the group. The company’s strongest gains came in property insurance.
http://www.proactiveinvestors.co.uk/companies/news/16347/ftse-350-news-summary-rbs-easyjet-itv-catlin-group-16347.html
FTSE 100 set to open sharply lower as hung parliament and rout in US equities weigh
Britain woke up the prospect of a hung parliament, as results from yesterday’s voting continued to trickle in. By 7:30 am the Conservative party was in the lead with 285 seats, Labour on 231 seats and the Liberal Democrats, to many commentators surprise on only 50 seats. To secure a majority in the Houses of Parliament one party needs to secure 326 seats, which based on projections will not happen for the Conservative party. Labour rhetoric throughout the night has suggested they may try to form a coalition government with the Liberals, but it is not yet certain whether the two parties combined seats would even achieve that.
The result of the election weighed on FTSE 100 futures, pointing to a 130 point drop at the open, which was would be one of the sharpest moves in 2010, but investor’s were more spooked by a rout in the United States last night, were both the Dow Jones Industrial Index, NASDAQ and S&P 500 all fell more than 3%. At one point, the Dow actually fell more than 900 points, or nearly 10% - the worst fall ever recorded, but sources are now pointing to an error by a large bank using high frequency trading techniques (software that can execute large volumes of trades).
Many analysts in the United States were equally surprised by price action in spot Gold, which soared above $1200/ounce, smashing its previous all time record. Gold is currently trading at $1203 an ounce, and defied a stronger US dollar last night and a rout in equity markets and oil futures.
Gold bulls however reiterated their view that the surge in gold was safe haven buying as investors continue to fret over the risk of Greece’s debt problem spreading to other countries in the European Union, with particular concerns surrounding Spain and Portugal.
http://www.proactiveinvestors.co.uk/companies/news/16345/ftse-100-set-to-open-sharply-lower-as-hung-parliament-and-rout-in-us-equities-weigh-16345.html
The result of the election weighed on FTSE 100 futures, pointing to a 130 point drop at the open, which was would be one of the sharpest moves in 2010, but investor’s were more spooked by a rout in the United States last night, were both the Dow Jones Industrial Index, NASDAQ and S&P 500 all fell more than 3%. At one point, the Dow actually fell more than 900 points, or nearly 10% - the worst fall ever recorded, but sources are now pointing to an error by a large bank using high frequency trading techniques (software that can execute large volumes of trades).
Many analysts in the United States were equally surprised by price action in spot Gold, which soared above $1200/ounce, smashing its previous all time record. Gold is currently trading at $1203 an ounce, and defied a stronger US dollar last night and a rout in equity markets and oil futures.
Gold bulls however reiterated their view that the surge in gold was safe haven buying as investors continue to fret over the risk of Greece’s debt problem spreading to other countries in the European Union, with particular concerns surrounding Spain and Portugal.
http://www.proactiveinvestors.co.uk/companies/news/16345/ftse-100-set-to-open-sharply-lower-as-hung-parliament-and-rout-in-us-equities-weigh-16345.html
Alliance Pharma shareholder Nigel Wray buys 750,000 more shares
Alliance Pharma (AIM: APH) said Nigel Wray has bought a further 750,000 shares in the company this week, taking his holding to 25,269,995 shares, or 11.08% of the capital. He is still the group's second largest shareholder behind chief executive John Dawson.
Alliance Pharma in February completed the acquisition of Cambridge Laboratories. The deal, which added 18 new prescription products to Alliance’s portfolio, is expected to be significantly earnings enhancing in the current financial year. Cambridge’s commercial manager Peter Butterfield has also been appointed to the Alliance Pharma board.
In late March, Alliance published its results from a landmark year in which the pharmaceutical company increased sales by 44% to £31.2m compared with 21.8m in the previous financial year. In the twelve months ended 31 December 2009, the company achieved a three-fold increase in pretax profit before exceptionals to £8.6m as well as in adjusted earnings per share (EPS) to 3.55p.
According to Alliance, its record sales performance reflected the company’s transition to the new business model, set out in 2007, with the benefits clearly evidenced in the results.
"2009 was a landmark year for Alliance, with major increases in turnover, profitability and cash generation, and the commencement of dividend payments”, Alliance chairman Michael Gatenby commented. “We look forward to more strong results in 2010, particularly following the Cambridge Laboratories acquisition."
Alliance said in its results statement that the development side of the business is now in abeyance, with no investment of any substance made last year, stating there are no further plans to do so. Through its concentration on the trading side of its business, the company said it has reached a critical mass of human, product and financial resources which enable it to invest confidently in adding more established products to its portfolio.
In the remainder of the year the company is well placed to maintain strong growth, particularly driven by the Cambridge Laboratories acquisition, the full year effect of the Buccastem and Timodine acquisition, and organic growth from the dermatology portfolio, Alliance said. Whilst the company noted its caution in terms of competition in Deltacortril’s market, Alliance is confident that it is set for another strong performance this year.
http://www.proactiveinvestors.co.uk/companies/news/16344/alliance-pharma-shareholder-nigel-wray-buys-750000-more-shares-16344.html
Alliance Pharma in February completed the acquisition of Cambridge Laboratories. The deal, which added 18 new prescription products to Alliance’s portfolio, is expected to be significantly earnings enhancing in the current financial year. Cambridge’s commercial manager Peter Butterfield has also been appointed to the Alliance Pharma board.
In late March, Alliance published its results from a landmark year in which the pharmaceutical company increased sales by 44% to £31.2m compared with 21.8m in the previous financial year. In the twelve months ended 31 December 2009, the company achieved a three-fold increase in pretax profit before exceptionals to £8.6m as well as in adjusted earnings per share (EPS) to 3.55p.
According to Alliance, its record sales performance reflected the company’s transition to the new business model, set out in 2007, with the benefits clearly evidenced in the results.
"2009 was a landmark year for Alliance, with major increases in turnover, profitability and cash generation, and the commencement of dividend payments”, Alliance chairman Michael Gatenby commented. “We look forward to more strong results in 2010, particularly following the Cambridge Laboratories acquisition."
Alliance said in its results statement that the development side of the business is now in abeyance, with no investment of any substance made last year, stating there are no further plans to do so. Through its concentration on the trading side of its business, the company said it has reached a critical mass of human, product and financial resources which enable it to invest confidently in adding more established products to its portfolio.
In the remainder of the year the company is well placed to maintain strong growth, particularly driven by the Cambridge Laboratories acquisition, the full year effect of the Buccastem and Timodine acquisition, and organic growth from the dermatology portfolio, Alliance said. Whilst the company noted its caution in terms of competition in Deltacortril’s market, Alliance is confident that it is set for another strong performance this year.
http://www.proactiveinvestors.co.uk/companies/news/16344/alliance-pharma-shareholder-nigel-wray-buys-750000-more-shares-16344.html
Jupiter Energy achieves first sale of oil from J-50 well, Kazakhstan
Kazakhstan-focussed Jupiter Energy (ASX:JPR) has released initial flow rates from the J-50 well which is located on the 100% owned and operated Block 31 and made its first sale of oil.
The J-50 well test "continues with extended flow on 10mm choke at 220 barrels of per day (bopd)." The Company has made its first sale of oil produced from its J-50 well.
David Thorpe, managing director said this was a "major milestone for the company having achieved our first revenue objective with the successful off take of 183bbl of Block 31, Middle Triassic crude oil from the J-50 well."
Jupiter has transformed itself from an oil explorer to an oil producer.
Produced oil is being sold at the wellhead and transported by customer road tanker from the J-50 location to a nearby terminal.
The company plans to shut in the well and run downhole pressure gauges. After this, it will open the well and conduct reservoir pressure measurements over a range of choke sizes which is a statutory requirement in Kazakhstan.
The well will then be shut in and drill rig demobilised. A 90 day production test will commence. During the production test, the operator will "stimulate the well to maximise productivity in line with offset well production rates."
Westhouse Securities issued a note this week, and said, "with additional wells planned to begin producing later this year, we believe the production outlook for Jupiter is solid," the broker added.
http://www.proactiveinvestors.co.uk/companies/news/16342/jupiter-energy-achieves-first-sale-of-oil-from-j-50-well-kazakhstan-16342.html
The J-50 well test "continues with extended flow on 10mm choke at 220 barrels of per day (bopd)." The Company has made its first sale of oil produced from its J-50 well.
David Thorpe, managing director said this was a "major milestone for the company having achieved our first revenue objective with the successful off take of 183bbl of Block 31, Middle Triassic crude oil from the J-50 well."
Jupiter has transformed itself from an oil explorer to an oil producer.
Produced oil is being sold at the wellhead and transported by customer road tanker from the J-50 location to a nearby terminal.
The company plans to shut in the well and run downhole pressure gauges. After this, it will open the well and conduct reservoir pressure measurements over a range of choke sizes which is a statutory requirement in Kazakhstan.
The well will then be shut in and drill rig demobilised. A 90 day production test will commence. During the production test, the operator will "stimulate the well to maximise productivity in line with offset well production rates."
Westhouse Securities issued a note this week, and said, "with additional wells planned to begin producing later this year, we believe the production outlook for Jupiter is solid," the broker added.
http://www.proactiveinvestors.co.uk/companies/news/16342/jupiter-energy-achieves-first-sale-of-oil-from-j-50-well-kazakhstan-16342.html
Did a fat finger cause a 900 point drop on the Dow last night?
Reports from CNBC late last night and other sources suggest that it was a Citigroup trader that accidentally entered a sell side trade of US$16 billion - when they meant to do US$16 million.
Since the market came back and only ended down over 3%, all the focus now is on what happened. There's going to be an investigation into Procter & Gamble (PG) trading, Accenture (ACN) and the market as a whole.
In addition to the fat finger error, there will be a lot of talk about high-frequency trading and its affect.
Blue Chip US stock, Procter & Gamble (PG), dropped roughly 30% in a brief period today to a low of $39.37.
The biggest intraday point drop ever in the Dow Jones Industrial Average may have been caused by an erroneous trade entered by a person at a big Wall Street bank, multiple market sources said on Thursday.
The so-called "fat finger" trade apparently involved an exchange-traded fund that holds shares of some of the biggest and most widely traded stocks, sources said. The trade apparently was put in on the Nasdaq Stock Market, sources said.
Several sources said the speculation is that the trade was entered by someone at Citigroup. A Citigroup spokesman said it was investigating the rumour but that the bank currently had no evidence that an erroneous trade had been made.
North American markets that had started the day on a positive note with good local economic news thenwent into free fall Thursday afternoon, with the Dow Jones index in the U.S. down nearly 1,000 points at one point and Canada’s S&P/TSX losing more than 450 points, before quickly recovering.
In Greece, parliament passed austerity measures needed to secure US$149 billion in international loans despite demonstrations on the street.
The measures, which will slash pensions and civil servants’ pay and increase consumer taxes, passed by a 172-121 vote in parliament.
http://www.proactiveinvestors.co.uk/companies/news/16341/did-a-fat-finger-cause-a-900-point-drop-on-the-dow-last-night-16341.html
Since the market came back and only ended down over 3%, all the focus now is on what happened. There's going to be an investigation into Procter & Gamble (PG) trading, Accenture (ACN) and the market as a whole.
In addition to the fat finger error, there will be a lot of talk about high-frequency trading and its affect.
Blue Chip US stock, Procter & Gamble (PG), dropped roughly 30% in a brief period today to a low of $39.37.
The biggest intraday point drop ever in the Dow Jones Industrial Average may have been caused by an erroneous trade entered by a person at a big Wall Street bank, multiple market sources said on Thursday.
The so-called "fat finger" trade apparently involved an exchange-traded fund that holds shares of some of the biggest and most widely traded stocks, sources said. The trade apparently was put in on the Nasdaq Stock Market, sources said.
Several sources said the speculation is that the trade was entered by someone at Citigroup. A Citigroup spokesman said it was investigating the rumour but that the bank currently had no evidence that an erroneous trade had been made.
North American markets that had started the day on a positive note with good local economic news thenwent into free fall Thursday afternoon, with the Dow Jones index in the U.S. down nearly 1,000 points at one point and Canada’s S&P/TSX losing more than 450 points, before quickly recovering.
In Greece, parliament passed austerity measures needed to secure US$149 billion in international loans despite demonstrations on the street.
The measures, which will slash pensions and civil servants’ pay and increase consumer taxes, passed by a 172-121 vote in parliament.
http://www.proactiveinvestors.co.uk/companies/news/16341/did-a-fat-finger-cause-a-900-point-drop-on-the-dow-last-night-16341.html
Range Resources requests trading halt on ASX pending Texan reserve report
Range Resources (ASX: RRS, AIM:RRL) had requested a trading halt pending the release of an announcement regarding a reserves and valuation report on the company's Texan interests.
The trading halt is to last until the earlier of the company releasing an announcement, or until the commencement of trade on Tuesday, 11 May, 2010.
The company is not aware of any reason why the trading halt should not be granted.
http://www.proactiveinvestors.co.uk/companies/news/16340/range-resources-requests-trading-halt-on-asx-pending-texan-reserve-report-16340.html
The trading halt is to last until the earlier of the company releasing an announcement, or until the commencement of trade on Tuesday, 11 May, 2010.
The company is not aware of any reason why the trading halt should not be granted.
http://www.proactiveinvestors.co.uk/companies/news/16340/range-resources-requests-trading-halt-on-asx-pending-texan-reserve-report-16340.html
Medusa Mining hits more copper at Lingig prospect
Medusa Mining (ASX: MML, ) has reported through its Philippines subsidiary, Philsaga Mining Corporation, that drilling at Lingig has continued to intersect copper mineralisation in two geological settings.
The most recent and most northerly drill hole returned 154.60 metres at 0.45% copper (with last 45.90 metres averaging 0.65% copper at a 0.3% copper cut-off) but was abandoned in strong mineralisation.
Managing Director Geoff Davis commented "we continue to make good progress in unravelling the mineralisation and its controls at Lingig."
"Whilst the basalt-hosted mineralisation appears to be open down-plunge and with the potential to develop into a larger body of mineralisation, at the breccia-hosted mineralisation we are now demonstrating copper mineralisation within a large breccia body with porphyry copper associations and which is open to the south."
"The company’s copper portfolio is expanding with the recent discovery of the Usa copper-gold porphyry target. Further work is expected to continue to add value to these exploration targets,” he added.
Shares in Medusa Mining have performed exceptionally welll over th past few years, rising from around 30 pence per share in 2008 to nearly 300 pence recently. The company has benefited from its decision to maintain listings on London's Alternative Investment Market, the Toronto Stock Exchange and Austrlian Stock Exchange.
While the copper was reported on drill results for copper this morning, the main driver of the business is the high grade, underground Co-0 gold mine.
http://www.proactiveinvestors.co.uk/companies/news/16339/medusa-mining-hits-more-copper-at-lingig-prospect-16339.html
The most recent and most northerly drill hole returned 154.60 metres at 0.45% copper (with last 45.90 metres averaging 0.65% copper at a 0.3% copper cut-off) but was abandoned in strong mineralisation.
Managing Director Geoff Davis commented "we continue to make good progress in unravelling the mineralisation and its controls at Lingig."
"Whilst the basalt-hosted mineralisation appears to be open down-plunge and with the potential to develop into a larger body of mineralisation, at the breccia-hosted mineralisation we are now demonstrating copper mineralisation within a large breccia body with porphyry copper associations and which is open to the south."
"The company’s copper portfolio is expanding with the recent discovery of the Usa copper-gold porphyry target. Further work is expected to continue to add value to these exploration targets,” he added.
Shares in Medusa Mining have performed exceptionally welll over th past few years, rising from around 30 pence per share in 2008 to nearly 300 pence recently. The company has benefited from its decision to maintain listings on London's Alternative Investment Market, the Toronto Stock Exchange and Austrlian Stock Exchange.
