Rambler Metals & Mining (LON:RMM, TSX-V:RAB) announced the promotion of its project coordinator Peter Mercer to the position of vice president for corporate development.
The VP Corporate Development role is a new position created to help explore and develop growth opportunities both internal and external to the company.
Mercer joined Rambler in 2007 as the project coordinator for the Ming copper-gold mine, having been part of the original Altius team that began work on the property as early as 2003.
The Ming mine is located on Newfoundland and Labrador's Baie Verte Peninsula. Ming is Rambler’s primary focus and it was initially a copper play. However, an extensive exploration programme conducted by Rambler over recent years has increasingly identified elevated gold grades
Rambler president and CEO George Ogilvie commented: “During his tenure as project coordinator he has shown tremendous drive and enthusiasm and has been integral to the success of the project, taking it from a grass roots exploration play to a near term producer.
“We anticipate that these same characteristics, coupled with Peter's education in geology, will aid in the discovery and development of the next business opportunity for Rambler. I would like to congratulate Peter on his new appointment as we look to grow our business in the future."
Rambler said last week it was set to receive a US$2m cash boost after Sandstorm Resources (CVE:SSL) accepted the company’s feasibility study for the Ming mine. The payment represents the second instalment under the gold off-take deal, which was arranged in March 2010.
Sandstorm paid an initial US$5m in March, and the third payment of US$13m will be made once Rambler has secured the key permits for the Ming Mine's construction. It is currently anticipated that the permitting will be completed during the second half of 2010.
In return for the upfront payments, Sandstorm will be entitled to 25% of the Ming mine’s first 175,000 ounces of payable gold, and 12% of all payable gold thereafter. Initially the agreement will last for 40 years and Sandstorm has the right to renew the deal for successive 10 year periods thereafter.
The final feasibility study of the project confirmed an initial 6-year mine life at 630 tonnes per day with an average annual production of 7.7 million lbs of copper, 11,600 ounces of gold and 42,600 ounces of silver. Production is targeted in Q2 2011.
Total production for the 6 year mine life is expected to be at 46.24 Mlbs (million pounds) of copper, 69,468 ounces of gold and 255,388 ounces of silver.
Proactiveinvestors is a leading multi-media news organisation, investor portal and events management business with offices in New York, Sydney, Toronto, Frankfurt and London.
Wednesday, 8 September 2010
Alliance Pharma will ‘continue adding brands’ after a 166% jump in first half profits
Alliance Pharma (LON: APH) has revealed ‘yet another’ set of record financial results, with a 77% increase in first half sales to £23.4m (H109: £13.2m) and a dramatic 166% rise in pretax profit to £7.7m (H109: £2.9m).
"We are delighted to announce yet another set of record results, reflecting a strong performance from the existing business and the benefits of two significant acquisitions,” Alliance chairman Michael Gatenby said.
In his statement, Gatenby highlighted that the company intends to continue adding brands that fit its growth strategy, and it is well placed to fund further acquisitions, when they find the right deals.
Alliance Pharma was founded in 1998, and since then the acquisitive pharmaceutical company has established a strong track record of acquiring the rights to established niche products.
Most recently, the company added 18 new prescription products to its portfolio through the Cambridge Laboratories acquisition in February 2010.
Specifically, through its growth strategy Alliance aims to acquire or license established prescription products in niche areas that are “too small to attract competition, with the majority requiring little or no promotional support”.
“As we anticipated ...2010 is proving to be an outstanding year for Alliance,” Gatenby stated.
“In the first half of the year sales have grown strongly, benefiting from the Cambridge Laboratories acquisition in February, an initial first half year contribution from Buccastem and Timodine”
“The business is trading very profitably and generating such strong cash flow that net debt has reduced during the first half despite the investment in acquiring Cambridge Laboratories.”
In the six months ended 30th June 2010, Alliance’s strong sales performance has seen adjusted earnings per share (EPS) almost double, rising 98% to 2.54p (H109: 1.28p). Similarly, operating cash flow grew by more than 100% to £7.8m (H109: £3.7m).
Gross margin was 61%, which is in line with the preceding six-months and up from the 53% reported for the comparative period of 2009.
Due to this record performance, Alliance has decided to increase its interim dividend by 143% to 0.17 pence per share (H109: 0.07 pence).
Alliance currently owns or licenses over 50 prescription products across a broad range of therapeutic areas – including ‘Anti Infective’, Cardiovascular, Obstetrics & Gynaecology, Toxicology, Oncology, Rheumatology and many others.
In reference to its outlook, Alliance said it is “well on the way to making 2010 another record year”.
“In uncertain times our non-promoted portfolio, which is largely unaffected by economic conditions, provides a continuing source of stability ... our increasingly substantial portfolio of promoted products has enhanced growth potential.”
“In addition, Alliance is well positioned to take advantage of current market conditions by seeking out further acquisition opportunities”.
"We are delighted to announce yet another set of record results, reflecting a strong performance from the existing business and the benefits of two significant acquisitions,” Alliance chairman Michael Gatenby said.
In his statement, Gatenby highlighted that the company intends to continue adding brands that fit its growth strategy, and it is well placed to fund further acquisitions, when they find the right deals.
Alliance Pharma was founded in 1998, and since then the acquisitive pharmaceutical company has established a strong track record of acquiring the rights to established niche products.
Most recently, the company added 18 new prescription products to its portfolio through the Cambridge Laboratories acquisition in February 2010.
Specifically, through its growth strategy Alliance aims to acquire or license established prescription products in niche areas that are “too small to attract competition, with the majority requiring little or no promotional support”.
“As we anticipated ...2010 is proving to be an outstanding year for Alliance,” Gatenby stated.
“In the first half of the year sales have grown strongly, benefiting from the Cambridge Laboratories acquisition in February, an initial first half year contribution from Buccastem and Timodine”
“The business is trading very profitably and generating such strong cash flow that net debt has reduced during the first half despite the investment in acquiring Cambridge Laboratories.”
In the six months ended 30th June 2010, Alliance’s strong sales performance has seen adjusted earnings per share (EPS) almost double, rising 98% to 2.54p (H109: 1.28p). Similarly, operating cash flow grew by more than 100% to £7.8m (H109: £3.7m).
Gross margin was 61%, which is in line with the preceding six-months and up from the 53% reported for the comparative period of 2009.
Due to this record performance, Alliance has decided to increase its interim dividend by 143% to 0.17 pence per share (H109: 0.07 pence).
Alliance currently owns or licenses over 50 prescription products across a broad range of therapeutic areas – including ‘Anti Infective’, Cardiovascular, Obstetrics & Gynaecology, Toxicology, Oncology, Rheumatology and many others.
In reference to its outlook, Alliance said it is “well on the way to making 2010 another record year”.
“In uncertain times our non-promoted portfolio, which is largely unaffected by economic conditions, provides a continuing source of stability ... our increasingly substantial portfolio of promoted products has enhanced growth potential.”
“In addition, Alliance is well positioned to take advantage of current market conditions by seeking out further acquisition opportunities”.
Nyota Minerals to start regional exploration across all of its Ethiopian licence areas
Nyota Minerals (LON:NYO, ASX:NYO) announced its plans to commence regional exploration across all of its Ethiopian licence areas, broadening its focus now that it is confident of the potential at its flagship Tulu Kapi gold project in the country.
UTS-Aeroquest of Australia will undertake a 44,700 line kilometres fixed wing airborne geophysical survey of Nyota's exploration properties in Ethiopia which is scheduled to be completed during the fourth quarter 2010.
Information from this will be used to guide Nyota's regional exploration program that will commence in October. The program will consist of rock and soil geochemical sampling, mapping and trenching and reverse circulation drilling. The regional exploration program will systematically advance each of the targets identified.
Nyota's Ethiopian exploration properties are currently made up of seven individual claims blocks: Mendi (previously Brantham), Bambasi, Gombe, Dura (previously Towchester), Billa Gulliso, Yubdo and the Tulu Kapi claim group. In total the properties cover an area of 3,550 square kilometres.
CEO Melissa Sturgess commented: "We are broadening the company's focus to begin serious exploration of our entire Ethiopian portfolio now that we are confident of the potential at Tulu Kapi. Nyota is one of the first movers and fastest explorers in Ethiopia and we hope that our exploration efforts over our regional tenements identify projects for future development.”
“We remain excited by the area’s potential and note recent exploration successes in the region. At a recent conference in Addis Abbaba a private company conducting advanced exploration activities 2.5 km north of Mendi announced a discovery of over 0.5 million ounces of gold," she added.
All the properties have excellent prospectivity for new mineral discoveries. The claim blocks show favourable geological settings, structural settings and good mineral indications. There are a number of good gold mineralization showings in the area both as primary and alluvial indications with some of them associated with base-metal anomalous zones, Nyota said.
At Tulu Kapi, an ongoing drilling programme is designed to expand and upgrade the current Inferred JORC resource of 1.38 Moz (million ounces).
UTS-Aeroquest of Australia will undertake a 44,700 line kilometres fixed wing airborne geophysical survey of Nyota's exploration properties in Ethiopia which is scheduled to be completed during the fourth quarter 2010.
Information from this will be used to guide Nyota's regional exploration program that will commence in October. The program will consist of rock and soil geochemical sampling, mapping and trenching and reverse circulation drilling. The regional exploration program will systematically advance each of the targets identified.
Nyota's Ethiopian exploration properties are currently made up of seven individual claims blocks: Mendi (previously Brantham), Bambasi, Gombe, Dura (previously Towchester), Billa Gulliso, Yubdo and the Tulu Kapi claim group. In total the properties cover an area of 3,550 square kilometres.
CEO Melissa Sturgess commented: "We are broadening the company's focus to begin serious exploration of our entire Ethiopian portfolio now that we are confident of the potential at Tulu Kapi. Nyota is one of the first movers and fastest explorers in Ethiopia and we hope that our exploration efforts over our regional tenements identify projects for future development.”
“We remain excited by the area’s potential and note recent exploration successes in the region. At a recent conference in Addis Abbaba a private company conducting advanced exploration activities 2.5 km north of Mendi announced a discovery of over 0.5 million ounces of gold," she added.
All the properties have excellent prospectivity for new mineral discoveries. The claim blocks show favourable geological settings, structural settings and good mineral indications. There are a number of good gold mineralization showings in the area both as primary and alluvial indications with some of them associated with base-metal anomalous zones, Nyota said.
At Tulu Kapi, an ongoing drilling programme is designed to expand and upgrade the current Inferred JORC resource of 1.38 Moz (million ounces).
Telit Communications expects forecast-busting full year after excellent first half
In the company’s interim results, Telit Communications (LON:TCM)chief executive Oozi Cats said the first six months had been excellent in terms of revenues and sales. A 61% jump in first half revenue to US$59.6m led to a dramatic swing back into profitability. H1 net profit was US$1.4m compared to a $2.6m loss in the first six months of 2009.
Telit said that the rest of 2010 looks positive, the company expects to continue its "robust growth" and its full year results are now expected to be ahead of current market expectations.
"The steps we took during the economic downturn in late 2008 and 2009 have put us in a position where we have now returned to our previous robust growth rates and we continue to gain market share”, Oozi Cats commented.
Telit is a wireless machine-to-machine (M2M) communications specialist. The company manufacture the modules which enable wireless devices to communicate with each other, and external networks.
In its results statement, Telit highlighted a recent report by a specialist market researcher. Beecham Research forecasts that the market will see continuous and increasing growth over the coming years.
According to August's Beecham Research report, M2M network connections will reach 75.1 million by 2014, with the number of units to be shipped achieving a CAGR (Compound Annual Growth Rate) of 29.2% during 2009 to 2014.
Telit said that the rest of 2010 looks positive, the company expects to continue its "robust growth" and its full year results are now expected to be ahead of current market expectations.
"The steps we took during the economic downturn in late 2008 and 2009 have put us in a position where we have now returned to our previous robust growth rates and we continue to gain market share”, Oozi Cats commented.
Investors on London’s AIM market welcomed the news, as Telit shares climbed just under 5% in early trading.
In the six months ended 30th June 2010, gross profit rose by 49% to $25.2m (H109: $16.9m), while the gross margin edged lower to 42.2% (H109:45.8%). The first half operating profit was $1.9m (H109: $2.2m loss).
Earnings (Adjusted EBITDA) improved substantially to US$5.4m compared to US$0.8m in the first half of 2009, and basic earnings per share (EPS) turned positive to 1.5 cents per share, up from a 5.9 cents loss in H109.
In the wake of the company's improved outlook for the full year, Astaire Securities has upgraded its forecasts.
Telit is now expected to generate revenues of U$131m in 2010, representing a 29.6% increase on previous guidance and year-on-year growth of 47.5%. The broker upped its earnings (adjusted EBITDA) forecast by 47.1% for the full year, Telit is now expected to increase earnings by approx 114% to US$12.5m.
For 2011, it is forecasting 34.1% revenue growth to US$165.0m and earnings to rise by 29.7% to US$20.1m.
“The shift of manufacturing to China has helped offset the reduction in average selling prices and boosted capacity to capitalise on the larger market opportunity,” said David Johnson, Astaire Securities equity analyst.
“With its share of design wins ahead of its current market share, Telit should continue to grow faster than a market forecast 16.7% annual revenue growth over the next five years.”
“Telit is trading on a FY11 PER of 7.1 well below the UK sector average as well as recent sector consolidation that would point to a realistic share price level of c. 95p.”
From an operational perspective, Telit told investors that it continues to look for further improvements.
“We are constantly working on improving our cost base, logistics and purchasing, to achieve and maintain a higher level of profitability in the long run,” Oozi Cats said.
"We have strengthened our presence in Eastern Europe with the opening of an office in St. Petersburg ... In 2010 we expanded our partner network on a regional scale as well as worldwide, by teaming up with Telco heavyweights Deutsche Telekom, T-Mobile and Orange (France).”
Earnings (Adjusted EBITDA) improved substantially to US$5.4m compared to US$0.8m in the first half of 2009, and basic earnings per share (EPS) turned positive to 1.5 cents per share, up from a 5.9 cents loss in H109.
In the wake of the company's improved outlook for the full year, Astaire Securities has upgraded its forecasts.
Telit is now expected to generate revenues of U$131m in 2010, representing a 29.6% increase on previous guidance and year-on-year growth of 47.5%. The broker upped its earnings (adjusted EBITDA) forecast by 47.1% for the full year, Telit is now expected to increase earnings by approx 114% to US$12.5m.
For 2011, it is forecasting 34.1% revenue growth to US$165.0m and earnings to rise by 29.7% to US$20.1m.
“The shift of manufacturing to China has helped offset the reduction in average selling prices and boosted capacity to capitalise on the larger market opportunity,” said David Johnson, Astaire Securities equity analyst.
“With its share of design wins ahead of its current market share, Telit should continue to grow faster than a market forecast 16.7% annual revenue growth over the next five years.”
“Telit is trading on a FY11 PER of 7.1 well below the UK sector average as well as recent sector consolidation that would point to a realistic share price level of c. 95p.”
From an operational perspective, Telit told investors that it continues to look for further improvements.
“We are constantly working on improving our cost base, logistics and purchasing, to achieve and maintain a higher level of profitability in the long run,” Oozi Cats said.
"We have strengthened our presence in Eastern Europe with the opening of an office in St. Petersburg ... In 2010 we expanded our partner network on a regional scale as well as worldwide, by teaming up with Telco heavyweights Deutsche Telekom, T-Mobile and Orange (France).”
In its results statement, Telit highlighted a recent report by a specialist market researcher. Beecham Research forecasts that the market will see continuous and increasing growth over the coming years.
According to August's Beecham Research report, M2M network connections will reach 75.1 million by 2014, with the number of units to be shipped achieving a CAGR (Compound Annual Growth Rate) of 29.2% during 2009 to 2014.
SeaEnergy’s SERL agrees heads of terms to progress Inch Cape wind farm development
SeaEnergy PLC (LON:SEA) announced that its 80 percent owned subsidiary SeaEnergy Renewables Ltd (SERL) has agreed Heads of Terms with The Crown Estate for the funding of certain Inch Cape offshore wind farm development activities.
Under the agreement, The Crown Estate will directly invest up to £1.4 million in key surveys and reports, including scoping reports, geophysical surveys and bird and mammal surveys, which will be directly contracted and managed by SERL. The Crown Estate and SERL will now seek to finalise a formal development agreement in respect of these arrangements.
Investors liked the news, sending SeaEnergy up 6.6 percent in early trade.
Following the site award, the consortium entered into an exclusivity agreement with The Crown Estate to negotiate a lease deal once the Scottish government had concluded the environmental assessment process.
Npower notified SERL and The Crown Estate earlier this year of its desire to exit the Inch Cape project. This was due to the considerable size of its other onshore and offshore renewable generation commitments.
SERL CEO Joel Staadecker said: "We are delighted that The Crown Estate shares our commitment to the Inch Cape offshore wind farm and look forward to concluding the formal development agreement."
SeaEnergy is currently marketing its stake in SERL, after a re-evaluation earlier this year of its strategy and a decision to focus the business on the wind-farm servicing business, rather than developing wind-farms itself. In June, in its final results statement, SeaEnergy announced the plan to concentrate on marine services for the offshore wind power industry, after an assessment of the equity markets, investor sentiment and the funding environment.
In July, the company hired Ernst & Young’s Renewable Energy arm as an adviser to coordinate the sale of its 80 percent-interest in SERL.
In August, SeaEnergy took what it called an “important step closer” to launching its marine services business for the offshore wind-power industry, with the signing of an exclusivity agreement to secure use of ship-based self stabilizing platforms from Ampelmann - a Dutch marine engineering group.
Under the agreement, The Crown Estate will directly invest up to £1.4 million in key surveys and reports, including scoping reports, geophysical surveys and bird and mammal surveys, which will be directly contracted and managed by SERL. The Crown Estate and SERL will now seek to finalise a formal development agreement in respect of these arrangements.
Investors liked the news, sending SeaEnergy up 6.6 percent in early trade.
The Inch Cape site was awarded to a consortium comprised of RWE npower renewables (npower) and SERL in February 2009 as a part of the Scottish Territorial Waters leasing round conducted by The Crown Estate in association with the Scottish government.
Npower notified SERL and The Crown Estate earlier this year of its desire to exit the Inch Cape project. This was due to the considerable size of its other onshore and offshore renewable generation commitments.
SERL CEO Joel Staadecker said: "We are delighted that The Crown Estate shares our commitment to the Inch Cape offshore wind farm and look forward to concluding the formal development agreement."