While the copper was reported on drill results for copper this morning, the main driver of the business is the high grade, underground Co-0 gold mine.
http://www.proactiveinvestors.co.uk/companies/news/16339/medusa-mining-hits-more-copper-at-lingig-prospect-16339.html
Greek Crisis and its relationship to the Widening Spread in WTI Crude
In recent weeks, the futures curve for West Texas Intermediate (WTI) crude oil, traded on the New York Mercantile Exchange (Nymex), has seen some significant steepening as near term prospects for the US oil market diverge away from the broader outlook across crude oil markets. At the same time, the US crude benchmark is no longer showing the traditional premium over the European benchmark Brent crude, and has in fact reversed, and extended Brent’s comparative outperformance (or more accurately WTI’s underperformance) over the same period. Considering these things, it is implicit that some near term bearish factors have been hitting the market in recent weeks, while at the same time the longer term and more fundamental outlook for crude oil going forward, has at least remained stable and perhaps even firmed up a little.
The ‘normal’ or ‘fallback’ position for any commodity futures curve is a contango, that is to say the price of each futures contract get subsequently higher as you move further outward along the curve. The opposite to this, which relatively infrequently happens and tends to be on one or two individual contracts, rather than a systematic shift across the curve, is backwardation, where a future price goes below the price of contract at the shorter end of the curve. This state of contango comes about form the very nature of derivatives contracts and the commodity markets. It is a common misconception that a futures price somehow represents a predication of what the commodity’s price will be at a given point in the future. Although, as we will soon see, there is undoubtedly an aspect of expectations from the market as to where the futures price will be compared to current price (e.g. longer term outlook better than near term, means long end of curve will outperform short end), futures contracts should in a perfect market represent the current price of the commodity, plus the cost of storing that commodity for the period until that futures contract expires. This comes about through the potential arbitrage opportunities that any premium over this level offers.
If we demonstrate this with an example: if the current price of crude oil is $70/bbl, and the twelve month future is trading at $80/bbl, then one could purchase the front crude contract and sell the twelve month future contract at this point in time, immediately locking in $10/bbl profit. There is a cost of storing a physical commodity over a time period however, so for crude this may be warehouse or tanker storage, rents etc. If we assume that this is say $3/bbl over twelve months, then in the above example the profit would actually be $7/bbl.
With this arbitrage opportunity in place, the market as a whole would buy more front month contracts, driving up the price, and sell more of the twelve month contract, pressuring prices. As with the classic Adam Smith example of ‘invisible hands’, these two prices would converge as long as it is profitable. Eventually the future price will only represent the current price, plus this $3/bbl cost of storing crude for twelve months as this in effect means the marginal revenue will equate to the marginal cost, and cetris paribus, no further demand or supply will come through in either contract.
Unlike the calendar spread, the traditional difference in price between the WTI Nymex crude benchmark and the European Brent Crude benchmark, traded primarily on the Intercontinental Exchange (ICE), comes about because of the fundamental differences between the two crude oil products. Although both are classed as the higher quality ‘light sweet crude’ (high gravity, lower viscosity, low sulfur, primarily used in high end products such as gasoline), there are some mild difference between the two that result in WTI contracts, generally showing a premium of around a few dollars over the equivalent Brent contract.
Brent crude, unlike WTI, is actually a blend of light sweet crudes from fifteen different oil fields located across the North Sea, and because of this actually has a slightly higher sulfur content and a slightly lower API gravity, i.e. Although it is light sweet, it is not quite as light or as sweet as WTI (API Gravity 38.3 degrees versus 39.6 degrees for WTI, sulfur 0.37% versus 0.24% for WTI), and as such, sees slightly less demand and so is cheaper (generally speaking) than WTI.
This is not currently the case however, with the front Brent contract trading around $3/bbl higher than the WTI contract. Although one could consider this as an indication of a fundamental market shift in conditions surrounding the two benchmark types, if we take it in context of the widening contango in the WTI curve itself, it would seem to indicate more specific pressure at the front of the WTI curve. Indeed, if we compare the June 2011 (Jun11) Brent contract to the Jun11 WTI future, the Brent contract only trades around 30 cents higher than the WTI, in effect showing us that in the longer term, the fundamentals between the two benchmarks are expected to fall back to the norm.
So this brings about the question, what is currently bearish for the front of the US crude curve, while having a lesser impact on the broader crude oil market?
The primary reason for this over the past few weeks has been the continuing turmoil surrounding the Greek debt crisis, the potential for other European peripheral countries to go down the same path, and all the subsequent risk aversion and currency moves coming off the back of it. This has been impacting the front WTI contract in two predominant ways; firstly, the highly liquid and predominantly paper traded, WTI front contract has over the past year or so been showing a high correlation with the equity markets, traders in effect taking stock indices as an indicator of global recovery and potential future crude oil demand.
The Greek crisis has caused a widespread sell off in global stock markets amid fears that banks across the world may have exposure to the country’s sovereign debt, which Greece has the potential to default on. This increased risk aversion across the markets has caused a flight to safety for traders, with those holding speculative positions at the short end of the WTI Nymex curve, quickly closing positions. Coupled with the correlation between the front WTI contract and stock indices (The current Jun10 contract and the S&P 500 stock index show a correlation of 79%), the front of the curve has been seeing the brunt of the selling pressure.
Secondly, the Greek debt problems have naturally caused the euro to devalue against the US dollar. As Greece (and other periphery countries) looks set to have less foreign investment, lower GDP growth etc, the euro has been steadily losing ground during this crisis. A weaker euro has made the comparative cost of buying WTI contracts, priced in US dollars, more and more expensive for those traders based in Europe. This has caused demand to slacken in the near term and in turn, placed pressure at the front of the WTI curve.
While the further dated contracts have been following a similar price performance, it has been to a much lesser extent than the more immediate impact on the WTI Nymex Jun10 contract. Similarly, although Brent crude is also priced in US dollars, it is primarily traded within Europe and in Asia, and so the falling euro dollar has had far less impact (the generally weaker euro against Asian currencies is having some impact, but again to a lesser extent than for the US benchmark).
This divergence between near term and longer run fundamentals for crude oil has been the key weight in recent weeks as the Greek debt crisis continues to dominate news flow.
This isn’t to say there are not a myriad of other factors to consider, both for calendar spreads and the WTI – Brent spread. But the Greek crisis and subsequent moves in the stock markets and currencies markets have been the key driver behind the widening spread and the steepening of the WTI futures curve since the news surrounding Greece began to come to the forefront.
Whether or not this becomes a more systematic shift for crude oil products remains to be seen, however it is certain that until fears surrounding Greece and European peripheries begin to wane, the short end of the WTI Nymex crude curve has at least one hurdle to overcome on its road to recovery.
http://www.proactiveinvestors.co.uk/companies/news/16343/greek-crisis-and-its-relationship-to-the-widening-spread-in-wti-crude-16343.html
The ‘normal’ or ‘fallback’ position for any commodity futures curve is a contango, that is to say the price of each futures contract get subsequently higher as you move further outward along the curve. The opposite to this, which relatively infrequently happens and tends to be on one or two individual contracts, rather than a systematic shift across the curve, is backwardation, where a future price goes below the price of contract at the shorter end of the curve. This state of contango comes about form the very nature of derivatives contracts and the commodity markets. It is a common misconception that a futures price somehow represents a predication of what the commodity’s price will be at a given point in the future. Although, as we will soon see, there is undoubtedly an aspect of expectations from the market as to where the futures price will be compared to current price (e.g. longer term outlook better than near term, means long end of curve will outperform short end), futures contracts should in a perfect market represent the current price of the commodity, plus the cost of storing that commodity for the period until that futures contract expires. This comes about through the potential arbitrage opportunities that any premium over this level offers.
If we demonstrate this with an example: if the current price of crude oil is $70/bbl, and the twelve month future is trading at $80/bbl, then one could purchase the front crude contract and sell the twelve month future contract at this point in time, immediately locking in $10/bbl profit. There is a cost of storing a physical commodity over a time period however, so for crude this may be warehouse or tanker storage, rents etc. If we assume that this is say $3/bbl over twelve months, then in the above example the profit would actually be $7/bbl.
With this arbitrage opportunity in place, the market as a whole would buy more front month contracts, driving up the price, and sell more of the twelve month contract, pressuring prices. As with the classic Adam Smith example of ‘invisible hands’, these two prices would converge as long as it is profitable. Eventually the future price will only represent the current price, plus this $3/bbl cost of storing crude for twelve months as this in effect means the marginal revenue will equate to the marginal cost, and cetris paribus, no further demand or supply will come through in either contract.
Unlike the calendar spread, the traditional difference in price between the WTI Nymex crude benchmark and the European Brent Crude benchmark, traded primarily on the Intercontinental Exchange (ICE), comes about because of the fundamental differences between the two crude oil products. Although both are classed as the higher quality ‘light sweet crude’ (high gravity, lower viscosity, low sulfur, primarily used in high end products such as gasoline), there are some mild difference between the two that result in WTI contracts, generally showing a premium of around a few dollars over the equivalent Brent contract.
Brent crude, unlike WTI, is actually a blend of light sweet crudes from fifteen different oil fields located across the North Sea, and because of this actually has a slightly higher sulfur content and a slightly lower API gravity, i.e. Although it is light sweet, it is not quite as light or as sweet as WTI (API Gravity 38.3 degrees versus 39.6 degrees for WTI, sulfur 0.37% versus 0.24% for WTI), and as such, sees slightly less demand and so is cheaper (generally speaking) than WTI.
This is not currently the case however, with the front Brent contract trading around $3/bbl higher than the WTI contract. Although one could consider this as an indication of a fundamental market shift in conditions surrounding the two benchmark types, if we take it in context of the widening contango in the WTI curve itself, it would seem to indicate more specific pressure at the front of the WTI curve. Indeed, if we compare the June 2011 (Jun11) Brent contract to the Jun11 WTI future, the Brent contract only trades around 30 cents higher than the WTI, in effect showing us that in the longer term, the fundamentals between the two benchmarks are expected to fall back to the norm.
So this brings about the question, what is currently bearish for the front of the US crude curve, while having a lesser impact on the broader crude oil market?
The primary reason for this over the past few weeks has been the continuing turmoil surrounding the Greek debt crisis, the potential for other European peripheral countries to go down the same path, and all the subsequent risk aversion and currency moves coming off the back of it. This has been impacting the front WTI contract in two predominant ways; firstly, the highly liquid and predominantly paper traded, WTI front contract has over the past year or so been showing a high correlation with the equity markets, traders in effect taking stock indices as an indicator of global recovery and potential future crude oil demand.
The Greek crisis has caused a widespread sell off in global stock markets amid fears that banks across the world may have exposure to the country’s sovereign debt, which Greece has the potential to default on. This increased risk aversion across the markets has caused a flight to safety for traders, with those holding speculative positions at the short end of the WTI Nymex curve, quickly closing positions. Coupled with the correlation between the front WTI contract and stock indices (The current Jun10 contract and the S&P 500 stock index show a correlation of 79%), the front of the curve has been seeing the brunt of the selling pressure.
Secondly, the Greek debt problems have naturally caused the euro to devalue against the US dollar. As Greece (and other periphery countries) looks set to have less foreign investment, lower GDP growth etc, the euro has been steadily losing ground during this crisis. A weaker euro has made the comparative cost of buying WTI contracts, priced in US dollars, more and more expensive for those traders based in Europe. This has caused demand to slacken in the near term and in turn, placed pressure at the front of the WTI curve.
While the further dated contracts have been following a similar price performance, it has been to a much lesser extent than the more immediate impact on the WTI Nymex Jun10 contract. Similarly, although Brent crude is also priced in US dollars, it is primarily traded within Europe and in Asia, and so the falling euro dollar has had far less impact (the generally weaker euro against Asian currencies is having some impact, but again to a lesser extent than for the US benchmark).
This divergence between near term and longer run fundamentals for crude oil has been the key weight in recent weeks as the Greek debt crisis continues to dominate news flow.
This isn’t to say there are not a myriad of other factors to consider, both for calendar spreads and the WTI – Brent spread. But the Greek crisis and subsequent moves in the stock markets and currencies markets have been the key driver behind the widening spread and the steepening of the WTI futures curve since the news surrounding Greece began to come to the forefront.
Whether or not this becomes a more systematic shift for crude oil products remains to be seen, however it is certain that until fears surrounding Greece and European peripheries begin to wane, the short end of the WTI Nymex crude curve has at least one hurdle to overcome on its road to recovery.
http://www.proactiveinvestors.co.uk/companies/news/16343/greek-crisis-and-its-relationship-to-the-widening-spread-in-wti-crude-16343.html
Yukon-Nevada Gold continues to improve upon its already successful stack test results
Investors like to see mining companies making progress with their drill programmes. It is equally important to recognise however, progress in relation to meeting environmental requirements, particularly if they are with provincial or state governments. Toronto and Frankfurt listed Yukon-Nevada Gold Corp. (TSX-V: YNG; Frankfurt: NG6) has been making remarkable progress with its environmental assessments in Nevada. Results from its most recent stack emission tests at the wholly owned subsidiary Queenstake Resources USA, Inc's Jerritt Canyon Gold Mine continue to improve well below the maximum levels specified in the Consent Decree entered into with the Nevada Division of Environmental Protection ("NDEP").
NDEP is a legal agreement which entails certain environmental milestones to be achieved by YNG. The company’s continued efforts to achieve these milestones not only confirm the management’s commitment to the project but also indicate the prospects of the project. One does not embark upon costly environmental assessments on projects which are less than economical.
The tests were carried out on the Jerritt Canyon gold treatment plant near Elko, Nevada under normal operating conditions by the independent stack testing group and have confirmed the capabilities, consistency and stability of the chosen control technology to improve stack test emissions at Jerritt Canyon. Since this programme commenced at the end of calendar year 2009 results have steadily improved to well below the required standards.
The Jerritt Canyon Mine is the flagship project of the company and is operated by a fully owned subsidiary, Queenstake Resources USA Ltd. The company continues its development efforts at the Jerritt Canyon Mine and recently announced excellent assay results from the remaining 2008 diamond and reverse circulation drilling. Drilling from surface and underground stations has continued to identify or extend gold mineralization beyond known resources.
Unlike many other exploration stories, YNG is a producing company. The Jerritt Canyon Mine has a current annual production of 50,000 oz. The company expects to ramp up production to 150,000 oz per annum in 2010. The increase is expected to be realised through infrastructure improvements, increased access to a larger percentage of the current reserve and through near mine exploration.
The latest stack test results from Jerritt Canyon, continue to show the effectiveness of the technology developed to limit mercury emissions. The mercury emissions from the stacks continue to fall and are now 11% of the levels permitted under the consent decree, and ultimate discharge improvements may not have been fully realized. Other contaminants such as SO(2) and particulate are also falling and are approximately 1% of the allowed limits.
Chief Operating Officer Graham Dickson, responsible for design, development, installation and commissioning of the patent pending technology at the Jerritt Canyon plant, stated that YNG will bring the same expertise, focus and energy to bear on all of its environmental tasks designed to deal with present operations and residual problems from past operations.
YNG recently raised $5 million private placement and is well financed. With improving gold fundamentals and its continued development efforts, markets are set to re-rate YNG.
About Yukon-Nevada Gold Corp
Yukon-Nevada Gold Corp. is a North American gold producer in the business of discovering, developing and operating gold deposits. The Company holds a diverse portfolio of gold, silver, zinc and copper properties in the Yukon Territory and British Columbia in Canada and in Nevada in the United States. The Company's focus has been on the acquisition and development of late stage development and operating properties with gold as the primary target. Continued growth will occur by increasing or initiating production from the Company's existing properties.
http://www.proactiveinvestors.com/companies/news/5793/yukon-nevada-gold-continues-to-improve-upon-its-already-successful-stack-test-results-5793.html
NDEP is a legal agreement which entails certain environmental milestones to be achieved by YNG. The company’s continued efforts to achieve these milestones not only confirm the management’s commitment to the project but also indicate the prospects of the project. One does not embark upon costly environmental assessments on projects which are less than economical.
The tests were carried out on the Jerritt Canyon gold treatment plant near Elko, Nevada under normal operating conditions by the independent stack testing group and have confirmed the capabilities, consistency and stability of the chosen control technology to improve stack test emissions at Jerritt Canyon. Since this programme commenced at the end of calendar year 2009 results have steadily improved to well below the required standards.
The Jerritt Canyon Mine is the flagship project of the company and is operated by a fully owned subsidiary, Queenstake Resources USA Ltd. The company continues its development efforts at the Jerritt Canyon Mine and recently announced excellent assay results from the remaining 2008 diamond and reverse circulation drilling. Drilling from surface and underground stations has continued to identify or extend gold mineralization beyond known resources.
Unlike many other exploration stories, YNG is a producing company. The Jerritt Canyon Mine has a current annual production of 50,000 oz. The company expects to ramp up production to 150,000 oz per annum in 2010. The increase is expected to be realised through infrastructure improvements, increased access to a larger percentage of the current reserve and through near mine exploration.
The latest stack test results from Jerritt Canyon, continue to show the effectiveness of the technology developed to limit mercury emissions. The mercury emissions from the stacks continue to fall and are now 11% of the levels permitted under the consent decree, and ultimate discharge improvements may not have been fully realized. Other contaminants such as SO(2) and particulate are also falling and are approximately 1% of the allowed limits.
Chief Operating Officer Graham Dickson, responsible for design, development, installation and commissioning of the patent pending technology at the Jerritt Canyon plant, stated that YNG will bring the same expertise, focus and energy to bear on all of its environmental tasks designed to deal with present operations and residual problems from past operations.
YNG recently raised $5 million private placement and is well financed. With improving gold fundamentals and its continued development efforts, markets are set to re-rate YNG.
About Yukon-Nevada Gold Corp
Yukon-Nevada Gold Corp. is a North American gold producer in the business of discovering, developing and operating gold deposits. The Company holds a diverse portfolio of gold, silver, zinc and copper properties in the Yukon Territory and British Columbia in Canada and in Nevada in the United States. The Company's focus has been on the acquisition and development of late stage development and operating properties with gold as the primary target. Continued growth will occur by increasing or initiating production from the Company's existing properties.
http://www.proactiveinvestors.com/companies/news/5793/yukon-nevada-gold-continues-to-improve-upon-its-already-successful-stack-test-results-5793.html
Peat Resources - Positive environmental implications
Canada in general and Ontario in particular have been champions of the development of clean energy sources. There are number of clean energy projects in the province from solar to wind power and the provincial government has been encouraging companies to embark on clean energy projects. Clean energy can also be generated through peat fired power plants and several European countries such as Finland and Ireland are currently burning peat as a clean alternative to coal.
Concerted efforts are underway in Canada as well, to use peat as an energy source. Scientists at Lakehead and McMaster Universities recently completed a research on the subject on the peatlands of northwestern Ontario. The research was carried out under the Atikokan Bioenergy Research Centre, funded by the Province of Ontario through the Ontario Centre for Excellence - Energy. Canadian Venture listed Peat Resources Limited (TSX.V: PET) was a contributing private sector partner to the programme.
Field studies were carried out in 2007-2009 near Upsala, about 130 km northwest of Thunder Bay, on peatlands held under permit by PET and were part of an investigation of the environmental effects of wet-harvesting peat as an alternative biomass energy source for the OPG Atikokan Generating Station. The research was directed by Dr. Peter Lee (wetland biologist, Lakehead University) and Dr. Mike Waddington (peatland specialist, McMaster University).
The project arrived at several important conclusions favouring peat harvesting and their use in power plants. PET intends to use wet harvesting which does not require pre-drainage of the peatland. Since the upper growing layer of the bog can be preserved and, after harvesting of the underlying fuel-grade peat, can be rehabilitated as part of a functioning wetland there is no environmental damage. In contrast, the dry harvesting method of peat production used in Europe and in horticultural peat operations elsewhere in Canada requires complete pre-drainage and clearing of the site causing significant environmental change.
The research has shown that the abundance and diversity of plant species in the rehabilitated harvested areas are comparable to those in adjacent natural areas. In fact, growth of sphagnum moss, the principal plant in these types of peatlands, was found to be enhanced in the rehabilitated zones.
Peatlands perform an important environmental function. In their natural state, peatlands are both emitters (methane) and absorbers (carbon dioxide) of greenhouse gases and are a net carbon source to the atmosphere. Removal of the fuel-grade peat, which PET expects to do, reduces the methane emissions and enhanced growth of the mosses in post-harvest areas increases the sequestration of carbon dioxide. Appropriate selection of harvesting sites can therefore result in a net reduction of greenhouse gas emissions thus making the project even more environmentally friendly.
Results of these investigations are relevant to the efforts of PET which is developing peat fuel pellets for power generation. The research confirms the minimal environmental impact of the production of this sustainable bioenergy resource. The results are also timely; the recent interest in mining developments in the Ring of Fire area of northern Ontario indicates a future need for large amounts of reasonably-priced power which the use of peat fuel can help to facilitate.
We have been following PET or some time and are encouraged by their commitment to the project and the progress they have so far made. The Company has identified large biomass resources of fuel-grade peat on its properties in Ontario and Newfoundland. The north-western Ontario property contains over 200 million tonnes, sufficient to supply OPG’s (Ontario Power Generation) northern generating stations for more than 20 years. In Newfoundland, permits cover about 130,000 hectares of productive peatlands.
Peat Resources
Peat Resources Limited was formed to explore, develop and produce high quality peat fuel for use in electricity generating stations and other facilities requiring a long-term assured supply of economically and environmentally attractive fuel. In response to market opportunities and in order to establish a strong resource base, the company has focussed its activities in the Canadian provinces of Ontario and Newfoundland and Labrador.
http://www.proactiveinvestors.com/companies/news/5792/peat-resources-positive-environmental-implications-5792.html
Concerted efforts are underway in Canada as well, to use peat as an energy source. Scientists at Lakehead and McMaster Universities recently completed a research on the subject on the peatlands of northwestern Ontario. The research was carried out under the Atikokan Bioenergy Research Centre, funded by the Province of Ontario through the Ontario Centre for Excellence - Energy. Canadian Venture listed Peat Resources Limited (TSX.V: PET) was a contributing private sector partner to the programme.
Field studies were carried out in 2007-2009 near Upsala, about 130 km northwest of Thunder Bay, on peatlands held under permit by PET and were part of an investigation of the environmental effects of wet-harvesting peat as an alternative biomass energy source for the OPG Atikokan Generating Station. The research was directed by Dr. Peter Lee (wetland biologist, Lakehead University) and Dr. Mike Waddington (peatland specialist, McMaster University).
The project arrived at several important conclusions favouring peat harvesting and their use in power plants. PET intends to use wet harvesting which does not require pre-drainage of the peatland. Since the upper growing layer of the bog can be preserved and, after harvesting of the underlying fuel-grade peat, can be rehabilitated as part of a functioning wetland there is no environmental damage. In contrast, the dry harvesting method of peat production used in Europe and in horticultural peat operations elsewhere in Canada requires complete pre-drainage and clearing of the site causing significant environmental change.
The research has shown that the abundance and diversity of plant species in the rehabilitated harvested areas are comparable to those in adjacent natural areas. In fact, growth of sphagnum moss, the principal plant in these types of peatlands, was found to be enhanced in the rehabilitated zones.
Peatlands perform an important environmental function. In their natural state, peatlands are both emitters (methane) and absorbers (carbon dioxide) of greenhouse gases and are a net carbon source to the atmosphere. Removal of the fuel-grade peat, which PET expects to do, reduces the methane emissions and enhanced growth of the mosses in post-harvest areas increases the sequestration of carbon dioxide. Appropriate selection of harvesting sites can therefore result in a net reduction of greenhouse gas emissions thus making the project even more environmentally friendly.
Results of these investigations are relevant to the efforts of PET which is developing peat fuel pellets for power generation. The research confirms the minimal environmental impact of the production of this sustainable bioenergy resource. The results are also timely; the recent interest in mining developments in the Ring of Fire area of northern Ontario indicates a future need for large amounts of reasonably-priced power which the use of peat fuel can help to facilitate.
We have been following PET or some time and are encouraged by their commitment to the project and the progress they have so far made. The Company has identified large biomass resources of fuel-grade peat on its properties in Ontario and Newfoundland. The north-western Ontario property contains over 200 million tonnes, sufficient to supply OPG’s (Ontario Power Generation) northern generating stations for more than 20 years. In Newfoundland, permits cover about 130,000 hectares of productive peatlands.
Peat Resources
Peat Resources Limited was formed to explore, develop and produce high quality peat fuel for use in electricity generating stations and other facilities requiring a long-term assured supply of economically and environmentally attractive fuel. In response to market opportunities and in order to establish a strong resource base, the company has focussed its activities in the Canadian provinces of Ontario and Newfoundland and Labrador.
http://www.proactiveinvestors.com/companies/news/5792/peat-resources-positive-environmental-implications-5792.html
Thursday, 6 May 2010
Global Uranium rises after technical report outlines potential of Anderson Uranium Property
Canadian listed, US focused uranium junior Global Uranium (TSX-V:GU) updated investor’s on progress at the Anderson Uranium Property in Arizona, which the company recently entered into an option and joint venture agreement with Concentric Energy to earn up to a 70% interest.
The Anderson Property covers 5,785 acres, and has already had almost 1,400 exploration drill holes, 1,300 downhole gamma surveys and nearly 6,000 chemical assays completed over the central portion of the property in the 1970’s.
Today Global Uranium released an independent measured and indicated resource estimate for the property based on the historical data. The estimate drew upon radiometric data, and as a result, grades in the estimate are express as a percent eU308 or %eU308 where “e” signifies the equivalent percentage of uranium by weight. Chemical assay data was not included directly in the calculation of tons or grade, but were used to corroborate radiometric data and compute disequilibrium factors that were used in the estimate, Global Uranium noted.
Based on the data compiled, the combined measured and indicated resource is 11.1 million pounds eU308, or 9.9 million tons at an average grade of 0.056% eU308 over 387 acres with an average thickness of 12 feet. (See Table 1.1 below). There is a further 5.6 million tons @ 0.051% eU308 (5.7 million pounds eU308) in the inferred category.
“The Mineral Resource estimates for the Anderson Property used a range of cut-off grades from 1.6 to 4.5 million pounds of measured eU3O8, 2.3 to 6.6 million pounds of indicated eU3O8 and 5.9 to 23.4 million pounds of inferred (MinEx and Urangesellschaft) eU3O8,” the company further added. “These estimates include total in-place, composite mineralization accumulated in all radiometric beds with a cutoff thickness of 0.5 feet (ft).”
The technical report also went on to discuss possible mining solutions for the property, noting that in the 1970’s MinEx and then Urangesellschaft believed the project was feasible as an open pit mine using low cost heap leach processing.
Beyond uranium, the project also hosts vanadium, which is associated with the uranium mineralization. An inferred vanadium resource has been estimated based on the ratio of vanadium to uranium of 1.05 as evident in 453 assayed samples from 14 cored holes and 850 samples from the confirmation drilling performed in 2006. (see table 2.1 below).
What next?
The report recommends a ‘concept-specific’ mineral resource estimate, i.e, one where the cut-off grade is certain and can be used to model the most optimal portion(s) of the mineralization for development. In order to complete the new estimate, a number of tasks are to be completed, including geological modeling, geostatistical drilling, metallurgical studies, conceptual mine plan and a uranium price study. Phase II of the work plan will involve adding drilling to both expand and upgrade the resource, and the completion of a pre-feasibility study.
http://www.proactiveinvestors.com/companies/news/5789/global-uranium-rises-after-technical-report-outlines-potential-of-anderson-uranium-property-5789.html
The Anderson Property covers 5,785 acres, and has already had almost 1,400 exploration drill holes, 1,300 downhole gamma surveys and nearly 6,000 chemical assays completed over the central portion of the property in the 1970’s.
Today Global Uranium released an independent measured and indicated resource estimate for the property based on the historical data. The estimate drew upon radiometric data, and as a result, grades in the estimate are express as a percent eU308 or %eU308 where “e” signifies the equivalent percentage of uranium by weight. Chemical assay data was not included directly in the calculation of tons or grade, but were used to corroborate radiometric data and compute disequilibrium factors that were used in the estimate, Global Uranium noted.
Based on the data compiled, the combined measured and indicated resource is 11.1 million pounds eU308, or 9.9 million tons at an average grade of 0.056% eU308 over 387 acres with an average thickness of 12 feet. (See Table 1.1 below). There is a further 5.6 million tons @ 0.051% eU308 (5.7 million pounds eU308) in the inferred category.
“The Mineral Resource estimates for the Anderson Property used a range of cut-off grades from 1.6 to 4.5 million pounds of measured eU3O8, 2.3 to 6.6 million pounds of indicated eU3O8 and 5.9 to 23.4 million pounds of inferred (MinEx and Urangesellschaft) eU3O8,” the company further added. “These estimates include total in-place, composite mineralization accumulated in all radiometric beds with a cutoff thickness of 0.5 feet (ft).”
The technical report also went on to discuss possible mining solutions for the property, noting that in the 1970’s MinEx and then Urangesellschaft believed the project was feasible as an open pit mine using low cost heap leach processing.
Beyond uranium, the project also hosts vanadium, which is associated with the uranium mineralization. An inferred vanadium resource has been estimated based on the ratio of vanadium to uranium of 1.05 as evident in 453 assayed samples from 14 cored holes and 850 samples from the confirmation drilling performed in 2006. (see table 2.1 below).
What next?
The report recommends a ‘concept-specific’ mineral resource estimate, i.e, one where the cut-off grade is certain and can be used to model the most optimal portion(s) of the mineralization for development. In order to complete the new estimate, a number of tasks are to be completed, including geological modeling, geostatistical drilling, metallurgical studies, conceptual mine plan and a uranium price study. Phase II of the work plan will involve adding drilling to both expand and upgrade the resource, and the completion of a pre-feasibility study.
http://www.proactiveinvestors.com/companies/news/5789/global-uranium-rises-after-technical-report-outlines-potential-of-anderson-uranium-property-5789.html
Gold returns to $1,170 as Greeks protest new austerity measures, markets keep falling
Gold prices are aiming for a return to the new 2010 high of US$1,192/oz that was set yesterday before the yellow metal slipped below US$1,170/oz after failing to find enough support to test US$1,200/oz plateau it reached in late 2009.
Gold is increasingly seen as a safe-haven asset by investors amid rising volatility in currency and stock markets, which are heavily impacted by the ongoing European debt crisis. In the latest development, Greece agreed to massive budget cuts that will amount to €30 billion over the next three years on top of the economic austerity measures already implemented in order to secure a €110 billion bailout from the European Union and International Monetary Fund (IMF). Germany, which will account for the bulk of the financial aid package, said it would not provide any funds for Greece unless it passes economic reforms to keep its soaring budget deficit under control, forcing the country to radically cut spending.
The EU’s stats agency Eurostat has recently revised Greece’s 2009 deficit to 13.6% of the GDP from the previous estimate of 12.9%. The county is aiming to bring the deficit within the EU’s cap of 3% by 2014.