SeaEnergy is currently marketing its stake in SERL, after a re-evaluation earlier this year of its strategy and a decision to focus the business on the wind-farm servicing business, rather than developing wind-farms itself. In June, in its final results statement, SeaEnergy announced the plan to concentrate on marine services for the offshore wind power industry, after an assessment of the equity markets, investor sentiment and the funding environment.
In July, the company hired Ernst & Young’s Renewable Energy arm as an adviser to coordinate the sale of its 80 percent-interest in SERL.
In August, SeaEnergy took what it called an “important step closer” to launching its marine services business for the offshore wind-power industry, with the signing of an exclusivity agreement to secure use of ship-based self stabilizing platforms from Ampelmann - a Dutch marine engineering group.
Renovo's Ferguson Heads for Crunch Year in Confident Mood
Renovo (LON:RNVO) told us earlier today Juvista, its potentially ground-breaking treatment for scarring, was safe in patients being treated after the removal of scar growths called keloids.
However as expected the phase I trial was unable to establish whether Juvista had any effect on scar reduction or the re-occurrence of the growth.
There are occasions where an early safety study of this kind will reveal signs of efficacy.
The company is clear that it hit its ‘primary objectives’ covering the safety aspects.
‘We had to find out whether Juvista made the keloid worse,’ said chief executive Mark Ferguson.
‘The answer was definitely not. There are no safety issues at all. That was the whole purpose of the trial.
‘The implication of that is our entire programme remains on track and on schedule.’
Interesting as it is, this early work on keloids is of far less importance than the pivotal European phase III study on Juvista’s use after scar revision surgery.
Renovo has recruited 350 patients to the efficacy trial, and it is scheduled to report its findings in the first half of next year.
A positive result ought to be transformational for the group – though the market seems almost irrationally cautious about the prospects of the company and its lead product.
The current valuation of the firm is a little over £42 million. At the end of June Renovo held £56 million in cash.
And by the middle of next year, when the EU phase III trial has reported, the group has pledged to have at least £25-£30 million of that money left.
This is a very deliberate strategy of chief executive Ferguson and his team.
‘We want to make Renovo an attractive investment,’ he told Proactive Investors.
‘We want to create for the investor an asymmetric risk.
‘If you think the Juvista phase III trial is going to be positive, then it (the share price) should be multiples of where it is today.
‘If the phase III trial is a failure then basically there is more or less the cash value of the company in the share price that you have paid for.
‘The downside is minimal because there are still the other programmes and the cash.’
‘But I’m trying to put myself in the place of the investor here.’
The company has partnered with FTSE 100 drugs firm Shire (LON:SHP) to develop Juvista and exploit its commercial potential.
The deal could be worth as much as US$825 million in milestone payments and royalties and the company has already received US$125 million.
The next payment – a more modest sum of US$5 million – ought to come in the second half of next year, when Shire gets its clinical trials in the US underway.
The group will then receive a further US$25 million when it submits Juvista for approval to the US Food & Drug Administration, followed by a payment of between US$50 million and US$150 million on approval.
However, the terms of the deal have altered with Shire keeping the rights to develop and sell Juvista in the US, Canada and Mexico, but winning the option to licence it out to a third party.
In return Renovo has wrestled back the rights to the scarring treatment for the rest of the world.
This, Ferguson says, gives the company a great deal more flexibility than the original deal had allowed.
Renovo is yet to decide whether it will market and sell Juvista itself in Europe, or find a partner.
However the chief executive is adamant that outside the company’s home market, the partnership model works best.
‘It would be unreal of us to think we could sell directly into a country such as China,’ Ferguson said.
Juvista was discovered in the late 1980s as part of Ferguson’s work at Manchester University on cleft palate.
The emphasis of the work has so far been on scar revision, where a plastic surgeons attempts to improve the appearance of post-operative scarring.
However there are all sorts of potential alternative uses from varicose vein treatment to cosmetic surgery.
However, there have been two failures of Juvista – in mole removal and breast augmentation.
Ferguson is unperturbed and unsurprised by the setbacks. In neither case was the optimum dose used, he says.
Rightly the emphasis from an investors’ standpoint at least has been on the potentially ground-breaking Juvista.
But Renovo is not a one product company – far from it.
There is Adaprev, which is being developed to treat tendon scarring after injury that can lead to recurring pain and loss of movement in the affected digit.
Currently 44 patients are being recruited to the first of two trials which are required for Adaprev’s approval as a medical device.
The first trial will report in the second half of next year.
And there is Prevascar, where tests are being carried out on dark skinned patients where scars are inflamed.
However, a potential hidden gem is Juvidex, where phase II clinical trials revealed it may help accelerate skin healing and reduce redness.
But here Renovo is taking a rather unconventional route to market by developing Juvidex as a cosmetic and a potential treatment for sunburn or for use after a skin peel.
‘We considered the data and decided we could get to market quicker and make more money by developing Juvidex as cosmetic rather than as a pharmaceutical.
‘The fact is you’d pay roughly the same price for either.
‘So we will partner with a company and are in discussions at present time. We believe a deal could be concluded soon.
‘It is likely to be a royalty on sales but the sales could be significant.
‘Our partner could have the cosmetic product on the market within a year of doing the deal.’
However as expected the phase I trial was unable to establish whether Juvista had any effect on scar reduction or the re-occurrence of the growth.
There are occasions where an early safety study of this kind will reveal signs of efficacy.
However many more do not. In Renovo’s case the outcome is hardly surprising as the trial was restricted to just 30 patients in the top dose.
‘We had to find out whether Juvista made the keloid worse,’ said chief executive Mark Ferguson.
‘The answer was definitely not. There are no safety issues at all. That was the whole purpose of the trial.
‘The implication of that is our entire programme remains on track and on schedule.’
Interesting as it is, this early work on keloids is of far less importance than the pivotal European phase III study on Juvista’s use after scar revision surgery.
Renovo has recruited 350 patients to the efficacy trial, and it is scheduled to report its findings in the first half of next year.
A positive result ought to be transformational for the group – though the market seems almost irrationally cautious about the prospects of the company and its lead product.
The current valuation of the firm is a little over £42 million. At the end of June Renovo held £56 million in cash.
And by the middle of next year, when the EU phase III trial has reported, the group has pledged to have at least £25-£30 million of that money left.
This is a very deliberate strategy of chief executive Ferguson and his team.
‘We want to make Renovo an attractive investment,’ he told Proactive Investors.
‘We want to create for the investor an asymmetric risk.
‘If you think the Juvista phase III trial is going to be positive, then it (the share price) should be multiples of where it is today.
‘If the phase III trial is a failure then basically there is more or less the cash value of the company in the share price that you have paid for.
‘The downside is minimal because there are still the other programmes and the cash.’
‘But I’m trying to put myself in the place of the investor here.’
The company has partnered with FTSE 100 drugs firm Shire (LON:SHP) to develop Juvista and exploit its commercial potential.
The deal could be worth as much as US$825 million in milestone payments and royalties and the company has already received US$125 million.
The next payment – a more modest sum of US$5 million – ought to come in the second half of next year, when Shire gets its clinical trials in the US underway.
The group will then receive a further US$25 million when it submits Juvista for approval to the US Food & Drug Administration, followed by a payment of between US$50 million and US$150 million on approval.
However, the terms of the deal have altered with Shire keeping the rights to develop and sell Juvista in the US, Canada and Mexico, but winning the option to licence it out to a third party.
In return Renovo has wrestled back the rights to the scarring treatment for the rest of the world.
This, Ferguson says, gives the company a great deal more flexibility than the original deal had allowed.
Renovo is yet to decide whether it will market and sell Juvista itself in Europe, or find a partner.
However the chief executive is adamant that outside the company’s home market, the partnership model works best.
‘It would be unreal of us to think we could sell directly into a country such as China,’ Ferguson said.
Juvista was discovered in the late 1980s as part of Ferguson’s work at Manchester University on cleft palate.
The emphasis of the work has so far been on scar revision, where a plastic surgeons attempts to improve the appearance of post-operative scarring.
However there are all sorts of potential alternative uses from varicose vein treatment to cosmetic surgery.
However, there have been two failures of Juvista – in mole removal and breast augmentation.
Ferguson is unperturbed and unsurprised by the setbacks. In neither case was the optimum dose used, he says.
Rightly the emphasis from an investors’ standpoint at least has been on the potentially ground-breaking Juvista.
But Renovo is not a one product company – far from it.
There is Adaprev, which is being developed to treat tendon scarring after injury that can lead to recurring pain and loss of movement in the affected digit.
Currently 44 patients are being recruited to the first of two trials which are required for Adaprev’s approval as a medical device.
The first trial will report in the second half of next year.
And there is Prevascar, where tests are being carried out on dark skinned patients where scars are inflamed.
However, a potential hidden gem is Juvidex, where phase II clinical trials revealed it may help accelerate skin healing and reduce redness.
But here Renovo is taking a rather unconventional route to market by developing Juvidex as a cosmetic and a potential treatment for sunburn or for use after a skin peel.
‘We considered the data and decided we could get to market quicker and make more money by developing Juvidex as cosmetic rather than as a pharmaceutical.
‘The fact is you’d pay roughly the same price for either.
‘So we will partner with a company and are in discussions at present time. We believe a deal could be concluded soon.
‘It is likely to be a royalty on sales but the sales could be significant.