Greece’s fiscal crisis has been weighing on the euro for months to weaken it against the US dollar and limit gains in gold, which is seen as an alternative investment to the greenback and usually moves inversely to the American currency. However, gold has lately defied this trend, coming close to topping all time highs on safe-haven buying. The FTSE 100 shed a further 1% today after declining 2.6% on Tuesday, while the Dow Jones Industrial Average is also projected to extend yesterday's 2% loss.
Gold has returned to US$1,170/oz, while silver and platinum declined to US$17.51/oz and US$1,649/oz respectively.
All major mining stocks declined with the sole exception of silver miner Fresnillo (LSE: FRES), which advanced 1.6%. Randgold Resources (LSE: RRS) shed less than 1%, while platinum miner Lonmin (LSE: LMI) declined 3.7%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved down 3.7%.
Silver producer Hochschild Mining (LSE: HOC) lost 5.3%, while fellow midcaps gold miner Petropavlovsk (LSE: POG) and Aquarius Platinum (LSE: AQP) pulled back 4.7% and 3.9% respectively.
Africa operating gold and platinum miner Goldplat (AIM: GDP), Russia operating Ovoca Gold (AIM: OVG) and Africa focused gold miner Pan African Resources (AIM: PAF) moved with the sector, sliding 6%. South American based explorer Mariana Resources (AIM: MARL), which today announced a new set of positive drilling results, and Western Australia operating Norseman Gold (AIM: NGL) lost more than 5%.
http://www.proactiveinvestors.co.uk/companies/news/16286/gold-returns-to-1170-as-greeks-protest-new-austerity-measures-markets-keep-falling-16286.html
Gold is increasingly seen as a safe-haven asset by investors amid rising volatility in currency and stock markets, which are heavily impacted by the ongoing European debt crisis. In the latest development, Greece agreed to massive budget cuts that will amount to €30 billion over the next three years on top of the economic austerity measures already implemented in order to secure a €110 billion bailout from the European Union and International Monetary Fund (IMF). Germany, which will account for the bulk of the financial aid package, said it would not provide any funds for Greece unless it passes economic reforms to keep its soaring budget deficit under control, forcing the country to radically cut spending.
The EU’s stats agency Eurostat has recently revised Greece’s 2009 deficit to 13.6% of the GDP from the previous estimate of 12.9%. The county is aiming to bring the deficit within the EU’s cap of 3% by 2014.
Greece’s fiscal crisis has been weighing on the euro for months to weaken it against the US dollar and limit gains in gold, which is seen as an alternative investment to the greenback and usually moves inversely to the American currency. However, gold has lately defied this trend, coming close to topping all time highs on safe-haven buying. The FTSE 100 shed a further 1% today after declining 2.6% on Tuesday, while the Dow Jones Industrial Average is also projected to extend yesterday's 2% loss.
Gold has returned to US$1,170/oz, while silver and platinum declined to US$17.51/oz and US$1,649/oz respectively.
All major mining stocks declined with the sole exception of silver miner Fresnillo (LSE: FRES), which advanced 1.6%. Randgold Resources (LSE: RRS) shed less than 1%, while platinum miner Lonmin (LSE: LMI) declined 3.7%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved down 3.7%.
Silver producer Hochschild Mining (LSE: HOC) lost 5.3%, while fellow midcaps gold miner Petropavlovsk (LSE: POG) and Aquarius Platinum (LSE: AQP) pulled back 4.7% and 3.9% respectively.
Africa operating gold and platinum miner Goldplat (AIM: GDP), Russia operating Ovoca Gold (AIM: OVG) and Africa focused gold miner Pan African Resources (AIM: PAF) moved with the sector, sliding 6%. South American based explorer Mariana Resources (AIM: MARL), which today announced a new set of positive drilling results, and Western Australia operating Norseman Gold (AIM: NGL) lost more than 5%.
http://www.proactiveinvestors.co.uk/companies/news/16286/gold-returns-to-1170-as-greeks-protest-new-austerity-measures-markets-keep-falling-16286.html
FTSE 100 plunges as miners, energy stocks, banks and insurers tumble
Overview: the FTSE 100 extended Tuesday’s losses, shedding a further 1.3% to drop to just over 5,300 as metals and oil prices continued falling, dragging down miners and oil & gas stocks.
Just three FTSE 100 constituents gains more than 1%. Silver producer Fresnillo (LSE: FRES), miner BHP Billiton (LSE: BLT) and oil and gas supermajor BP (LSE: BP) accomplished the feat, rising 2.6%, 1.4% and 1.2% respectively.
Copper miner Kazakhmys (LSE: KAZ) was at the bottom with a 5% decline. Hospitality company Whitbread (LSE: WTB) followed, sliding 4%. Supermarket chain Morrison’s (LSE: MRW), power generation company International Power (LSE: IPR) and asset management firm Schroders (LSE: SDR) lost slightly more than 3%.
US markets were in decline in early trade. The Dow Jones Industrial Average lost 0.5%, the broader S&P 500 index retreated 0.6% and the technology heavy NASDAQ composite lost 0.95%.
Commodities
Oil prices retreated under pressure from plummeting equity markets and later got another hit from an inventories report released by the American Petroleum Institute (API), which revealed a higher than expected increase in US crude stockpiles. API said that inventories added nearly 3 million barrels last week, signalling weaker demand. Gasoline stocks and distillates, which include diesel and heating oil, were up by 1.84 million barrels and 1.3 million barrels respectively.
A more closely watched report from Energy Information Administration (EIA) is due out today.
BP's (LSE: BP) ongoing oil spill disaster in the Gulf of Mexico, where oil is on course to reach the coast of Louisiana, has triggered concerns about a possible decline in oil supplies and restrictions on offshore drilling in the US, though recent inventories reports have shown otherwise.
June Brent Crude dropped to US$83.65/barrel, while US light, sweet crude fell to US$81.12/barrel.
Blue chip oil and gas producers were in decline. BP (LSE: BP) went against the tide, posting a small gain after suffering heavy losses over the past week on the Gulf of Mexico oil spill disaster. Fellow supermajor Shell (LSE: RDSB) lost 3.3%, as did Tullow Oil (LSE: TLW). Cairn Energy (LSE: CNE) moved down 2.6% and BG Group (LSE: BG) declined 1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) slipped 1.3% and 2.5% respectively.
JKX Oil & Gas (LSE: JKX) was the heaviest faller among the midcaps with a 5.2% decline. Dragon Oil (LSE: DGO) and Salamander Energy (LSE: SMDR) were down 3.2%, Dana Petroleum (LSE: DNX) dropped 2.8%, Premier Oil (LSE: PMO) slid 2.3% and Heritage Oil (LSE: HOIL) posted a small loss, as did Soco International (LSE: SIA).
Services companies Wellstream Holdings (LSE: WSM) and Wood Group (LSE: WG) lost 2.5% and 1.3% respectively.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) went against the tide with a gain of nearly 7%.
Most other juniors were in decline. Europe focused oil and gas developer Ascent Resources (AIM: AST) and Aminex (AIM: AEX) lost about 8%, Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) declined 7%, Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG), North American based explorer Nighthawk Energy (AIM: HAWK) and Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) all lost more than 6%. Western Europe operating oil and gas company Northern Petroleum (AIM: NOP), Mongolia-focused Petro Matad Ltd (AIM: MATD) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT), which today updated investors on its operations in Ukraine, shed over 5%.
Gold steady at $1,170
Gold prices are aiming for a return to the new 2010 high of US$1,192/oz that was set yesterday before the yellow metal slipped below US$1,170/oz after failing to find enough support to test US$1,200/oz plateau it reached in late 2009.
Gold is increasingly seen as a safe-haven asset by investors amid rising volatility in currency and stock markets, which are heavily impacted by the ongoing European debt crisis. In the latest development, Greece agreed to massive budget cuts that will amount to €30 billion over the next three years on top of the economic austerity measures already implemented in order to secure a €110 billion bailout from the European Union and International Monetary Fund (IMF). Germany, which will account for the bulk of the financial aid package, said it would not provide any funds for Greece unless it passes economic reforms to keep its soaring budget deficit under control, forcing the country to radically cut spending.
Mass protests against the new austerity measures broke out in Greece today, leaving at least three people dead.
Gold has returned to US$1,170/oz, while silver and platinum declined to US$17.51/oz and US$1,649/oz respectively.
All major mining stocks declined with the sole exception of silver miner Fresnillo (LSE: FRES), which advanced 1.6%. Randgold Resources (LSE: RRS) shed less than 1%, while platinum miner Lonmin (LSE: LMI) declined 3.7%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved down 3.7%.
Silver producer Hochschild Mining (LSE: HOC) lost 5.3%, while fellow midcaps gold miner Petropavlovsk (LSE: POG) and Aquarius Platinum (LSE: AQP) pulled back 4.7% and 3.9% respectively.
Africa operating gold and platinum miner Goldplat (AIM: GDP), Russia operating Ovoca Gold (AIM: OVG) and Africa focused gold miner Pan African Resources (AIM: PAF) moved with the sector, sliding 6%. South American based explorer Mariana Resources (AIM: MARL), which today announced a new set of positive drilling results, and Western Australia operating Norseman Gold (AIM: NGL) lost more than 5%.
Base metals plummet to weaken miners
Base metals fell sharply today with copper and nickel declining to US$3.01/lb and US$9.50/lb, while zinc fell to US$0.89/lb.
All mining stocks were in decline today except for the world’s largest miner BHP Billiton (LSE: BLT), which added 1.1%. Rio Tinto (LSE: RIO) was flat and Vedanta Resources (LSE: VED) posted a marginal loss. Eurasian Natural Resources (LSE: ENRC) and Anglo American (LSE: AAL) lost 1.3% and 1.9% respectively. Antofagasta (LSE: ANTO) and Xstrata (LSE: XTA) dropped about 3%, while Kazakhmys (LSE: KAZ) shed 5.6% to slide to the bottom of the pile.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, shedding 7.6%.
Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) declined 13.5%, while Australia focused coking coal producer Caledon Resources (AIM: CDN) and Laterite nickel specialist European Nickel (AIM: ENK) followed with losses of 8.5%. Finders Resources (AIM: FIND) and Mineral sands producer Kenmare Resources (LSE: KMR) declined 6.5% and 6% respectively. Forte Energy (AIM: FTE) was down 5.2%.
Banks, insurance, private equity
Standard Chartered (LSE: STAN) was at the bottom of the banking sector with a 3.2% decline. Barclays (LSE: BARC) and HSBC (LSE: HSBA) dropped 1.9% and 1.1% respectively. Royal Bank of Scotland (LSE: RBS) posted a marginal loss, while fellow part-nationalised bank Lloyds (LSE: LLOY) shed 2.3%.
Insurance companies followed the market trend. Prudential (LSE: PRU) retreated 2%, Admiral Group (LSE: ADM), Aviva (LSE: AV), Legal & General (LSE: LGEN) and Standard Life (LSE: SL) lost nearly 1.5%. RSA Insurance Group (LSE: RSA) declined 1.2%. Old Mutual (LSE: OML) managed to stay at the opening level.
Private equity group 3i (LSE: III) lost nearly 3%.
Small Cap Movers
Other notable movers among the small caps included IP commercialisation company Amphion Innovations (AIM: AMP), which slipped 17% and emerging speciality pharmaceutical company Alliance Pharma (AIM: APH) with a 5.2% loss.
Small Cap News
Medusa Mining (ASX/AIM: MML; TSX: MLL) has found a new porphyry copper-gold target named Usa at its Philippines Co-O Mine.
Petroceltic International (AIM: PCI) has appointed Dr Robert Arnott as the company’s new non-executive chairman. Arnott joined the board in January this year as a senior non-executive director, and is now succeeding Andrew Bostock as chairman. Bostock will continue to serve as a senior non-executive director of Petroceltic.
Minera IRL (AIM, BVL: MIRL, TSX: IRL) said its pre-feasibility study for the Ollachea gold project in Peru is on track for its scheduled completion in the first quarter of 2011. Also, the company has decided to extend the on-going in-fill drilling program.
Oxford Nutrascience (AIM: ONG) said its subsidiary Oxford Nutrascience Ltd (ONL) achieved a 27% increase in full-year revenues and a number of post-period developments including manufacturing and development deals for its Chewitab chewable tablets and the submission of patent applications.
In a letter to shareholders, Victoria Oil & Gas (AIM: VOG) chairman Kevin Foo reflected on what he described as the most important six months in the company’s history. In relation to the company’s flagship Logbaba on-shore gas project in Cameroon, Foo said that Victoria has "overcome some incredible challenges involving technical, operational and financing issues".
Sunrise Diamonds (AIM:SDS) will soon have a new name to better reflect the company’s diversification in 2009 and 2010 from diamonds to an array of projects in Australia, Ireland and as of today, Canada.
South America based explorer Mariana Resources (AIM: MARL) said the results from the first seven holes of the 2010 drilling campaign at its Los Calandrias project in Argentina were positive and continued demonstrating wide intersections of gold and silver mineralisation, indicating bulk tonnage potential.
British Coal Bed Methane (CBM) gas specialist IGas Energy (AIM: IGAS) has now been operating itspilot CBM gas production for more than a year, a first for a UK CBM project. The company reported its full-year results for the twelve months ended 31 December 2009, in which the pilot gas production generated revenues of £828,000.
Ukraine focused gas producer Regal Petroleum (AIM: RPT) said that an independent assessment of its reserves in Ukraine commissioned earlier this year and received by the company this week was consistent with its development plan for the B-sands reservoirs, allocating 102.4 mmboe (million of barrels of oil equivalent) to an additional 'remaining possible' category and a further 151.9 mmboe to 'unrisked (P50) prospective resources' to the remaining proved & probable reserves volume of 151.3 mmboe.
London-based stockbroker Astaire Securities has initiated coverage on low-cost chromite producer Chromex Mining (AIM: CHX). The broker highlighted that its investment case is predicated on continued global demand for stainless steel, underpinned by strong Chinese demand growth. Astaire noted that in addition to Chromex’ producing Stellite mine on the Western Limb of the Bushveld complex in South Africa, the company also has a portfolio of near-production assets.
Telit Communications (AIM: TCM) has won a new order with German car manufacturer Audi, to equip the new Audi A8 with Telit’s UMTS/HSDPA-based broadband communications modules. The modules will be utilised in the new, third-generation “MMI Navigation plus” infotainment system.
http://www.proactiveinvestors.co.uk/companies/news/16293/ftse-100-plunges-as-miners-energy-stocks-banks-and-insurers-tumble-16293.html
Just three FTSE 100 constituents gains more than 1%. Silver producer Fresnillo (LSE: FRES), miner BHP Billiton (LSE: BLT) and oil and gas supermajor BP (LSE: BP) accomplished the feat, rising 2.6%, 1.4% and 1.2% respectively.
Copper miner Kazakhmys (LSE: KAZ) was at the bottom with a 5% decline. Hospitality company Whitbread (LSE: WTB) followed, sliding 4%. Supermarket chain Morrison’s (LSE: MRW), power generation company International Power (LSE: IPR) and asset management firm Schroders (LSE: SDR) lost slightly more than 3%.
US markets were in decline in early trade. The Dow Jones Industrial Average lost 0.5%, the broader S&P 500 index retreated 0.6% and the technology heavy NASDAQ composite lost 0.95%.
Commodities
Oil prices retreated under pressure from plummeting equity markets and later got another hit from an inventories report released by the American Petroleum Institute (API), which revealed a higher than expected increase in US crude stockpiles. API said that inventories added nearly 3 million barrels last week, signalling weaker demand. Gasoline stocks and distillates, which include diesel and heating oil, were up by 1.84 million barrels and 1.3 million barrels respectively.
A more closely watched report from Energy Information Administration (EIA) is due out today.
BP's (LSE: BP) ongoing oil spill disaster in the Gulf of Mexico, where oil is on course to reach the coast of Louisiana, has triggered concerns about a possible decline in oil supplies and restrictions on offshore drilling in the US, though recent inventories reports have shown otherwise.