‘Our partner could have the cosmetic product on the market within a year of doing the deal.’
DiamondCorp Botswana Drilling Unearths Encouraging Results
DiamondCorp (LON:DCP) this morning revealed that the J-05 kimberlite in Botswana shows similar characteristics to the diamond bearing volcanic rock at the nearby Jwaneng mine.
The discovery comes after the company sank five boreholes into the target area that intersected what the company termed “coherent kimberlite” at vertical depths of up to 218 metres.
Samples are now being shipped to Canada for analysis, while drilling will continue on J-05 to confirm the size of the DiamondCorp kimberlite.
However management will hope the grade and carat has more in common with Jwaneng, which is just 9 kilometres away.
The Debswana-owned operation is the richest diamond mine in the world on a revenue per tonne basis and produces up to 25 per cent of De Beers’ global production.
And Jwaneng’s grade and carat are five to ten times richer on a revenue per tonne basis than DiamonCorp’s Lace project.
Managing director Paul Loudon said: ‘We are pleased that J-05 is emerging as a kimberlite with the right geological features and potential to carry economic diamond grades.
‘We look forward to updating the market with results from the microdiamond analysis in about eight weeks time.’
The Botswana area was acquired via the ‘use it or lose it’ laws and DiamondCorp earn a 77.5 per cent share once it completes a definitive feasibility study on at least one of the kimberlites over a period of five years.
Of the five targets, the three most prospective were surveyed with ground gravity and magnetics last year.
However the company’s main focus currently is Lace, which was first mined early in the 20th century.
The Lace pipe has been drilled by the company to a depth of some 855 metres, with indications that there are 35 million tonnes of untapped kimberlite between the current 240 metre base level and 855 metres.
Around 500,000 carats are expected to extracted annually once Lace is fully up and running and this should produce a mine life of around 25 years.
During 2011 Loudon says the company will be mining at 13,000 tonnes per month while setting up the sub-level caving underground mine plan and refurbishing the existing vertical shaft, which will be used for hoisting and allow the decline to be used for men, materials and ventilation.
‘By the Q1 next year we will have accessed our resource at the 240-metre level. We will need to raise money in 2011 to bring production up to full scale of 1.2 million tonnes per annum by the end of 2011,’ Loudon said recently.
House broker Cenkos calculates that Lace would generate cash-flows of £3 million from 2012, rising to approximately £15 million from 2015 - assuming annual production of 230,000 carats from 2012 and 400,000 carats by 2015.
The discovery comes after the company sank five boreholes into the target area that intersected what the company termed “coherent kimberlite” at vertical depths of up to 218 metres.
Samples are now being shipped to Canada for analysis, while drilling will continue on J-05 to confirm the size of the DiamondCorp kimberlite.
At around two hectares, J-05 is on a similar scale to the company’s Lace mine diamond mine in South Africa.
The Debswana-owned operation is the richest diamond mine in the world on a revenue per tonne basis and produces up to 25 per cent of De Beers’ global production.
And Jwaneng’s grade and carat are five to ten times richer on a revenue per tonne basis than DiamonCorp’s Lace project.
Managing director Paul Loudon said: ‘We are pleased that J-05 is emerging as a kimberlite with the right geological features and potential to carry economic diamond grades.
‘We look forward to updating the market with results from the microdiamond analysis in about eight weeks time.’
The Botswana area was acquired via the ‘use it or lose it’ laws and DiamondCorp earn a 77.5 per cent share once it completes a definitive feasibility study on at least one of the kimberlites over a period of five years.
Of the five targets, the three most prospective were surveyed with ground gravity and magnetics last year.
However the company’s main focus currently is Lace, which was first mined early in the 20th century.
The Lace pipe has been drilled by the company to a depth of some 855 metres, with indications that there are 35 million tonnes of untapped kimberlite between the current 240 metre base level and 855 metres.
Around 500,000 carats are expected to extracted annually once Lace is fully up and running and this should produce a mine life of around 25 years.
During 2011 Loudon says the company will be mining at 13,000 tonnes per month while setting up the sub-level caving underground mine plan and refurbishing the existing vertical shaft, which will be used for hoisting and allow the decline to be used for men, materials and ventilation.
‘By the Q1 next year we will have accessed our resource at the 240-metre level. We will need to raise money in 2011 to bring production up to full scale of 1.2 million tonnes per annum by the end of 2011,’ Loudon said recently.
House broker Cenkos calculates that Lace would generate cash-flows of £3 million from 2012, rising to approximately £15 million from 2015 - assuming annual production of 230,000 carats from 2012 and 400,000 carats by 2015.
Tuesday, 7 September 2010
Gulfsands Petroleum and ADX assessing Lambouka-1 gas discovery potential
Gulfsands Petroleum (LON:GPX) and its joint venture partner ADX Energy (ASX:ADX), confirmed that the Lambouka-1 exploration well discovered two hydrocarbon bearing zones in the Aboid Formation. However technical problems relating to wellbore deterioration have raised questions over the joint venture’s next move.
ADX said the nature of the hydrocarbons is likely to comprise of gas and possibly condensate in the lower interval based on the hydrocarbon shows recorded from the cuttings while drilling and gas chromatography.
Due to technical reasons the gas shows were not as strong as encountered in the same Abiod interval in the nearby Dougga-1 discovery, but no carbon dioxide (CO2) was detected while drilling the Abiod Formation unlike in the Dougga-1 discovery, the company said.
As a result of ongoing drilling fluid losses and increasing well bore deterioration it has not been possible to safely recover fluid samples or pressure data from the Abiod formation.
The company said ongoing operations in the existing well bore have become increasingly difficult and the productivity of the reservoir from this well bore is very likely to have been adversely effected.
Consequently, this has diminished the operator’s ability to obtain representative flow rates from any drill stem test.
The joint venture is currently considering whether to suspend or plug and abandon Lambouka-1.
ADX noted that the Lambouka structure also has further up dip potential from the Lambouka–1 location.
It is therefore possible that a future bore hole trajectory for the lower section of the well could also test the up dip potential of the structure, together with the porous sandstones encountered in the lower part of the well.
The decision will depend on an assessment of whether a suspension and future re-entry of this well would provide the best opportunity to minimise rig time and maximise reservoir information to be acquired from a drill stem test of the Abiod Formation.
ADX said the results described are preliminary in nature and it will continue to interpret the data obtained from the Lambouka-1 well in conjunction with seismic data and provide further assessments of the potential of the Lambouka discovery.
Participants in the Lambouka-1 well are ADX 30% Operator, Gulfsands Petroleum Plc (LON: GPX) 30%, Carnavale Resources Ltd (ASX: CAV) 20%, XState Resources Ltd (PINK: XSTLF) 10% and PharmAust Limited (ASX:PAA) 10%.
ADX said the nature of the hydrocarbons is likely to comprise of gas and possibly condensate in the lower interval based on the hydrocarbon shows recorded from the cuttings while drilling and gas chromatography.
Due to technical reasons the gas shows were not as strong as encountered in the same Abiod interval in the nearby Dougga-1 discovery, but no carbon dioxide (CO2) was detected while drilling the Abiod Formation unlike in the Dougga-1 discovery, the company said.
As a result of ongoing drilling fluid losses and increasing well bore deterioration it has not been possible to safely recover fluid samples or pressure data from the Abiod formation.
The company said ongoing operations in the existing well bore have become increasingly difficult and the productivity of the reservoir from this well bore is very likely to have been adversely effected.
Consequently, this has diminished the operator’s ability to obtain representative flow rates from any drill stem test.
The joint venture is currently considering whether to suspend or plug and abandon Lambouka-1.
ADX noted that the Lambouka structure also has further up dip potential from the Lambouka–1 location.
It is therefore possible that a future bore hole trajectory for the lower section of the well could also test the up dip potential of the structure, together with the porous sandstones encountered in the lower part of the well.
The decision will depend on an assessment of whether a suspension and future re-entry of this well would provide the best opportunity to minimise rig time and maximise reservoir information to be acquired from a drill stem test of the Abiod Formation.
ADX said the results described are preliminary in nature and it will continue to interpret the data obtained from the Lambouka-1 well in conjunction with seismic data and provide further assessments of the potential of the Lambouka discovery.
Participants in the Lambouka-1 well are ADX 30% Operator, Gulfsands Petroleum Plc (LON: GPX) 30%, Carnavale Resources Ltd (ASX: CAV) 20%, XState Resources Ltd (PINK: XSTLF) 10% and PharmAust Limited (ASX:PAA) 10%.
Silence Therapeutics surges on news of takeover approach
Silence Therapeutics (LON:SLN)shares shot up this afternoon after the company confirmed that it has received an approach which may or may not lead to an offer for the company.
The gene-silencing biotech firm jumped almost 50% on London’s AIM market, to trade at an intraday high of 10.75p in late afternoon deals.
No financial terms were disclosed and the potential bidder was not named.
According to Silence, it possesses one of the world’s most comprehensive RNAi therapeutic platforms - comprised of proprietary delivery technologies, potent siRNA sequences and innovative siRNA structural features.
The company believes that these three areas are critical to building, protecting and commercialising RNAi therapeutics.
Silence has a number of partnerships with major pharmaceutical companies such as AstraZeneca (LON:AZN), Pfizer (NYSE:PFE), Quark Pharma and Dainippon Sumitomo (TYO:4506).