June Brent Crude dropped to US$83.65/barrel, while US light, sweet crude fell to US$81.12/barrel.
Blue chip oil and gas producers were in decline. BP (LSE: BP) went against the tide, posting a small gain after suffering heavy losses over the past week on the Gulf of Mexico oil spill disaster. Fellow supermajor Shell (LSE: RDSB) lost 3.3%, as did Tullow Oil (LSE: TLW). Cairn Energy (LSE: CNE) moved down 2.6% and BG Group (LSE: BG) declined 1%.
Oil and gas engineering firms Amec (LSE: AMEC) and Petrofac (LSE: PFC) slipped 1.3% and 2.5% respectively.
JKX Oil & Gas (LSE: JKX) was the heaviest faller among the midcaps with a 5.2% decline. Dragon Oil (LSE: DGO) and Salamander Energy (LSE: SMDR) were down 3.2%, Dana Petroleum (LSE: DNX) dropped 2.8%, Premier Oil (LSE: PMO) slid 2.3% and Heritage Oil (LSE: HOIL) posted a small loss, as did Soco International (LSE: SIA).
Services companies Wellstream Holdings (LSE: WSM) and Wood Group (LSE: WG) lost 2.5% and 1.3% respectively.
Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) went against the tide with a gain of nearly 7%.
Most other juniors were in decline. Europe focused oil and gas developer Ascent Resources (AIM: AST) and Aminex (AIM: AEX) lost about 8%, Eastern Europe focused junior Aurelian Oil & Gas (AIM: AUL) declined 7%, Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG), North American based explorer Nighthawk Energy (AIM: HAWK) and Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) all lost more than 6%. Western Europe operating oil and gas company Northern Petroleum (AIM: NOP), Mongolia-focused Petro Matad Ltd (AIM: MATD) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT), which today updated investors on its operations in Ukraine, shed over 5%.
Gold steady at $1,170
Gold prices are aiming for a return to the new 2010 high of US$1,192/oz that was set yesterday before the yellow metal slipped below US$1,170/oz after failing to find enough support to test US$1,200/oz plateau it reached in late 2009.
Gold is increasingly seen as a safe-haven asset by investors amid rising volatility in currency and stock markets, which are heavily impacted by the ongoing European debt crisis. In the latest development, Greece agreed to massive budget cuts that will amount to €30 billion over the next three years on top of the economic austerity measures already implemented in order to secure a €110 billion bailout from the European Union and International Monetary Fund (IMF). Germany, which will account for the bulk of the financial aid package, said it would not provide any funds for Greece unless it passes economic reforms to keep its soaring budget deficit under control, forcing the country to radically cut spending.
Mass protests against the new austerity measures broke out in Greece today, leaving at least three people dead.
Gold has returned to US$1,170/oz, while silver and platinum declined to US$17.51/oz and US$1,649/oz respectively.
All major mining stocks declined with the sole exception of silver miner Fresnillo (LSE: FRES), which advanced 1.6%. Randgold Resources (LSE: RRS) shed less than 1%, while platinum miner Lonmin (LSE: LMI) declined 3.7%.
Specialty chemicals firm Johnson Matthey (LSE: JMAT) moved down 3.7%.
Silver producer Hochschild Mining (LSE: HOC) lost 5.3%, while fellow midcaps gold miner Petropavlovsk (LSE: POG) and Aquarius Platinum (LSE: AQP) pulled back 4.7% and 3.9% respectively.
Africa operating gold and platinum miner Goldplat (AIM: GDP), Russia operating Ovoca Gold (AIM: OVG) and Africa focused gold miner Pan African Resources (AIM: PAF) moved with the sector, sliding 6%. South American based explorer Mariana Resources (AIM: MARL), which today announced a new set of positive drilling results, and Western Australia operating Norseman Gold (AIM: NGL) lost more than 5%.
Base metals plummet to weaken miners
Base metals fell sharply today with copper and nickel declining to US$3.01/lb and US$9.50/lb, while zinc fell to US$0.89/lb.
All mining stocks were in decline today except for the world’s largest miner BHP Billiton (LSE: BLT), which added 1.1%. Rio Tinto (LSE: RIO) was flat and Vedanta Resources (LSE: VED) posted a marginal loss. Eurasian Natural Resources (LSE: ENRC) and Anglo American (LSE: AAL) lost 1.3% and 1.9% respectively. Antofagasta (LSE: ANTO) and Xstrata (LSE: XTA) dropped about 3%, while Kazakhmys (LSE: KAZ) shed 5.6% to slide to the bottom of the pile.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) moved with the market, shedding 7.6%.
Philippines operating nickel miner Rusina Mining (ASX: RML; AIM: RMLA) declined 13.5%, while Australia focused coking coal producer Caledon Resources (AIM: CDN) and Laterite nickel specialist European Nickel (AIM: ENK) followed with losses of 8.5%. Finders Resources (AIM: FIND) and Mineral sands producer Kenmare Resources (LSE: KMR) declined 6.5% and 6% respectively. Forte Energy (AIM: FTE) was down 5.2%.
Banks, insurance, private equity
Standard Chartered (LSE: STAN) was at the bottom of the banking sector with a 3.2% decline. Barclays (LSE: BARC) and HSBC (LSE: HSBA) dropped 1.9% and 1.1% respectively. Royal Bank of Scotland (LSE: RBS) posted a marginal loss, while fellow part-nationalised bank Lloyds (LSE: LLOY) shed 2.3%.
Insurance companies followed the market trend. Prudential (LSE: PRU) retreated 2%, Admiral Group (LSE: ADM), Aviva (LSE: AV), Legal & General (LSE: LGEN) and Standard Life (LSE: SL) lost nearly 1.5%. RSA Insurance Group (LSE: RSA) declined 1.2%. Old Mutual (LSE: OML) managed to stay at the opening level.
Private equity group 3i (LSE: III) lost nearly 3%.
Small Cap Movers
Other notable movers among the small caps included IP commercialisation company Amphion Innovations (AIM: AMP), which slipped 17% and emerging speciality pharmaceutical company Alliance Pharma (AIM: APH) with a 5.2% loss.
Small Cap News
Medusa Mining (ASX/AIM: MML; TSX: MLL) has found a new porphyry copper-gold target named Usa at its Philippines Co-O Mine.
Petroceltic International (AIM: PCI) has appointed Dr Robert Arnott as the company’s new non-executive chairman. Arnott joined the board in January this year as a senior non-executive director, and is now succeeding Andrew Bostock as chairman. Bostock will continue to serve as a senior non-executive director of Petroceltic.
Minera IRL (AIM, BVL: MIRL, TSX: IRL) said its pre-feasibility study for the Ollachea gold project in Peru is on track for its scheduled completion in the first quarter of 2011. Also, the company has decided to extend the on-going in-fill drilling program.
Oxford Nutrascience (AIM: ONG) said its subsidiary Oxford Nutrascience Ltd (ONL) achieved a 27% increase in full-year revenues and a number of post-period developments including manufacturing and development deals for its Chewitab chewable tablets and the submission of patent applications.
In a letter to shareholders, Victoria Oil & Gas (AIM: VOG) chairman Kevin Foo reflected on what he described as the most important six months in the company’s history. In relation to the company’s flagship Logbaba on-shore gas project in Cameroon, Foo said that Victoria has "overcome some incredible challenges involving technical, operational and financing issues".
Sunrise Diamonds (AIM:SDS) will soon have a new name to better reflect the company’s diversification in 2009 and 2010 from diamonds to an array of projects in Australia, Ireland and as of today, Canada.
South America based explorer Mariana Resources (AIM: MARL) said the results from the first seven holes of the 2010 drilling campaign at its Los Calandrias project in Argentina were positive and continued demonstrating wide intersections of gold and silver mineralisation, indicating bulk tonnage potential.
British Coal Bed Methane (CBM) gas specialist IGas Energy (AIM: IGAS) has now been operating itspilot CBM gas production for more than a year, a first for a UK CBM project. The company reported its full-year results for the twelve months ended 31 December 2009, in which the pilot gas production generated revenues of £828,000.
Ukraine focused gas producer Regal Petroleum (AIM: RPT) said that an independent assessment of its reserves in Ukraine commissioned earlier this year and received by the company this week was consistent with its development plan for the B-sands reservoirs, allocating 102.4 mmboe (million of barrels of oil equivalent) to an additional 'remaining possible' category and a further 151.9 mmboe to 'unrisked (P50) prospective resources' to the remaining proved & probable reserves volume of 151.3 mmboe.
London-based stockbroker Astaire Securities has initiated coverage on low-cost chromite producer Chromex Mining (AIM: CHX). The broker highlighted that its investment case is predicated on continued global demand for stainless steel, underpinned by strong Chinese demand growth. Astaire noted that in addition to Chromex’ producing Stellite mine on the Western Limb of the Bushveld complex in South Africa, the company also has a portfolio of near-production assets.
Telit Communications (AIM: TCM) has won a new order with German car manufacturer Audi, to equip the new Audi A8 with Telit’s UMTS/HSDPA-based broadband communications modules. The modules will be utilised in the new, third-generation “MMI Navigation plus” infotainment system.
http://www.proactiveinvestors.co.uk/companies/news/16293/ftse-100-plunges-as-miners-energy-stocks-banks-and-insurers-tumble-16293.html
DiamondCorp appoints Keith McCulloch as general manager to oversee Lace mine development
DiamondCorp (AIM: DCP, JSE: DMC) said it has strengthened its management team with the appointment of Keith McCulloch as general manager of the Lace mine in South Africa. McCulloch’s primary responsibility will be the implementation of the decline and mine development plan designed by Snowden Mining Industry Consultants.
Previously, the company said that the decline will be used for the initial haulage of kimberlite from below the sub-240m level. Kimberlite will be used for bulk testing purposes and for the implementation of the sub-level caving mine plan.
Production at Lace is scheduled to increase to 1.2 million tonnes per annum once the existing 6x2.7m vertical shaft is re-equipped during 2011 for primary ore hoisting. Subsequently the decline will then be utilised for men, materials and ventilation for the remainder of the +25-year life of the mine.
DiamondCorp noted that McCulloch is a highly experienced mining engineer with almost 30 years experience in underground and opencast mining operations in South Africa, Zimbabwe and Swaziland, predominantly in the diamond sector.
Last month, after the successful completion of an earlier £7.1 million placing, DiamondCorp resumed the development of the Lace diamond mine, located in the Free State Province of South Africa. “Following one of the most difficult years on record for the diamond sector, we have been able to keep the 1.2 million tonne per annum recovery plant and full underground mining fleet in place and in good working order”, DiamondCorp MD & CEO Paul Loudon commented.
“We look forward to accessing the potential 13 million carats in resource at Lace in early 2011, and building up to a potential production of between 400,000 and 500,000 carats per annum at the same time as the long-term metrics for the diamond industry continue to improve.”
Elsewhere, DiamondCorp is earning a 77.5% interest in various exploration licenses in Botswana from Geoperspectives Pty, by funding exploration activities. Last month, the company said that preparations are being finalised for the start of a six-hole diamond drilling program on two kimberlite targets – J-05 and J-12.
Diamondcorp highlighted that the J-05 and J-12 kimberlite targets are located approximately 5.5km southeast of De Beers Jwaneng mine, which it noted was the world’s richest diamond mine measured by value.
The 2010 program follows the successful delineation of a 10 hectare diamondiferous kimberlite J-01 during the an initial drilling program in late 2009.
Broker Fairfax mentioned DiamondCorp in its 'Daily Market report', noting McCulloch's appointment. "That a senior experienced GM has joined the team is a vote of confidence in the Lace project and should help reassure investors over concerns over development risk for Lace."
There is considerable relevant experience within the management team that should ensure that operational risk is minimised. As developments progress with the decline then a lower discount rate on the project will be appropriate, Fairfax added.
http://www.proactiveinvestors.co.uk/companies/news/16283/diamondcorp-appoints-keith-mcculloch-as-general-manager-to-oversee-lace-mine-development-16283.html
Previously, the company said that the decline will be used for the initial haulage of kimberlite from below the sub-240m level. Kimberlite will be used for bulk testing purposes and for the implementation of the sub-level caving mine plan.
Production at Lace is scheduled to increase to 1.2 million tonnes per annum once the existing 6x2.7m vertical shaft is re-equipped during 2011 for primary ore hoisting. Subsequently the decline will then be utilised for men, materials and ventilation for the remainder of the +25-year life of the mine.
DiamondCorp noted that McCulloch is a highly experienced mining engineer with almost 30 years experience in underground and opencast mining operations in South Africa, Zimbabwe and Swaziland, predominantly in the diamond sector.
Last month, after the successful completion of an earlier £7.1 million placing, DiamondCorp resumed the development of the Lace diamond mine, located in the Free State Province of South Africa. “Following one of the most difficult years on record for the diamond sector, we have been able to keep the 1.2 million tonne per annum recovery plant and full underground mining fleet in place and in good working order”, DiamondCorp MD & CEO Paul Loudon commented.
“We look forward to accessing the potential 13 million carats in resource at Lace in early 2011, and building up to a potential production of between 400,000 and 500,000 carats per annum at the same time as the long-term metrics for the diamond industry continue to improve.”
Elsewhere, DiamondCorp is earning a 77.5% interest in various exploration licenses in Botswana from Geoperspectives Pty, by funding exploration activities. Last month, the company said that preparations are being finalised for the start of a six-hole diamond drilling program on two kimberlite targets – J-05 and J-12.
Diamondcorp highlighted that the J-05 and J-12 kimberlite targets are located approximately 5.5km southeast of De Beers Jwaneng mine, which it noted was the world’s richest diamond mine measured by value.
The 2010 program follows the successful delineation of a 10 hectare diamondiferous kimberlite J-01 during the an initial drilling program in late 2009.
Broker Fairfax mentioned DiamondCorp in its 'Daily Market report', noting McCulloch's appointment. "That a senior experienced GM has joined the team is a vote of confidence in the Lace project and should help reassure investors over concerns over development risk for Lace."
There is considerable relevant experience within the management team that should ensure that operational risk is minimised. As developments progress with the decline then a lower discount rate on the project will be appropriate, Fairfax added.
http://www.proactiveinvestors.co.uk/companies/news/16283/diamondcorp-appoints-keith-mcculloch-as-general-manager-to-oversee-lace-mine-development-16283.html
Leni Gas & Oil lifted by news of Spain production off-take deal with BP
A big vote of confidence for Leni Gas & Oil PLC (AIM: LGO): the group announced completion of a heads of agreement with BP’s (LSE: BP) Spanish unit to negotiate a crude oil sales agreement to offtake its current and future Spain production to BP's Castellón refinery on the east coast of the country.
Investors liked the news, sending the stock up 13.3 percent in early deals.
The heads of agreement sets out the non-binding obligations and parameters for a proposed crude oil sales agreement to offtake the majority of the company's Spain crude production to BP Castellón and how the parties will work together with a view to consummating the proposal.
The planned agreement is for at least five years and shall include the currently producing 100 percent owned Ayoluengo oilfield and future production from other development assets across LGO’s petroleum production and exploration acreage in northern Spain which covers an area of over 550 square kilometres.
According to the company website, Ayoluengo is the largest Spanish onshore oilfield with mean STOIIP (Stock Tank Oil Initially In Place) of 104 million barrels (mmbbls). It had historical production of 17 mmbbls of 37 API oil. LGO is currently producing 130 barrels of oil per day and has initiated a major secondary recovery program to increase recovery and lift production above 1,000 bpd and identify in-fill drilling targets.