Last month, on 20th August, Silence shares received a boost as the company told investors that it could earn as much as US$65 million from a collaboration deal with Swiss giant Novartis (NYSE:NVS).
The focus of the study will be QPI-1002, an experimental kidney drug discovered by Silence, but licensed to American firm Quark.
The treatment is now being taken into phase II clinical trials.
The US$65 million is Silence’s slice of a potential $680 million windfall of potential milestone payments and royalties negotiated by Quark.
Quark will receive US$10 million up front. However it is not known how much of this sum will trickle down to Silence.
The gene-silencing biotech firm jumped almost 50% on London’s AIM market, to trade at an intraday high of 10.75p in late afternoon deals.
No financial terms were disclosed and the potential bidder was not named.
According to Silence, it possesses one of the world’s most comprehensive RNAi therapeutic platforms - comprised of proprietary delivery technologies, potent siRNA sequences and innovative siRNA structural features.
The company believes that these three areas are critical to building, protecting and commercialising RNAi therapeutics.
Silence has a number of partnerships with major pharmaceutical companies such as AstraZeneca (LON:AZN), Pfizer (NYSE:PFE), Quark Pharma and Dainippon Sumitomo (TYO:4506).
Last month, on 20th August, Silence shares received a boost as the company told investors that it could earn as much as US$65 million from a collaboration deal with Swiss giant Novartis (NYSE:NVS).
The focus of the study will be QPI-1002, an experimental kidney drug discovered by Silence, but licensed to American firm Quark.
The treatment is now being taken into phase II clinical trials.
The US$65 million is Silence’s slice of a potential $680 million windfall of potential milestone payments and royalties negotiated by Quark.
Quark will receive US$10 million up front. However it is not known how much of this sum will trickle down to Silence.
Kopane Diamond’s shareholders vote in favour of Firestone combination
The combination of Firestone Diamonds (LON:FDI) and Kopane Diamond Development (LON:KDD) is set to go ahead after Kopane shareholders voted in favour of the deal earlier today.
The news follows Friday’s approval by Firestone shareholders at their general meeting.
With both sets of shareholders now having approved the deal, Kopane’s shares will cease to trade on London’s AIM market on 29 September, and the enlarged group’s shares will be admitted the following day.
Back in July, Firestone made a surprise bid for rival Kopane.
Kopane’s board had unanimously recommended the all-paper deal that valued the shares at 17 pence each, or £51 million, at the time of the bid.
This represented a 36 per cent premium to the previous day’s closing price.
The pair said the deal would give the enlarged group a more "diversified portfolio of production, development and exploration stage diamond projects".
Last week, the company's shares jumped over 15% following an upbeat statement, which highlighted that the company has made significant progress with the development of the BK11 kimberlite, and production is ahead of schedule.
Following the Phase 1 commissioning in July, the BK11 plant is currently running with the average throughput of 185 tonnes per hour (tph), 23% ahead of the initial 150tph target, the company announced.
The mine began continuous operations at the beginning of August and diamond concentrates are now being shipped from BK11 to the diamond sorting facility in Gaborone.
Firestone described initial diamond recoveries as ‘very encouraging’ and highlighted the largest diamond recovery to date from BK11 - a high quality 13.74 carat diamond. The find increases the raw value of diamonds from bulk sample excavation by 68% from $149/carat to over $250/carat, and as such Firestone expects a significant increase to BK11’s modelled value.
Based on the better-than-expected performance of the Phase 1 plant, Firestone believes it will comfortably exceeded BK11’s 1.5 million tonnes per annum (Mtpa) production target capacity once Phase 2 has been completed in Q4 2010.
The news follows Friday’s approval by Firestone shareholders at their general meeting.
With both sets of shareholders now having approved the deal, Kopane’s shares will cease to trade on London’s AIM market on 29 September, and the enlarged group’s shares will be admitted the following day.
Back in July, Firestone made a surprise bid for rival Kopane.
Kopane’s board had unanimously recommended the all-paper deal that valued the shares at 17 pence each, or £51 million, at the time of the bid.
This represented a 36 per cent premium to the previous day’s closing price.
The pair said the deal would give the enlarged group a more "diversified portfolio of production, development and exploration stage diamond projects".
Last week, the company's shares jumped over 15% following an upbeat statement, which highlighted that the company has made significant progress with the development of the BK11 kimberlite, and production is ahead of schedule.
Following the Phase 1 commissioning in July, the BK11 plant is currently running with the average throughput of 185 tonnes per hour (tph), 23% ahead of the initial 150tph target, the company announced.
The mine began continuous operations at the beginning of August and diamond concentrates are now being shipped from BK11 to the diamond sorting facility in Gaborone.
Firestone described initial diamond recoveries as ‘very encouraging’ and highlighted the largest diamond recovery to date from BK11 - a high quality 13.74 carat diamond. The find increases the raw value of diamonds from bulk sample excavation by 68% from $149/carat to over $250/carat, and as such Firestone expects a significant increase to BK11’s modelled value.
Based on the better-than-expected performance of the Phase 1 plant, Firestone believes it will comfortably exceeded BK11’s 1.5 million tonnes per annum (Mtpa) production target capacity once Phase 2 has been completed in Q4 2010.
Avalon Rare Metals Interview Transcript with Don Bubar, President and CEO
Harry Norman: Hello, this is Harry Norman for Proactive Investors and welcome to another Proactive audio interview. Today is the 17th August 2010 and I’m talking with Don Bubar, President and CEO of Avalon Rare Metals. Listed on the TSX metals and mining sector. Stock ticker, AVL. Share price, $2.67 Canadian. Market cap, $210.9 million Canadian. Web address, www.avalonraremetals.com. Don, thank you very much for joining us for this interview.
Don Bubar: Thanks, Harry. Pleasure to be back.
What's been happening in the world of rare earths since we last spoke, back in 2009?
A lot’s been happening, Harry. Demand is up, prices are up, supplies are more constrained. That’s been one of the key factors in the last sort of while that’s attracted a lot of attention in the media.
Of course China’s the dominant supplier of rare earths to the world and China has recently announced further reductions in the export quotas; the material they make available for export to consumers around the world. The recent announcement was quite a substantial reduction by some 64% for the balance of 2010.
So, this caused quite a bit of concern out there amongst consumers around the world, certainly about security of supply going forward and has also had the effect of pushing up prices in China.
We’re seeing substantially higher prices than where they were in 2009, and they’ve gone up some 35% over the first six months of the year and even more over the last month or so. Demand continues to outstrip supply; supplies are constrained, creating an even better opportunity for new suppliers to emerge in other parts of the world.
How significant is it that Avalon Rare Metals 100% owned Nechalacho Rare Earth Element Deposit at Thor Lake in Canada, is the largest rare earth resource outside China? It’s very significant to our customers who want to know, once we achieve commercial production and start producing product for them, that we’ll be around in the longer term, in other words we’re not at risk of running out of resources and product going forward.
Most rare earth resources tend to be fairly large, what's really key to the economics is the grade or the concentration at which the rare earth elements occur in that or under ground. At Nechalacho we’re blessed with a relatively high grade and also a relatively favourable distribution of the heavy rare earths verses the light rare earths.
As you will recall, Harry, most deposits tend to be dominated by the light rare earths, the heavy rare earths occurring in only trace amounts. So, that makes them scarcer as a whole and they tend to attract much higher prices. At Nechalacho, our resource there contains over 20% of the heavier rare earths, making for a more valuable ore in the ground and ultimately, we believe, a more profitable operation going forward.
What are your thoughts on the results of the 2010 winter drill program at Nechalacho, Don?
It’s a very large program, we did over 11,000 metres of drilling and I had a couple of main objectives. The main one was to do what's called infill drilling, or definition drilling, where we drill between earlier holes to prove up the continuity of resource between holes and I was very successful in that regard. There are very few gaps in the mineralisation and it’s remarkably consistent and continuous over the area that we have explored to date.
This is allowing us to increase the confidence level on the resource from a mine development planning standpoint. Effectively we drilled a number of holes outside of the area where we had already drilled, to see if there might be further extensions of the zone outside of the known area.
We were successful in a number of those holes and intersecting the zone, well outside of the previously drilled area, and demonstrating considerable potential for further expansion of the resource, further additions to the existing resource inventory. So, it confirms that it is indeed a very large deposit, with room for further growth and excellent continuity.
We will be reporting on how those results impact on the resource before too long here. We are now compiling all of the analytical data that was reported earlier into our block model and will be able to report to the market how has impacted on our resource estimates, so hopefully within the next few weeks.
Please will you talk investors through the pre-feasibility study for the Nechalacho deposit, published by Avalon Rare Metals in June?
The pre-feasibility study was an important milestone in the advancement of this project. It was the first full blown analysis of how this project would develop and the first analysis on the costs and revenues and profitability of it.
We were really pleased that we were able to report to the market a positive result and it was confirmed to be an attractive investment opportunity. Furthermore, as we've discussed since then, we were able to readily identify lots of opportunities for further optimisation of the project going forward.
As most of your listeners will know, from a pre-feasibility level analysis tends to be very conservative analysis. In other words you apply the most conservative assumptions possible on costs and revenues and to see if it stands up under a very conservative scenarios, as with positive economics, which indeed this project did. Given those conservative assumptions we see lots of room for optimisation here.
For example, because of the increasing demand for the rare earths now we see the opportunity to increase the production rate in the early years, which would generally increase revenues and improve the overall profitability. We're seeing areas with much higher grade or higher valued rock in the ground, than any new mining operation.
Those higher grades areas tend to be mined first to increase the revenues in the early years as well, which also positively impacts on the economics, assurance, the payback period on capital costs etc.
There are lots of opportunities here to benefit from higher prices and make this an even more attractive opportunity once we complete our bankable feasibility study, which is the next major step moving forward in the project.
How are the prices of rare earth metals holding up and where do you think they're heading, Don?
Well, they're holding up really well. As I said earlier, they've actually increased quite a bit over the last six months as the demand continues to outstrip supply. Virtually everyone is forecasting a higher price still in the short to medium term, as it's going to take time before new production can come on stream to bring that market back into balance.
Prospects are for further constraints on supply out of China, that’s likely to put further upward pressure on prices over the short to medium term. Really, I think, most people believe are catching up to where they probably should be.
What is Avalon Rare Metals’ financial situation, Don?
It's pretty good, we have about $8 million in the treasury right now, more than adequate for our current needs although we will need to access additional capital before too long to ensure we are adequately funded to complete our bankable feasibility study.
Fortunately market conditions appear favourable for attracting additional capital. Recently Molycorp Minerals, the US producer or the Mountain Pass mine in California, completed a successful initial public offering and raised some $390 million in equity financing to allow them to refurbish their facility there and restart full production within the next couple of years.
It demonstrates there's a lot of interest from investors around the world in the rare earths business and opportunities for other emerging producers, like us, to attract capital for good projects like our Nechalacho is going forward.
What can investors expect from Avalon Rare Metals over the next 12 to 18 months, Don?
We'll have a steady stream of news as the project advances here. Coming up next will be an announcement on the impact of our recent drilling through the winter on the resources in the deposit, or an updated resource estimate for the deposit should be available to report within the next few weeks. We are drilling still there now, so there will be additional results from the summer drilling program to reports on through the fall.
We're also starting our pilot plant work sample, we’re we’ve got bulk sample ready to start processing, to test the process flow sheet that we developed last year and start producing some of the actual products. So, we’ll be reporting on the progress of that work as it advances over the next 6 to 12 months.
Lastly we've already initiated our environmental impact assessment, a key step in securing our operating permits going forward and we’ll be reporting on the progress on that front as well, as that advances over the next 12 months.
http://www.proactiveinvestors.co.uk/companies/news/20760/avalon-rare-metals-interview-transcript-with-don-bubar-president-and-ceo-20760.html
Don Bubar: Thanks, Harry. Pleasure to be back.
What's been happening in the world of rare earths since we last spoke, back in 2009?
A lot’s been happening, Harry. Demand is up, prices are up, supplies are more constrained. That’s been one of the key factors in the last sort of while that’s attracted a lot of attention in the media.
Of course China’s the dominant supplier of rare earths to the world and China has recently announced further reductions in the export quotas; the material they make available for export to consumers around the world. The recent announcement was quite a substantial reduction by some 64% for the balance of 2010.
So, this caused quite a bit of concern out there amongst consumers around the world, certainly about security of supply going forward and has also had the effect of pushing up prices in China.
We’re seeing substantially higher prices than where they were in 2009, and they’ve gone up some 35% over the first six months of the year and even more over the last month or so. Demand continues to outstrip supply; supplies are constrained, creating an even better opportunity for new suppliers to emerge in other parts of the world.
How significant is it that Avalon Rare Metals 100% owned Nechalacho Rare Earth Element Deposit at Thor Lake in Canada, is the largest rare earth resource outside China? It’s very significant to our customers who want to know, once we achieve commercial production and start producing product for them, that we’ll be around in the longer term, in other words we’re not at risk of running out of resources and product going forward.
Most rare earth resources tend to be fairly large, what's really key to the economics is the grade or the concentration at which the rare earth elements occur in that or under ground. At Nechalacho we’re blessed with a relatively high grade and also a relatively favourable distribution of the heavy rare earths verses the light rare earths.
As you will recall, Harry, most deposits tend to be dominated by the light rare earths, the heavy rare earths occurring in only trace amounts. So, that makes them scarcer as a whole and they tend to attract much higher prices. At Nechalacho, our resource there contains over 20% of the heavier rare earths, making for a more valuable ore in the ground and ultimately, we believe, a more profitable operation going forward.
What are your thoughts on the results of the 2010 winter drill program at Nechalacho, Don?
It’s a very large program, we did over 11,000 metres of drilling and I had a couple of main objectives. The main one was to do what's called infill drilling, or definition drilling, where we drill between earlier holes to prove up the continuity of resource between holes and I was very successful in that regard. There are very few gaps in the mineralisation and it’s remarkably consistent and continuous over the area that we have explored to date.
This is allowing us to increase the confidence level on the resource from a mine development planning standpoint. Effectively we drilled a number of holes outside of the area where we had already drilled, to see if there might be further extensions of the zone outside of the known area.
We were successful in a number of those holes and intersecting the zone, well outside of the previously drilled area, and demonstrating considerable potential for further expansion of the resource, further additions to the existing resource inventory. So, it confirms that it is indeed a very large deposit, with room for further growth and excellent continuity.
We will be reporting on how those results impact on the resource before too long here. We are now compiling all of the analytical data that was reported earlier into our block model and will be able to report to the market how has impacted on our resource estimates, so hopefully within the next few weeks.
Please will you talk investors through the pre-feasibility study for the Nechalacho deposit, published by Avalon Rare Metals in June?
The pre-feasibility study was an important milestone in the advancement of this project. It was the first full blown analysis of how this project would develop and the first analysis on the costs and revenues and profitability of it.
We were really pleased that we were able to report to the market a positive result and it was confirmed to be an attractive investment opportunity. Furthermore, as we've discussed since then, we were able to readily identify lots of opportunities for further optimisation of the project going forward.
As most of your listeners will know, from a pre-feasibility level analysis tends to be very conservative analysis. In other words you apply the most conservative assumptions possible on costs and revenues and to see if it stands up under a very conservative scenarios, as with positive economics, which indeed this project did. Given those conservative assumptions we see lots of room for optimisation here.
For example, because of the increasing demand for the rare earths now we see the opportunity to increase the production rate in the early years, which would generally increase revenues and improve the overall profitability. We're seeing areas with much higher grade or higher valued rock in the ground, than any new mining operation.
Those higher grades areas tend to be mined first to increase the revenues in the early years as well, which also positively impacts on the economics, assurance, the payback period on capital costs etc.
There are lots of opportunities here to benefit from higher prices and make this an even more attractive opportunity once we complete our bankable feasibility study, which is the next major step moving forward in the project.
How are the prices of rare earth metals holding up and where do you think they're heading, Don?
Well, they're holding up really well. As I said earlier, they've actually increased quite a bit over the last six months as the demand continues to outstrip supply. Virtually everyone is forecasting a higher price still in the short to medium term, as it's going to take time before new production can come on stream to bring that market back into balance.
Prospects are for further constraints on supply out of China, that’s likely to put further upward pressure on prices over the short to medium term. Really, I think, most people believe are catching up to where they probably should be.
What is Avalon Rare Metals’ financial situation, Don?
It's pretty good, we have about $8 million in the treasury right now, more than adequate for our current needs although we will need to access additional capital before too long to ensure we are adequately funded to complete our bankable feasibility study.
Fortunately market conditions appear favourable for attracting additional capital. Recently Molycorp Minerals, the US producer or the Mountain Pass mine in California, completed a successful initial public offering and raised some $390 million in equity financing to allow them to refurbish their facility there and restart full production within the next couple of years.
It demonstrates there's a lot of interest from investors around the world in the rare earths business and opportunities for other emerging producers, like us, to attract capital for good projects like our Nechalacho is going forward.
What can investors expect from Avalon Rare Metals over the next 12 to 18 months, Don?
We'll have a steady stream of news as the project advances here. Coming up next will be an announcement on the impact of our recent drilling through the winter on the resources in the deposit, or an updated resource estimate for the deposit should be available to report within the next few weeks. We are drilling still there now, so there will be additional results from the summer drilling program to reports on through the fall.
We're also starting our pilot plant work sample, we’re we’ve got bulk sample ready to start processing, to test the process flow sheet that we developed last year and start producing some of the actual products. So, we’ll be reporting on the progress of that work as it advances over the next 6 to 12 months.
Lastly we've already initiated our environmental impact assessment, a key step in securing our operating permits going forward and we’ll be reporting on the progress on that front as well, as that advances over the next 12 months.
http://www.proactiveinvestors.co.uk/companies/news/20760/avalon-rare-metals-interview-transcript-with-don-bubar-president-and-ceo-20760.html
Strategic Natural Resources emphasises that Sunday Express info is already public
Whilst acknowledging the significant rise in its share price, Strategic Natural Resources (LON:SNRP) (‘SNR’) emphasised that the information in an article in yesterday’s Sunday Express was already in the public domain.
“The board of SNR confirm that there is no information contained within the article that is not currently available in the public domain.”
On London’s AIM market, the company’s shares jumped 35% today, and were trading at 13.5p per share in early afternoon deals. The Sunday Express article was published on 5 September, and the SNR noted that the article mentions the company's recently updated CPR (Competent Persons Report) and ongoing Export Feasibility Assessment Study. (21 July 2010 - Strategic Natural Resources ups Elitheni coal resource by 55% to 150.3Mt)
The article also discussed an opportunity for SNR to supply coal to the export and South African power sector.