The delivery schedule regarding the BP Espana offtake is expected to be steadily increased in parallel with the development programs of LGO to increase production from all of the current and future production assets in Spain. The delivery pricing shall be at a premium to current pricing and shall be formula driven based primarily on spot commodity price index and the crude oil specification from the various producing assets.
Both companies are currently undertaking feasibility studies to engineer the facilities upgrades required to commence crude oil offtake in the fourth quarter of 2010.
Chairman David Lenigas said: “The potential tenure of this agreement provides LGO with long term revenue security in Spain, and shall allow us to accelerate the financing and development of both current and future producing assets in Spain. The completion of the long term offtake agreement with BP will be a milestone for the company, which shall underpin the value of LGO's Spain assets and compliment our development plans to accelerate multiple production assets."
"Work is near completion on updating the total Spain resources and exploitation plan subsequent to a comprehensive geological re-interpretation of our acreage using new seismic re-processing. The re-interpretation has identified additional hydrocarbon formations in the Lower Jurassic in addition to our existing production formations in the Lower Cretaceous and Upper Jurassic," he added."
In March, LGO announced its decision to divest its Hungarian assets, considered non-core as a result of the on-going reserves and resource review. It held a 14.54% stake in ZalaGasCo Kft and 7.27% of PetroHungaria Kft. The group and its advisers concluded neither venture will provide a material return on the company's Hungary investment of €2m. The company had therefore decided to relinquish its interest in both ZalaGasCo and PetroHungaria, and write off the Hungary investment.
Subsequently, the emerging resource company has assets in Spain, the Gulf of Mexico, Trinidad and Malta. It holds 100% of the Ayoluengo field through its wholly owned Spanish subsidiary Compañia Petrolifera de Sedano. The company owns 28.94% in Byron Energy, which in turn owns varying working interests, between 10% and 25%, in the Eugene Island joint venture in the Gulf of Mexico.
In Trinidad the company owns a 50% interest in both the Icacos Deep prospect and the Icacos oilfield. LGO also has a 10% stake in the Malta Southern Offshore exploration play.
http://www.proactiveinvestors.co.uk/companies/news/16303/leni-gas-oil-lifted-by-news-of-spain-production-off-take-deal-with-bp--16303.html
Investors liked the news, sending the stock up 13.3 percent in early deals.
The heads of agreement sets out the non-binding obligations and parameters for a proposed crude oil sales agreement to offtake the majority of the company's Spain crude production to BP Castellón and how the parties will work together with a view to consummating the proposal.
The planned agreement is for at least five years and shall include the currently producing 100 percent owned Ayoluengo oilfield and future production from other development assets across LGO’s petroleum production and exploration acreage in northern Spain which covers an area of over 550 square kilometres.
According to the company website, Ayoluengo is the largest Spanish onshore oilfield with mean STOIIP (Stock Tank Oil Initially In Place) of 104 million barrels (mmbbls). It had historical production of 17 mmbbls of 37 API oil. LGO is currently producing 130 barrels of oil per day and has initiated a major secondary recovery program to increase recovery and lift production above 1,000 bpd and identify in-fill drilling targets.
The delivery schedule regarding the BP Espana offtake is expected to be steadily increased in parallel with the development programs of LGO to increase production from all of the current and future production assets in Spain. The delivery pricing shall be at a premium to current pricing and shall be formula driven based primarily on spot commodity price index and the crude oil specification from the various producing assets.
Both companies are currently undertaking feasibility studies to engineer the facilities upgrades required to commence crude oil offtake in the fourth quarter of 2010.
Chairman David Lenigas said: “The potential tenure of this agreement provides LGO with long term revenue security in Spain, and shall allow us to accelerate the financing and development of both current and future producing assets in Spain. The completion of the long term offtake agreement with BP will be a milestone for the company, which shall underpin the value of LGO's Spain assets and compliment our development plans to accelerate multiple production assets."
"Work is near completion on updating the total Spain resources and exploitation plan subsequent to a comprehensive geological re-interpretation of our acreage using new seismic re-processing. The re-interpretation has identified additional hydrocarbon formations in the Lower Jurassic in addition to our existing production formations in the Lower Cretaceous and Upper Jurassic," he added."
In March, LGO announced its decision to divest its Hungarian assets, considered non-core as a result of the on-going reserves and resource review. It held a 14.54% stake in ZalaGasCo Kft and 7.27% of PetroHungaria Kft. The group and its advisers concluded neither venture will provide a material return on the company's Hungary investment of €2m. The company had therefore decided to relinquish its interest in both ZalaGasCo and PetroHungaria, and write off the Hungary investment.
Subsequently, the emerging resource company has assets in Spain, the Gulf of Mexico, Trinidad and Malta. It holds 100% of the Ayoluengo field through its wholly owned Spanish subsidiary Compañia Petrolifera de Sedano. The company owns 28.94% in Byron Energy, which in turn owns varying working interests, between 10% and 25%, in the Eugene Island joint venture in the Gulf of Mexico.
In Trinidad the company owns a 50% interest in both the Icacos Deep prospect and the Icacos oilfield. LGO also has a 10% stake in the Malta Southern Offshore exploration play.
http://www.proactiveinvestors.co.uk/companies/news/16303/leni-gas-oil-lifted-by-news-of-spain-production-off-take-deal-with-bp--16303.html
Nyota Minerals doubles Tulu Kapi JORC inferred resource to 1.38Moz, smashing previous 1Moz target
Nyota Minerals (AIM, ASX: NYO) has doubled the JORC inferred resource at the Tulu Kapi gold project in Ethiopia from 690,000 ounces to 1.38 million ounces. The new JORC resource estimate is based on the data from Tulu Kapi maiden resource statement, plus assay data from 25 further reverse circulation (RC) drill holes.
The new JORC resource represents a 38% increase on Nyota's previously stated objective of a 1 million ounce resource target and a 100% increase on the maiden inferred resource announced in September 2009.
The resource statement follows the compilation and technical interpretation of 4,579 metres of reverse circulation drilling by independent consultants Venmyn Rand.
"We will undertake further localised drilling to upgrade the inferred resource to an indicated category in order to provide the level of confidence needed to allow the company to proceed to feasibility. We will also continue to target drilling towards an increase in the current inferred resource”, Nyota chief executive Melissa Sturgess said.
Furthermore, the company is yet to include data from 10 drill holes already completed, as part of the recent program, in the latest JORC resource estimate.
The recent RC drilling program focused on the NE extension of mineralisation, which is contiguous with the area over which the 690,000oz maiden resource was defined. Nyota also completed infill drilling to increase the level of confidence attributable to earlier diamond drilling.
“Drilling to date has focused within a small area of the Tulu Kapi Licence and the planned deeper drilling will remain within this defined block”, Sturgess added. “Further work will be required to test the other extensions known to occur within the immediate environs of Tulu Kapi, and there is significant potential to encounter further mineralisation outside of the small area where drilling has focused to date."
Nyota highlighted that the results of previous drilling demonstrate the continuity of mineralisation intersected at depth as it tracks closer towards surface, returning grades and widths that it believes demonstrate excellent potential to support a future open pit mining operation.
Last month, in its latest quarterly report, Nyota reflected on Venmyn Rand’s findings at Tulu Kapi. The independent consultants conducted a pre-scoping study which indicated that Tulu Kapi is economically viable and concluded that open pit mining would be most likely. The study calculated payback of capital within 4-5 years from the date of first production.
The company emphasised that the Venmyn study was based on the Mineral Resource (at that time), and as such, the additional resource drilling is likely to improve the development’s attractiveness.
“Further, at a regional level, Venmyn believes that the evidence to date suggests the existence of a much larger goldfield within the greater Tulu Kapi/Ankore licence area held by the company”, Nyota stated. Nyota also noted the very positive initial metallurgical testwork results received in the period, which showed recoveries in excess of 95%.
http://www.proactiveinvestors.co.uk/companies/news/16323/nyota-minerals-doubles-tulu-kapi-jorc-inferred-resource-to-138moz-smashing-previous-1moz-target-16323.html
The new JORC resource represents a 38% increase on Nyota's previously stated objective of a 1 million ounce resource target and a 100% increase on the maiden inferred resource announced in September 2009.
The resource statement follows the compilation and technical interpretation of 4,579 metres of reverse circulation drilling by independent consultants Venmyn Rand.
"We will undertake further localised drilling to upgrade the inferred resource to an indicated category in order to provide the level of confidence needed to allow the company to proceed to feasibility. We will also continue to target drilling towards an increase in the current inferred resource”, Nyota chief executive Melissa Sturgess said.
Furthermore, the company is yet to include data from 10 drill holes already completed, as part of the recent program, in the latest JORC resource estimate.
The recent RC drilling program focused on the NE extension of mineralisation, which is contiguous with the area over which the 690,000oz maiden resource was defined. Nyota also completed infill drilling to increase the level of confidence attributable to earlier diamond drilling.
“Drilling to date has focused within a small area of the Tulu Kapi Licence and the planned deeper drilling will remain within this defined block”, Sturgess added. “Further work will be required to test the other extensions known to occur within the immediate environs of Tulu Kapi, and there is significant potential to encounter further mineralisation outside of the small area where drilling has focused to date."
Nyota highlighted that the results of previous drilling demonstrate the continuity of mineralisation intersected at depth as it tracks closer towards surface, returning grades and widths that it believes demonstrate excellent potential to support a future open pit mining operation.
Last month, in its latest quarterly report, Nyota reflected on Venmyn Rand’s findings at Tulu Kapi. The independent consultants conducted a pre-scoping study which indicated that Tulu Kapi is economically viable and concluded that open pit mining would be most likely. The study calculated payback of capital within 4-5 years from the date of first production.
The company emphasised that the Venmyn study was based on the Mineral Resource (at that time), and as such, the additional resource drilling is likely to improve the development’s attractiveness.
“Further, at a regional level, Venmyn believes that the evidence to date suggests the existence of a much larger goldfield within the greater Tulu Kapi/Ankore licence area held by the company”, Nyota stated. Nyota also noted the very positive initial metallurgical testwork results received in the period, which showed recoveries in excess of 95%.
http://www.proactiveinvestors.co.uk/companies/news/16323/nyota-minerals-doubles-tulu-kapi-jorc-inferred-resource-to-138moz-smashing-previous-1moz-target-16323.html
Diageo, Rexam, Vedanta and RSA boost FTSE 100, Morrison fails to impress
Continued expectations of a hung parliament after today’s elections in the United Kingdom did little to dampen the FTSE 100 this morning after a raft of results from blue chip companies lifted sentiment and strengthened commentators views that the British economy is pulling itself out of recession.
By 10 am the FTSE 100 was 20 points ahead at 5364, rebounding from pre-market trading which pointed to a 60 point drop. The FTSE 250 and FTSE AIM put in similar performances, opening in the red but quickly bouncing into positive territory.
Last night US markets ended lower again, but did recover from their intraday lows, which did weigh on European markets this morning.
It was strong results from a number of blue chip companies in the FTSE 350 that helped turnaround the markets.
In its Q3 interims, Diageo (LSE: DGE) reported organic net sales growth of 12%, with net sales up 2% for the whole nine-month period. Despite the better-than-expected Q3 result, the Guinness and Smirnoff brand-owner remained fairly cautious on the full-year outlook. Diageo maintained guidance for a low single digit organic operating profit growth for the year ending 30th June 2010. ‘While we have seen some signs of recovery, albeit fragile in the mature markets and stronger in the emerging markets’, Diageo Chief Executive Paul Walsh said.
The world’s largest beverage can manufacturer, Rexam (LSE: REX) also reported its first quarter results, beating its own expectations. The FTSE100 constituent revealed improved volumes for ‘Beverage Cans’ unit, and said that the ‘Plastic Packaging’ business is performing in line with the company’s plans. Furthermore, cost reduction initiatives are reported to have remained on-track. Rexam climbed 2%.
With its Q1 results, the RSA Insurance Group (LSE: RSA) said it made a good start to the year, with net written premiums up 5% to £1.9bn for the three months to 31st March 2010. RSA tacked on nearly 3%.
Whilst Randgold Resources (LSE:RRS) failed to live-up to the previous quarter’s record-breaking results, the South African gold miner reported, in its Q1 interims, that it continues to better the previous year’s comparatives, by a considerable margin. In Q108, Randgold produced 112,663 attributable ounces gold, and reported an 83% increase in year-on-year profit to US$23.9m, however on quarter-on-quarter basis, profit fell some way from US$38.7m in Q409. Randgold was little changed after the update.
Fellow gold miner, Petropavlovsk (LSE:POG) also released its Q1 interims this morning, the FTSE250 constituent reported a 37% decline in year-on-year production to 65,600oz (Q109: 104.6oz). Petropavlovsk said the results are in line with its mining plan for 2010, and reflect a transitional period in its development. The company remains on track to achieve its 2010 production target of 670,000-760,000oz. Shares in Petropavlovsk rose nearly 5%.
India focused copper mine Vendanta (LSE:VED) was one of the best performing stocks in the FTSE 100 after its results easily beat analyst expectations. Copper producers around the globe have benefited from a strong rebound in demand and prices for the metal, with many analysts forecasting demand to continue well into 2011 and beyond. Even Australian heavyweights BHP Billiton (LSE:BLT) and Rio Tinto (LSE:RIO) moved higher this morning, despite continued concerns over a new mining tax to be imposed on Australian mines.
Wm Morrison Supermarkets (LSE:MRW) results this morning failed to impress however. The UK’s fourth largest supermarket told investors that it has continued to grow market share in the first quarter, despite the anticipated slowdown in the market. The FTSE100 retailer reported a 5.9% increase in total sales (ex Fuel) in the 13 week period to 2nd May 2010.
Small Cap Stocks
Meanwhile on AIM, Nyota Minerals (AIM, ASX:NYO) announced that it had doubled the JORC inferred resource at the Tulu Kapi gold project in Ethiopia from 690,000 ounces to 1.38 million ounces. The new JORC resource represents a 38% increase on Nyota's previously stated objective of a 1 million ounce resource target and a 100% increase on the maiden inferred resource announced in September 2009. Shares in Nyota jumped 6%.
Small cap oil company, Leni Gas & Oil PLC (AIM:LGO) was also on the move this morning after the group announced completion of a heads of agreement with BP’s (LSE: BP) Spanish unit to negotiate a crude oil sales agreement to off take its current and future Spain production to BP's Castellón refinery on the east coast of the country. The planned agreement is for at least five years and shall include the currently producing 100 percent owned Ayoluengo oilfield and future production from other development assets across LGO’s petroleum production and exploration acreage in northern Spain which covers an area of over 550 square kilometres.
Diamondcorp (AIM:DCP, JSE:DMC) continued its recent form, moving 2.5% higher after confirming it has strengthened its management team with the appointment of Keith McCulloch as general manager of the Lace mine in South Africa. McCulloch’s primary responsibility will be the implementation of the decline and mine development plan designed by Snowden Mining Industry Consultants. Production at Lace is scheduled to increase to 1.2 million tonnes per annum once the existing 6x2.7m vertical shaft is re-equipped during 2011 for primary ore hoisting.
Allocate Software (AIM:ALL) climbed in early deals on news that it agreed a deal to acquire Dynamic Change, a UK-based Software as a Service (SaaS) provider, for up to £9m paid over three years. The company will make a £5m upfront payment, £4.9m in cash and £100,000 in shares, which will be followed by contingent payments up to a maximum £4m payable in cash subject to certain conditions.
Deltex Medical (AIM:DEMG) rose nearly 8% after it announced the award of a new contract to a US hospital to supply more disposable probes used with its CardioQ-ODM monitor. The contract is worth US$204,000 over six months.
http://www.proactiveinvestors.co.uk/companies/news/16326/diageo-rexam-vedanta-and-rsa-boost-ftse-100-morrison-fails-to-impress-16326.html
By 10 am the FTSE 100 was 20 points ahead at 5364, rebounding from pre-market trading which pointed to a 60 point drop. The FTSE 250 and FTSE AIM put in similar performances, opening in the red but quickly bouncing into positive territory.