“The board of SNR confirm that there is no information contained within the article that is not currently available in the public domain.”
On London’s AIM market, the company’s shares jumped 35% today, and were trading at 13.5p per share in early afternoon deals. The Sunday Express article was published on 5 September, and the SNR noted that the article mentions the company's recently updated CPR (Competent Persons Report) and ongoing Export Feasibility Assessment Study. (21 July 2010 - Strategic Natural Resources ups Elitheni coal resource by 55% to 150.3Mt)
The article also discussed an opportunity for SNR to supply coal to the export and South African power sector.
Rockhopper Exploration begins flow test on Sea Lion oil discovery well in Falklands
Rockhopper Exploration (LON:RKH) has announced that a flow test on the Sea Lion 14/10-2 offshore discovery well in the Falkland Islands is now underway. The operations are expected to take 30 days.
Rockhopper noted that testing operations could be more sensitive to weather conditions than standard drilling operations.
The flow test is expected to give an early indication of the production potential of the reservoir sands and will be a key part of the planning process required to move forward to full appraisal and possible development programmes.
“From a volume perspective, Rockhopper’s Sea Lion discovery is commercial. However, commerciality also depends on achieving commercial flow rates,” said the broker.
The Sea Lion well has so far been the sole success of the closely followed drilling campaign in the Falklands. Analysis performed on the well in June showed that it had discovered medium gravity oil.
The analysis of the discovery confirmed the first contingent resource in the Falklands, and upped the recoverable resource estimates from 170 mmbbls (million barrels) to 242 mmbbls.
Rockhopper has recently plugged and abandoned the Ernest 26/6-1 exploration well, which provided to be a dry hole after all logging runs were completed.
The wider Falklands play is made up of two separate basins, the North basin and the South basin. Rockhopper and Desire Petroleum (LON:DES) have been drilling their interests in the North basin, and Borders & Southern (LON:BOR) and Falkland Oil & Gas (LON:FOGL) have prospective interests in the South Basin.
Rockhopper noted that testing operations could be more sensitive to weather conditions than standard drilling operations.
The flow test is expected to give an early indication of the production potential of the reservoir sands and will be a key part of the planning process required to move forward to full appraisal and possible development programmes.
Broker Westhouse called the flow test an important step in the de-risking of Sea Lion.
The Sea Lion well has so far been the sole success of the closely followed drilling campaign in the Falklands. Analysis performed on the well in June showed that it had discovered medium gravity oil.
The analysis of the discovery confirmed the first contingent resource in the Falklands, and upped the recoverable resource estimates from 170 mmbbls (million barrels) to 242 mmbbls.
Rockhopper has recently plugged and abandoned the Ernest 26/6-1 exploration well, which provided to be a dry hole after all logging runs were completed.
The wider Falklands play is made up of two separate basins, the North basin and the South basin. Rockhopper and Desire Petroleum (LON:DES) have been drilling their interests in the North basin, and Borders & Southern (LON:BOR) and Falkland Oil & Gas (LON:FOGL) have prospective interests in the South Basin.
Solomon Capital offer for Metals Exploration becomes wholly unconditional
Solomon Capital has today announced that the acceptance condition to its mandatory cash offer for Metals Exploration (LON:MTL) has been satisfied and the offer was now fully unconditional.
The offer, which was made on 23 July, valued the company at £35.76 million, or 13 pence per share.
The acceptance condition was the only condition to the offer for the share capital of Metals Exploration not already owned by Solomon.
Guernsey incorporated Solomon Capital was established in December 2008, as an investment vehicle for property millionaire Christian Candy. The mandatory offer was triggered by a transaction for a single share, which took Solomon’s total associated holdings to 44.1% of the issued share capital.
Assuming a successful completion of the takeover, Solomon intends to continue working with Metals Exploration’s existing management team, to secure appropriate funding the company’s Runruno mine development in the Philippines.
Runruno has a JORC-compliant resource of 1.42 Moz of gold and 25.6 Mlb (million pounds) of molybdenum.
Metals Exploration has confirmed an independently verified proven & probable mining reserve consisting of 780,000 oz gold and secured an environmental compliance certificate in March 2010.
The results of feasibility study of Runruno confirmed the viability of a project producing an average of 96,700 oz of gold per annum over 10.4 years with an estimated average operating cost of US$477/oz not including potential molybdenum credits.
In late August, Solomon Capital provided Metals Exploration with a £2 million ‘on-demand’ short-term credit facility.
The offer, which was made on 23 July, valued the company at £35.76 million, or 13 pence per share.
The acceptance condition was the only condition to the offer for the share capital of Metals Exploration not already owned by Solomon.
The total number of shares in Metals Exploration held by Solomon together with those under acceptances now stands at 145.6 million representing 53.97% of the company.
Assuming a successful completion of the takeover, Solomon intends to continue working with Metals Exploration’s existing management team, to secure appropriate funding the company’s Runruno mine development in the Philippines.
Runruno has a JORC-compliant resource of 1.42 Moz of gold and 25.6 Mlb (million pounds) of molybdenum.
Metals Exploration has confirmed an independently verified proven & probable mining reserve consisting of 780,000 oz gold and secured an environmental compliance certificate in March 2010.
The results of feasibility study of Runruno confirmed the viability of a project producing an average of 96,700 oz of gold per annum over 10.4 years with an estimated average operating cost of US$477/oz not including potential molybdenum credits.
In late August, Solomon Capital provided Metals Exploration with a £2 million ‘on-demand’ short-term credit facility.
Telit Communications expects H1 results ahead of expectations, Astaire to revise forecasts
Telit Communications’ (LON:TCM) announced that it will report first half results on September 8, an thet they are expected to be ahead of market expectations.
In a note published in the wake of Telits short statement today, Astaire Securities will revise its forecasts for the group following the release of their interims.
In a trading update released in late June, Telit said it expected revenues of US56 million, which would mark an improvement of over 50% compared to H1 2009.
In the June update, Telit also told investors it would resolve the component shortage that hindered its performance in the first half.
The machine-2-machine (M2M) technology specialist has been gaining sales momentum for its range of machine-to-machine M2M communications modules in recent months. The company landed a new contract in May, to supply M2M modules for new Audi infotainment systems.
And significantly, in April, its Wireless Solutions subsidiary reached a major sales milestone with the delivery of its two-millionth GE864 module. The GE864 models are suitable for use in large-volume applications in the telemetry and telematics industries, whilst the extra-rugged GE864-Auto version allows the integration into vehicles and other applications.
Astaire has previously stated that the ongoing consolidation in the sector was favourable to Telit with the recent acquisition of Cinterion Wireless Modules by Gemalt showing the attraction of the M2M market.
In July, Telit established a commercial partnership with France Telecom's Orange Business Services unit, under which Telit will distribute Orange's complete range of M2M solutions on the French market, by adding them to its own modules.
Shares in Telit rose nearly 6% on today's update.
In a note published in the wake of Telits short statement today, Astaire Securities will revise its forecasts for the group following the release of their interims.
In a trading update released in late June, Telit said it expected revenues of US56 million, which would mark an improvement of over 50% compared to H1 2009.
Astaire said that today’s update suggested more progress and it would publish revised forecasts after the results are released on September 8.
The machine-2-machine (M2M) technology specialist has been gaining sales momentum for its range of machine-to-machine M2M communications modules in recent months. The company landed a new contract in May, to supply M2M modules for new Audi infotainment systems.
And significantly, in April, its Wireless Solutions subsidiary reached a major sales milestone with the delivery of its two-millionth GE864 module. The GE864 models are suitable for use in large-volume applications in the telemetry and telematics industries, whilst the extra-rugged GE864-Auto version allows the integration into vehicles and other applications.
Astaire has previously stated that the ongoing consolidation in the sector was favourable to Telit with the recent acquisition of Cinterion Wireless Modules by Gemalt showing the attraction of the M2M market.
In July, Telit established a commercial partnership with France Telecom's Orange Business Services unit, under which Telit will distribute Orange's complete range of M2M solutions on the French market, by adding them to its own modules.
Shares in Telit rose nearly 6% on today's update.
Avia Health Informatics restructuring to boost international growth plans
Avia Health Informatics (LON:AVIA)told investors that it is reorganising its group structure to reflect its international growth strategy. The reorganisation is designed to strengthen Avia’s operational management and to facilitate its international growth plans – which focuses on the Odyssey software suite.
As part of the restructuring plan, the company has expanded its international sales team.
Meanwhile at the UK-based subsidiary Plain Healthcare, UK operations director Tim Morris has been promoted to managing director. Additionally, Aviva plans to centralise its marketing, finance and administrative functions from North Wales to its new head office West of London.
"The board believes that by centralising the operational functions of the company it will be better positioned to manage its existing UK operations and take advantage of international opportunities as they present themselves,” Avia chairman Barry Giddings commented.
Internationally, Avia has appointed a new American vice president of sales, with Andrew Jobson taking the position on 1 November 2010. Giddings highlighted that Florida-based Jobson will help Avia penetrate the US market in the short to medium term.
Elsewhere Plain Healthcare’s former international business director, Chris Coyne, will also join Avia’s international team as the regional director of sales for Europe, Africa, India, Russia and the Middle-East. Coyne will take on the position immediately, and he will be based at Avia's UK head office.