Last night US markets ended lower again, but did recover from their intraday lows, which did weigh on European markets this morning.
It was strong results from a number of blue chip companies in the FTSE 350 that helped turnaround the markets.
In its Q3 interims, Diageo (LSE: DGE) reported organic net sales growth of 12%, with net sales up 2% for the whole nine-month period. Despite the better-than-expected Q3 result, the Guinness and Smirnoff brand-owner remained fairly cautious on the full-year outlook. Diageo maintained guidance for a low single digit organic operating profit growth for the year ending 30th June 2010. ‘While we have seen some signs of recovery, albeit fragile in the mature markets and stronger in the emerging markets’, Diageo Chief Executive Paul Walsh said.
The world’s largest beverage can manufacturer, Rexam (LSE: REX) also reported its first quarter results, beating its own expectations. The FTSE100 constituent revealed improved volumes for ‘Beverage Cans’ unit, and said that the ‘Plastic Packaging’ business is performing in line with the company’s plans. Furthermore, cost reduction initiatives are reported to have remained on-track. Rexam climbed 2%.
With its Q1 results, the RSA Insurance Group (LSE: RSA) said it made a good start to the year, with net written premiums up 5% to £1.9bn for the three months to 31st March 2010. RSA tacked on nearly 3%.
Whilst Randgold Resources (LSE:RRS) failed to live-up to the previous quarter’s record-breaking results, the South African gold miner reported, in its Q1 interims, that it continues to better the previous year’s comparatives, by a considerable margin. In Q108, Randgold produced 112,663 attributable ounces gold, and reported an 83% increase in year-on-year profit to US$23.9m, however on quarter-on-quarter basis, profit fell some way from US$38.7m in Q409. Randgold was little changed after the update.
Fellow gold miner, Petropavlovsk (LSE:POG) also released its Q1 interims this morning, the FTSE250 constituent reported a 37% decline in year-on-year production to 65,600oz (Q109: 104.6oz). Petropavlovsk said the results are in line with its mining plan for 2010, and reflect a transitional period in its development. The company remains on track to achieve its 2010 production target of 670,000-760,000oz. Shares in Petropavlovsk rose nearly 5%.
India focused copper mine Vendanta (LSE:VED) was one of the best performing stocks in the FTSE 100 after its results easily beat analyst expectations. Copper producers around the globe have benefited from a strong rebound in demand and prices for the metal, with many analysts forecasting demand to continue well into 2011 and beyond. Even Australian heavyweights BHP Billiton (LSE:BLT) and Rio Tinto (LSE:RIO) moved higher this morning, despite continued concerns over a new mining tax to be imposed on Australian mines.
Wm Morrison Supermarkets (LSE:MRW) results this morning failed to impress however. The UK’s fourth largest supermarket told investors that it has continued to grow market share in the first quarter, despite the anticipated slowdown in the market. The FTSE100 retailer reported a 5.9% increase in total sales (ex Fuel) in the 13 week period to 2nd May 2010.
Small Cap Stocks
Meanwhile on AIM, Nyota Minerals (AIM, ASX:NYO) announced that it had doubled the JORC inferred resource at the Tulu Kapi gold project in Ethiopia from 690,000 ounces to 1.38 million ounces. The new JORC resource represents a 38% increase on Nyota's previously stated objective of a 1 million ounce resource target and a 100% increase on the maiden inferred resource announced in September 2009. Shares in Nyota jumped 6%.
Small cap oil company, Leni Gas & Oil PLC (AIM:LGO) was also on the move this morning after the group announced completion of a heads of agreement with BP’s (LSE: BP) Spanish unit to negotiate a crude oil sales agreement to off take its current and future Spain production to BP's Castellón refinery on the east coast of the country. The planned agreement is for at least five years and shall include the currently producing 100 percent owned Ayoluengo oilfield and future production from other development assets across LGO’s petroleum production and exploration acreage in northern Spain which covers an area of over 550 square kilometres.
Diamondcorp (AIM:DCP, JSE:DMC) continued its recent form, moving 2.5% higher after confirming it has strengthened its management team with the appointment of Keith McCulloch as general manager of the Lace mine in South Africa. McCulloch’s primary responsibility will be the implementation of the decline and mine development plan designed by Snowden Mining Industry Consultants. Production at Lace is scheduled to increase to 1.2 million tonnes per annum once the existing 6x2.7m vertical shaft is re-equipped during 2011 for primary ore hoisting.
Allocate Software (AIM:ALL) climbed in early deals on news that it agreed a deal to acquire Dynamic Change, a UK-based Software as a Service (SaaS) provider, for up to £9m paid over three years. The company will make a £5m upfront payment, £4.9m in cash and £100,000 in shares, which will be followed by contingent payments up to a maximum £4m payable in cash subject to certain conditions.
Deltex Medical (AIM:DEMG) rose nearly 8% after it announced the award of a new contract to a US hospital to supply more disposable probes used with its CardioQ-ODM monitor. The contract is worth US$204,000 over six months.
http://www.proactiveinvestors.co.uk/companies/news/16326/diageo-rexam-vedanta-and-rsa-boost-ftse-100-morrison-fails-to-impress-16326.html
Metals Exploration completes feasibility study for Runruno
Metals Exploration (AIM: MTL) has completed its feasibility study for the RunRuno gold-molybdenum project in the Philippines, confirming the project’s viability with average production of 96,700oz gold per annum for a ten-year mine life. Additionally, the company classified 780,000oz gold as Proven and Probable Mining Reserves.
"Completion of the feasibility study together with the declaration, for the first time, of an independently verified Mining Reserve (as opposed to a Mineral Resource) provides investors with a definitive basis on which to assess an appropriate valuation for the company”, Metals Exploration MD Jonathan Beardsworth commented.
Mining Associates has partially converted RunRuno’s mineral resource estimate into Ore Reserves. The initial estimate was updated in April to include all drill holes completed and assays returned by the end of February 2010, comprising 741 drill holes for a total of 104,718 metres.
“The combined Measured and Indicated resource containing 900,000oz gold now comprises 63% of the total resource. In addition to the 2P reserves the company has included a further 5.5 Mt @ 1.81 g/t Au; 0.034% Mo of inferred mineral resource”, Metals Exploration stated.
“What is certain from the results of the feasibility study is that we have transformed Runruno from a promising resource into a mine-in-waiting”, Beardsworth said.
The feasibility study foresees average production of 101,800oz per annum for the first five years of operation at RunRuno, with 92,700oz p.a. expected in years 6-10. In terms of costs, the study anticipates an average forecast operating cost of $477 per ounce of gold, and a capital costs are forecast to be US$149.3 million.
Assuming a US$1,000 per ounce gold price, the study anticipates that capital costs will be paid back within 3.5 years, and RunRuno’s IRR (Internal Rate of Return) is projected to be 20% (ungeared and after tax). Metal’s Exploration highlighted that the project’s Molybdenum credits were not included in these projections and it is continuing its test-work.
The ongoing test-work, for molybdenum recovery, is targeting recoveries of at least 45%, equating to average annual production of approximately 900,000 lbs contained molybdenum.
Metals Exploration noted that, to date, the test-work has demonstrated 60% recoveries through flotation into the bulk concentrate, and 80% recovery of the balance into the BIOX solution. Until now, the pilot plant has prioritised gold recovery but with the gold test-work now substantially complete, the company can direct its resources to demonstrating molybdenum recovery from solution into a saleable product.
The company emphasised that any molybdenum recovery circuit would not be integral to the gold circuit and it would be a modular ‘add-on’ after the BIOX process.
According to Metals Exploration, the molybdenum circuit has the potential to reduce the annual operating cost base by US$7.5 - US$10.0m resulting in net operating costs falling below $400/oz gold - assuming production of 900,000lbs of contained molybdenum and a molybdenum price of US$15/lb.
“We now move into the optimisation phase ... confirmation that molybdenum recovery to a saleable product has been secured, and the continuing potential to add to the resource through step-out drilling", Beardsworth added.
Metals Exploration project managed the feasibility study, with the study's material components carried out by a number of external consultants - Mining Associates, Goldfields and SGS, Lycopodium, Leighton, GHD, Aboitiz, AECOM and SGV.
The study was based on a mineable reserve, prepared by Mining Associates, with an open pit mining operation and biological leaching using the proven BIOX process combined with conventional carbon in leach treatment, to recover gold to doré bullion and molybdenum to a saleable molybdenum product.
In March, Metals Exploration was awarded the Environmental Compliance Certificate (ECC) for RunRuno. The ECC certified that the project has complied with all the requirements of the Environmental Impact Statement (EIS) system and will not cause significant negative environmental impact.
The company said that the certificate award is a significant milestone for the project, showing support from the Philippine government for the development of the project.
http://www.proactiveinvestors.co.uk/companies/news/16178/metals-exploration-completes-feasibility-study-for-runruno-16178.html
"Completion of the feasibility study together with the declaration, for the first time, of an independently verified Mining Reserve (as opposed to a Mineral Resource) provides investors with a definitive basis on which to assess an appropriate valuation for the company”, Metals Exploration MD Jonathan Beardsworth commented.
Mining Associates has partially converted RunRuno’s mineral resource estimate into Ore Reserves. The initial estimate was updated in April to include all drill holes completed and assays returned by the end of February 2010, comprising 741 drill holes for a total of 104,718 metres.
“The combined Measured and Indicated resource containing 900,000oz gold now comprises 63% of the total resource. In addition to the 2P reserves the company has included a further 5.5 Mt @ 1.81 g/t Au; 0.034% Mo of inferred mineral resource”, Metals Exploration stated.
“What is certain from the results of the feasibility study is that we have transformed Runruno from a promising resource into a mine-in-waiting”, Beardsworth said.
The feasibility study foresees average production of 101,800oz per annum for the first five years of operation at RunRuno, with 92,700oz p.a. expected in years 6-10. In terms of costs, the study anticipates an average forecast operating cost of $477 per ounce of gold, and a capital costs are forecast to be US$149.3 million.
Assuming a US$1,000 per ounce gold price, the study anticipates that capital costs will be paid back within 3.5 years, and RunRuno’s IRR (Internal Rate of Return) is projected to be 20% (ungeared and after tax). Metal’s Exploration highlighted that the project’s Molybdenum credits were not included in these projections and it is continuing its test-work.
The ongoing test-work, for molybdenum recovery, is targeting recoveries of at least 45%, equating to average annual production of approximately 900,000 lbs contained molybdenum.
Metals Exploration noted that, to date, the test-work has demonstrated 60% recoveries through flotation into the bulk concentrate, and 80% recovery of the balance into the BIOX solution. Until now, the pilot plant has prioritised gold recovery but with the gold test-work now substantially complete, the company can direct its resources to demonstrating molybdenum recovery from solution into a saleable product.
The company emphasised that any molybdenum recovery circuit would not be integral to the gold circuit and it would be a modular ‘add-on’ after the BIOX process.
According to Metals Exploration, the molybdenum circuit has the potential to reduce the annual operating cost base by US$7.5 - US$10.0m resulting in net operating costs falling below $400/oz gold - assuming production of 900,000lbs of contained molybdenum and a molybdenum price of US$15/lb.
“We now move into the optimisation phase ... confirmation that molybdenum recovery to a saleable product has been secured, and the continuing potential to add to the resource through step-out drilling", Beardsworth added.
Metals Exploration project managed the feasibility study, with the study's material components carried out by a number of external consultants - Mining Associates, Goldfields and SGS, Lycopodium, Leighton, GHD, Aboitiz, AECOM and SGV.
The study was based on a mineable reserve, prepared by Mining Associates, with an open pit mining operation and biological leaching using the proven BIOX process combined with conventional carbon in leach treatment, to recover gold to doré bullion and molybdenum to a saleable molybdenum product.
In March, Metals Exploration was awarded the Environmental Compliance Certificate (ECC) for RunRuno. The ECC certified that the project has complied with all the requirements of the Environmental Impact Statement (EIS) system and will not cause significant negative environmental impact.
The company said that the certificate award is a significant milestone for the project, showing support from the Philippine government for the development of the project.
http://www.proactiveinvestors.co.uk/companies/news/16178/metals-exploration-completes-feasibility-study-for-runruno-16178.html
Colombian Potential for Coking Coal Producers
With the recent London Mining (AIM: LOND) acquisition of the remaining 80% of the Colombian coal producer International Coal Company (ICC), attention turns to the potential opportunities available in this South American country, which London Mining hopes to take advantage of.
Colombia is well placed both geographically and structurally as far as the coking coal market is concerned, with an abundant amount of what currently stand as untapped and underdeveloped resources. The broader market looks to keep the physical prospects for coke tight, with ever increasing global steel production and ongoing demand in China, offsetting the more subdued decreases in demand from Europe. It is in this context that we will take a look at what Colombia has to offer those companies that look to take advantage of the coking coal opportunities in the country.
Coke is a solid fuel source derived, through a process of baking in an airless furnace known as coking, from raw coal (adhering to certain criteria such as low sulfur). This process removes the varying impurities (known as volatile constituents or volatile hydrocarbons) inherent in the coal by fusing together the fixed carbon and residual ash.
Too much or too little volatile matter in the coal will result in coke of a poor quality, and it is generally considered that 26-29% volatile matter is the optimum levels for coking. Unlike coal, coke produces little to no smoke when burned, making it ideal for domestic use as well as use in more confined, or less aerated areas. The primary use of coke however is as a reducing agent when smelting iron ore in the process of steel making. It is this industrial use that drives the coke market in modern times, with the strong links between steel demand and coke prices far outweighing the sliding domestic demand for this somewhat ‘old fashioned’ fuel.
When deciding to buy the remaining 80% of ICC, London Mining cited the fragmented and underdeveloped Colombian coking coal industry, as well as opportunities for current and future concessions and joint ventures, as the primary reasons they are expanding into the South American country.
Taking a look at current production levels compared to the estimated reserves in the country’s four main regions, we can see this belief is not unfounded. Data from the coal consultancy IHS McCloskey, shows that the Boyacá and Socha regions hold an estimated coking coal reserve of 860m/tn, but currently the estimated existing production in those areas is only 1.6m/tn. An estimated 702m/tn coking coal reserves are estimated in the Cundinamarca region, while only 1.4m/tn are currently being produced from the area.
Similarly, the Norte de Santander region has an estimated reserve of 245m/tn while the Santander area holds 158m/tn, but only 0.2m/tn are being produced in Norte de Santander while no discernable production comes from Santander. These all indicate a lot of potential to develop and increase the coking coal industry within the country, and IHS McCloskey go on to suggest that as the sector develops, even more reserves are expected to be identified.
As well as these underdeveloped and unutilized reserves, the disconnected nature of the current coking coal industry in Colombia also offers significant growth potential. Currently, ownership through the entire stream of coke production is fragmented in Colombia, with the majority of mines being small-scale and undercapitalized. Although there are a few major producers, including Acerias Paz del Rio (CB: PAZRIO) and Votorantim Participacoes (BZ: 1287Z), much of the current production is actually coming from small, specialist companies, which have an almost artisan or trade-vocational nature, naturally limited in the levels they can produce and the economies of scale they can take advantage of – in turn limiting their available investment into their concessions and infrastructure surrounding the industry in Colombia.
At the same time however, the quality of Colombian coking coal is very high, and is in fact one of few regions in the world to produce low volatility coking coal. This leaves undoubtable potential for a well financed and well organized producer to take advantage of the country’s coking coal potential, by expanding either through stand-alone operations, or joint ventures.
As highlighted, the current logistics for coke production in Colombia are somewhat constrained due to years of underinvestment, however there is still a firm infrastructure in place for those companies entering the market, with the potential for an expanded and more developed network as the industry expands.
Firstly, Colombia has a large trucking fleet available for the delivery of end products, combined with fairly competitive tonnage rates (London Mining for example will pay $50 per tonne in trucking costs, for the 1,000km journey from Socha to Atlantic ports). Port access fees are themselves competitive, at around $10 per tonne.
Another immediate and even cheaper option for coke delivery is the Magdelena River, flowing through the western half of the country to the Atlantic coast. London Mining have estimated the costs of shipping via the river as between $30 and $35 per tonne, depending on the level of ‘backhaul’, i.e. the possibility for the boats to bring cargo back on their return journey.
Finally an underdeveloped area of Colombian infrastructure, but one which with some investment, would be key for coking coal producers, is the country’s rail network. As it stands, both the Atlantic and Pacific railways in Colombia require significant material refurbishment and investment before they become a reliable delivery mechanism for coke producers, with a specific need to extend capabilities in the regions where coking coal mines and producers currently work.
Again taking London Mining as an example, their current ICC project stands 16km away from the nearest private rail extension, and 60km away from the national railroad. With some reasonable investment however, this network could be improved and extended over the medium to long term, providing another viable delivery system for any new coke producers.
One last area to consider, although no less significant, is Colombia’s geographical standing as far as global exports and delivery are concerned. The country is well placed for coke delivery on both Atlantic and Pacific routes, as well as more direct delivery to South and North American countries. The country is perfectly placed for direct shipping routes to the world’s two largest coking coal importers: China and the European Union. Currently the majority of the country’s coke is sold to US traders, but already some of the biggest end product purchasers are more globally diverse, including US Steel, Brazil’s CST and the UK’s Corus. As the global economic recovery brings with it increased demand for steel, and in turn increased demand for coking coal, Colombia’s global placement will allow coking coal producers entering and developing in the country the perfect opportunity to take advantage of these key links with the world’s largest coking coal importers.
Focusing on this somewhat overlooked South American country, it would appear the board at London Mining has seen the potential it offers to the coking coal industry early. A well financed and well led company could no doubt take advantage of the opportunities that Colombia has to offer coking coal producers, and with some investment back into the infrastructure and the country’s ill invested industry, the relationship would seem to be mutually beneficial, while highly profitable in the longer term for companies such as London Mining.
http://www.proactiveinvestors.co.uk/companies/news/16257/colombian-potential-for-coking-coal-producers-16257.html
Colombia is well placed both geographically and structurally as far as the coking coal market is concerned, with an abundant amount of what currently stand as untapped and underdeveloped resources. The broader market looks to keep the physical prospects for coke tight, with ever increasing global steel production and ongoing demand in China, offsetting the more subdued decreases in demand from Europe. It is in this context that we will take a look at what Colombia has to offer those companies that look to take advantage of the coking coal opportunities in the country.
Coke is a solid fuel source derived, through a process of baking in an airless furnace known as coking, from raw coal (adhering to certain criteria such as low sulfur). This process removes the varying impurities (known as volatile constituents or volatile hydrocarbons) inherent in the coal by fusing together the fixed carbon and residual ash.
Too much or too little volatile matter in the coal will result in coke of a poor quality, and it is generally considered that 26-29% volatile matter is the optimum levels for coking. Unlike coal, coke produces little to no smoke when burned, making it ideal for domestic use as well as use in more confined, or less aerated areas. The primary use of coke however is as a reducing agent when smelting iron ore in the process of steel making. It is this industrial use that drives the coke market in modern times, with the strong links between steel demand and coke prices far outweighing the sliding domestic demand for this somewhat ‘old fashioned’ fuel.
When deciding to buy the remaining 80% of ICC, London Mining cited the fragmented and underdeveloped Colombian coking coal industry, as well as opportunities for current and future concessions and joint ventures, as the primary reasons they are expanding into the South American country.
Taking a look at current production levels compared to the estimated reserves in the country’s four main regions, we can see this belief is not unfounded. Data from the coal consultancy IHS McCloskey, shows that the Boyacá and Socha regions hold an estimated coking coal reserve of 860m/tn, but currently the estimated existing production in those areas is only 1.6m/tn. An estimated 702m/tn coking coal reserves are estimated in the Cundinamarca region, while only 1.4m/tn are currently being produced from the area.
Similarly, the Norte de Santander region has an estimated reserve of 245m/tn while the Santander area holds 158m/tn, but only 0.2m/tn are being produced in Norte de Santander while no discernable production comes from Santander. These all indicate a lot of potential to develop and increase the coking coal industry within the country, and IHS McCloskey go on to suggest that as the sector develops, even more reserves are expected to be identified.
As well as these underdeveloped and unutilized reserves, the disconnected nature of the current coking coal industry in Colombia also offers significant growth potential. Currently, ownership through the entire stream of coke production is fragmented in Colombia, with the majority of mines being small-scale and undercapitalized. Although there are a few major producers, including Acerias Paz del Rio (CB: PAZRIO) and Votorantim Participacoes (BZ: 1287Z), much of the current production is actually coming from small, specialist companies, which have an almost artisan or trade-vocational nature, naturally limited in the levels they can produce and the economies of scale they can take advantage of – in turn limiting their available investment into their concessions and infrastructure surrounding the industry in Colombia.
At the same time however, the quality of Colombian coking coal is very high, and is in fact one of few regions in the world to produce low volatility coking coal. This leaves undoubtable potential for a well financed and well organized producer to take advantage of the country’s coking coal potential, by expanding either through stand-alone operations, or joint ventures.
As highlighted, the current logistics for coke production in Colombia are somewhat constrained due to years of underinvestment, however there is still a firm infrastructure in place for those companies entering the market, with the potential for an expanded and more developed network as the industry expands.
Firstly, Colombia has a large trucking fleet available for the delivery of end products, combined with fairly competitive tonnage rates (London Mining for example will pay $50 per tonne in trucking costs, for the 1,000km journey from Socha to Atlantic ports). Port access fees are themselves competitive, at around $10 per tonne.
Another immediate and even cheaper option for coke delivery is the Magdelena River, flowing through the western half of the country to the Atlantic coast. London Mining have estimated the costs of shipping via the river as between $30 and $35 per tonne, depending on the level of ‘backhaul’, i.e. the possibility for the boats to bring cargo back on their return journey.
Finally an underdeveloped area of Colombian infrastructure, but one which with some investment, would be key for coking coal producers, is the country’s rail network. As it stands, both the Atlantic and Pacific railways in Colombia require significant material refurbishment and investment before they become a reliable delivery mechanism for coke producers, with a specific need to extend capabilities in the regions where coking coal mines and producers currently work.
Again taking London Mining as an example, their current ICC project stands 16km away from the nearest private rail extension, and 60km away from the national railroad. With some reasonable investment however, this network could be improved and extended over the medium to long term, providing another viable delivery system for any new coke producers.
One last area to consider, although no less significant, is Colombia’s geographical standing as far as global exports and delivery are concerned. The country is well placed for coke delivery on both Atlantic and Pacific routes, as well as more direct delivery to South and North American countries. The country is perfectly placed for direct shipping routes to the world’s two largest coking coal importers: China and the European Union. Currently the majority of the country’s coke is sold to US traders, but already some of the biggest end product purchasers are more globally diverse, including US Steel, Brazil’s CST and the UK’s Corus. As the global economic recovery brings with it increased demand for steel, and in turn increased demand for coking coal, Colombia’s global placement will allow coking coal producers entering and developing in the country the perfect opportunity to take advantage of these key links with the world’s largest coking coal importers.
Focusing on this somewhat overlooked South American country, it would appear the board at London Mining has seen the potential it offers to the coking coal industry early. A well financed and well led company could no doubt take advantage of the opportunities that Colombia has to offer coking coal producers, and with some investment back into the infrastructure and the country’s ill invested industry, the relationship would seem to be mutually beneficial, while highly profitable in the longer term for companies such as London Mining.
http://www.proactiveinvestors.co.uk/companies/news/16257/colombian-potential-for-coking-coal-producers-16257.html
Allocate Software expands SaaS offering with UK acquisition
Allocate Software (AIM: ALL) has agreed a deal to acquire Dynamic Change Ltd, a UK-based Software as a Service (SaaS) provider, for up to £9m paid over three years. The company will make a £5m upfront payment, £4.9m in cash and £100,000 in shares, which will be followed by contingent payments up to a maximum £4m payable in cash subject to certain conditions.
"With this acquisition we continue to broaden Allocate's application portfolio for the healthcare sector which will now include regulatory compliance, corporate governance, risk and performance management. We will also gain domain expertise in Software-as-a-Service,” Allocate chief executive Ian Bowles commented.
“We believe this is an attractive opportunity to achieve additional visibility in our top-line growth and increase our recurring revenue base."
Staffordshire-headquartered Dynamic Change provides regulatory compliance, corporate governance, risk and performance management for the UK healthcare market. In the financial year ended 31 March 2010, Dynamic Change generated total revenues of approximately £3.2 million, and achieved EBITDA of approximately £0.5 million, representing an EBITDA margin of approximately 16%. As at 31 March 2010, Dynamic Change had 121 healthcare customers.
The £4m in contingent payments will be payable based on Dynamic Change’s performance over the next 3 financial years. To receive any further payment, Dynamic Change must achieve at least 15% compound annual growth in run-rate subscription revenues. In respect of the full £4m payment, Dynamic Change must achieve at least 25% compound annual growth in run-rate subscription revenues in the three year period.
Allocate expects the acquisition to be significantly earnings enhancing in the first full financial year, furthermore the company believes that Dynamic Change's SaaS business model, boasting high levels of recurring revenue, will provide the enlarged group with improved visibility on future revenues.
Dynamic Change’s principal software is the ‘Performance Accelerator’ SaaS platform, a single platform accessed via a web browser. The platform incorporates all applicable regulatory standards and obligations for Dynamic Change's healthcare customers, and as such content is maintained by Dynamic Change on an on-going basis.
The ‘Performance Accelerator’ is used to monitor and manage regulatory compliance, corporate governance, business objectives, risks and controls, performance indicators and financial targets. According to Allocate, it has conducted detailed technical due diligence, and it believes that the technology architecture is robust and scalable for significant organic growth.
“There are expected to be opportunities to generate incremental revenues from the penetration of Allocate's customer base with Dynamic Change's Performance Accelerator product. The board believes that there is significant potential for growth within the UK healthcare market, through new customer wins as well as continuing to grow the number of users at existing customers,” Bowles said.
Furthermore, Allocate believes there is the potential for Allocate to use its global reach to take the product, in due course, to certain international markets.
In response to the announcement, London-based stockbroker Astaire Securities highlighted that the acquisition further broadens Allocate’s application portfolio for the healthcare sector, and it brings the company up to speed in SaaS. According to Astaire, the compliance market has remained a resilient, and it expects to further growth. "With a single central code base, one would expect margins to increase rapidly as the number of subscribers increase."
In March, in its Q3 interims, Allocate reported its strong progress during the current year, highlighting its expansion into Australia and New Zealand and stronger presence in the Nordic region following the acquisition of Time Care AB.
In the third quarter, the company was busy winning new contracts, landing its first e-Rostering contract award under LPP and eight NHS contracts for MAPS Healthroster to take the total NHS e-Rostering customer base to 105 trusts, of which 69 acute trusts, 21 mental health trusts and 15 primary care trusts.
This included the first Healthcare contract win in New Zealand for MAPS Healthroster and the first Healthcare contract win in Australia for MESaLS as well as a major services contract awarded by NATO to deliver new mission-important system capabilities for Allocate's existing Special Forces MAPS deployment.
The Time Care acquisition was closed in December, paying £8.7 million for the company. Allocate expects the deal to help achieve its goal of driving organic growth at over 20% per annum and to move operating margins towards 20%, which broker Edison Investment Research said could drive the group’s value through £50 million, supported by a stock valuation of 100 pence per share.
Time Care AB has landed 17 new contracts during the third quarter.
http://www.proactiveinvestors.co.uk/companies/news/16302/allocate-software-expands-saas-offering-with-uk-acquisition--16302.html
"With this acquisition we continue to broaden Allocate's application portfolio for the healthcare sector which will now include regulatory compliance, corporate governance, risk and performance management. We will also gain domain expertise in Software-as-a-Service,” Allocate chief executive Ian Bowles commented.
“We believe this is an attractive opportunity to achieve additional visibility in our top-line growth and increase our recurring revenue base."
Staffordshire-headquartered Dynamic Change provides regulatory compliance, corporate governance, risk and performance management for the UK healthcare market. In the financial year ended 31 March 2010, Dynamic Change generated total revenues of approximately £3.2 million, and achieved EBITDA of approximately £0.5 million, representing an EBITDA margin of approximately 16%. As at 31 March 2010, Dynamic Change had 121 healthcare customers.
The £4m in contingent payments will be payable based on Dynamic Change’s performance over the next 3 financial years. To receive any further payment, Dynamic Change must achieve at least 15% compound annual growth in run-rate subscription revenues. In respect of the full £4m payment, Dynamic Change must achieve at least 25% compound annual growth in run-rate subscription revenues in the three year period.
Allocate expects the acquisition to be significantly earnings enhancing in the first full financial year, furthermore the company believes that Dynamic Change's SaaS business model, boasting high levels of recurring revenue, will provide the enlarged group with improved visibility on future revenues.
Dynamic Change’s principal software is the ‘Performance Accelerator’ SaaS platform, a single platform accessed via a web browser. The platform incorporates all applicable regulatory standards and obligations for Dynamic Change's healthcare customers, and as such content is maintained by Dynamic Change on an on-going basis.
The ‘Performance Accelerator’ is used to monitor and manage regulatory compliance, corporate governance, business objectives, risks and controls, performance indicators and financial targets. According to Allocate, it has conducted detailed technical due diligence, and it believes that the technology architecture is robust and scalable for significant organic growth.
“There are expected to be opportunities to generate incremental revenues from the penetration of Allocate's customer base with Dynamic Change's Performance Accelerator product. The board believes that there is significant potential for growth within the UK healthcare market, through new customer wins as well as continuing to grow the number of users at existing customers,” Bowles said.
Furthermore, Allocate believes there is the potential for Allocate to use its global reach to take the product, in due course, to certain international markets.
In response to the announcement, London-based stockbroker Astaire Securities highlighted that the acquisition further broadens Allocate’s application portfolio for the healthcare sector, and it brings the company up to speed in SaaS. According to Astaire, the compliance market has remained a resilient, and it expects to further growth. "With a single central code base, one would expect margins to increase rapidly as the number of subscribers increase."
In March, in its Q3 interims, Allocate reported its strong progress during the current year, highlighting its expansion into Australia and New Zealand and stronger presence in the Nordic region following the acquisition of Time Care AB.
In the third quarter, the company was busy winning new contracts, landing its first e-Rostering contract award under LPP and eight NHS contracts for MAPS Healthroster to take the total NHS e-Rostering customer base to 105 trusts, of which 69 acute trusts, 21 mental health trusts and 15 primary care trusts.
This included the first Healthcare contract win in New Zealand for MAPS Healthroster and the first Healthcare contract win in Australia for MESaLS as well as a major services contract awarded by NATO to deliver new mission-important system capabilities for Allocate's existing Special Forces MAPS deployment.
The Time Care acquisition was closed in December, paying £8.7 million for the company. Allocate expects the deal to help achieve its goal of driving organic growth at over 20% per annum and to move operating margins towards 20%, which broker Edison Investment Research said could drive the group’s value through £50 million, supported by a stock valuation of 100 pence per share.
Time Care AB has landed 17 new contracts during the third quarter.
http://www.proactiveinvestors.co.uk/companies/news/16302/allocate-software-expands-saas-offering-with-uk-acquisition--16302.html
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