Through its ‘International Growth Strategy’ the company aims to reduce its dependence on the UK market and focus it attention on major international growth markets specifically the emerging markets in the Far East and the Americas.
According to Avia, the Odyssey software products ‘promise to revolutionise the way people receive health advice’. The ‘clinical decision’ systems can be used for self-assessment on a touch screen device, or accessed via the internet by clinicians working over the telephone or directly with the patient.
Avia joined London’s AIM market in November 2009, following a reverse takeover of The Plain Software Company.
As part of the restructuring plan, the company has expanded its international sales team.
Meanwhile at the UK-based subsidiary Plain Healthcare, UK operations director Tim Morris has been promoted to managing director. Additionally, Aviva plans to centralise its marketing, finance and administrative functions from North Wales to its new head office West of London.
"The board believes that by centralising the operational functions of the company it will be better positioned to manage its existing UK operations and take advantage of international opportunities as they present themselves,” Avia chairman Barry Giddings commented.
Internationally, Avia has appointed a new American vice president of sales, with Andrew Jobson taking the position on 1 November 2010. Giddings highlighted that Florida-based Jobson will help Avia penetrate the US market in the short to medium term.
Elsewhere Plain Healthcare’s former international business director, Chris Coyne, will also join Avia’s international team as the regional director of sales for Europe, Africa, India, Russia and the Middle-East. Coyne will take on the position immediately, and he will be based at Avia's UK head office.
Through its ‘International Growth Strategy’ the company aims to reduce its dependence on the UK market and focus it attention on major international growth markets specifically the emerging markets in the Far East and the Americas.
According to Avia, the Odyssey software products ‘promise to revolutionise the way people receive health advice’. The ‘clinical decision’ systems can be used for self-assessment on a touch screen device, or accessed via the internet by clinicians working over the telephone or directly with the patient.
Avia joined London’s AIM market in November 2009, following a reverse takeover of The Plain Software Company.
Synchronica's Costa Rican deal vindicates strategy
Costa Rican mobile phone firm Instituto Costarricense de Electricidad (ICE) is launching a push email service using the Synchronica (LON:SYNC) Mobile Gateway platform. The service will be provided free of charge to subscribers using ICE’s Accelera webmail service and GPRS data subscribers.
Financial terms of the deal were not disclosed.
Applications such as mobile email are proving a valuable weapon in the battle to retain customers as well as improving revenue per user.
Synchronica boss Carsten Brinkschulte explained: "Mobile operators are looking at data services to shore up declining revenues caused by falling voice tariffs.
“We are finding that a growing number of mobile operators from Africa, Asia, Eastern Europe and Latin America are turning to Synchronica Mobile Gateway as a solution.”
This is a point borne out by research by sector watchers such as Nick Jotischky, principal analyst at Informa Telecoms & Media.
He said mobile non-voice services, such as mobile email, continue to grow and becoming more important to the strategy of operators in areas such as Latin America. “This latest contract win for Synchronica with its 'mobile email for all' solution is a case in point,” he added.
However for a service such as push email to work it must be affordable and to work on any handset, from high-end smartphones down to entry-level devices.
Oscar Arias, director of the Services Division at ICE, said: “Synchronica's solution ticked both boxes and we're excited to be launching our cost-effective Syncronizate push Email and mobile synchronization service to all of our subscribers.”
Synchronica is aiming to establish a very big presence in the developing world with its flagship product, Mobile Gateway, which turns emails into SMS format that can be read on any phone from high-end touch-screens right down to throwaways.
The acquisition of Canada’s iseemedia, which completed at the end of last month, gives Synchronica access to additional technology that streams attachments to mobiles.
Mobile Gateway is cheap and easy to install - and tailor-made for the emerging markets.
Demand for mobile telephony and the next-generation applications might be booming, but costs must be kept low.
“You will find very few smart-phones in these countries,” said Brinkschulte in a recent interview with Proactive Investors.
“It is a very different demographic where mass market handsets and US$20 dump phones continue to dominate.
“Our Mobile Gateway works with Smartphones, but more importantly, also with mass market phones and even with dump phones. Most of our competitor products don’t work with the entry level phones.”
“(The developing economies) are the largest and fasted growing market and our product has a unique selling point in those regions.
“We think the concept of low value but high volume is a very compelling commercial strategy.”
The iseemedia deal works on a number of levels for Synchronica. It broadens the product portfolio with the document streaming software and it also gives the enlarged group a very big toe-hold in India, where the iseemedia has negotiated agreements with local giants Tata and Reliance, who between them have a 140 million-strong customer base.
Add in Synchronica’s operator customers (there are 40 in total with 660 million end-users) and you have and addressable market of more than 800 million potential users of the company’s products.
Many of these tie-ups are licence agreements, though Brinkschulte says a number of the later contracts have been negotiated on a ‘recurring revenue basis’, which simply means the firm receives a monthly subscription fee.
With the latest acquisition bedding down, the City will want to see Synchronica convert this promising strategy into profits.
The first half of the year was a good start, with the group posting revenues of £3.4 million, which puts it on course for annual sales of around £9 million, according to the latest analysts’ forecasts.
Broker Equity Development predicts the company will make a maiden £1.5 million profit in 2012.
Financial terms of the deal were not disclosed.
Applications such as mobile email are proving a valuable weapon in the battle to retain customers as well as improving revenue per user.
Synchronica boss Carsten Brinkschulte explained: "Mobile operators are looking at data services to shore up declining revenues caused by falling voice tariffs.
“We are finding that a growing number of mobile operators from Africa, Asia, Eastern Europe and Latin America are turning to Synchronica Mobile Gateway as a solution.”
This is a point borne out by research by sector watchers such as Nick Jotischky, principal analyst at Informa Telecoms & Media.
He said mobile non-voice services, such as mobile email, continue to grow and becoming more important to the strategy of operators in areas such as Latin America. “This latest contract win for Synchronica with its 'mobile email for all' solution is a case in point,” he added.
However for a service such as push email to work it must be affordable and to work on any handset, from high-end smartphones down to entry-level devices.
Oscar Arias, director of the Services Division at ICE, said: “Synchronica's solution ticked both boxes and we're excited to be launching our cost-effective Syncronizate push Email and mobile synchronization service to all of our subscribers.”
Synchronica is aiming to establish a very big presence in the developing world with its flagship product, Mobile Gateway, which turns emails into SMS format that can be read on any phone from high-end touch-screens right down to throwaways.
The acquisition of Canada’s iseemedia, which completed at the end of last month, gives Synchronica access to additional technology that streams attachments to mobiles.
Mobile Gateway is cheap and easy to install - and tailor-made for the emerging markets.
Demand for mobile telephony and the next-generation applications might be booming, but costs must be kept low.
“You will find very few smart-phones in these countries,” said Brinkschulte in a recent interview with Proactive Investors.
“It is a very different demographic where mass market handsets and US$20 dump phones continue to dominate.
“Our Mobile Gateway works with Smartphones, but more importantly, also with mass market phones and even with dump phones. Most of our competitor products don’t work with the entry level phones.”
“(The developing economies) are the largest and fasted growing market and our product has a unique selling point in those regions.
“We think the concept of low value but high volume is a very compelling commercial strategy.”
The iseemedia deal works on a number of levels for Synchronica. It broadens the product portfolio with the document streaming software and it also gives the enlarged group a very big toe-hold in India, where the iseemedia has negotiated agreements with local giants Tata and Reliance, who between them have a 140 million-strong customer base.
Add in Synchronica’s operator customers (there are 40 in total with 660 million end-users) and you have and addressable market of more than 800 million potential users of the company’s products.
Many of these tie-ups are licence agreements, though Brinkschulte says a number of the later contracts have been negotiated on a ‘recurring revenue basis’, which simply means the firm receives a monthly subscription fee.
With the latest acquisition bedding down, the City will want to see Synchronica convert this promising strategy into profits.
The first half of the year was a good start, with the group posting revenues of £3.4 million, which puts it on course for annual sales of around £9 million, according to the latest analysts’ forecasts.
Broker Equity Development predicts the company will make a maiden £1.5 million profit in 2012.
African Eagle’s Zanzui nickel project may offer economies of scale for nearby Dutwa
African Eagle Resources’ (LON:AFE) has revealed ‘very favourable’ drilling results from the Zanzui project, which potentially offer economies of scale for the development of the nearby Dutwa nickel project, in Tanzania.
At Zanzui the drilling results indicate significant nickel and cobalt intersections, the company said. The highlights ranged from 39-42m with nickel grades between 0.9 and 1.5%, and 27-36m with cobalt grades between 0.14 and 0.30%.
“The nickel grades are marginally lower than at Dutwa, but the cobalt grades are significantly higher,” African Eagle MD Mark Parker commented.
“Potentially, this offers economies of scale for the development of Dutwa and augurs well for the long term sustainability of African Eagle's nickel activities in this promising region."
Zanzui is located just 50km south of African Eagle’s flagship Dutwa nickel project, which has a total contained resource of 845,000 tonnes of nickel equivalent - 806,000t nickel & 30,000t cobalt - after a recent upgrade in June.
African Eagle drilled 49 reverse circulation hole, averaging depths of 61m.
Drilling highlights include intersections with 39m at 1.5% nickel, including 6m at 3.1%, another with 42m at 1.1% nickel including 6m at 2.8%, and 39m at 1% nickel, including 15m at 1.48%. For Cobalt the best two intersections were 27m at 0.30% cobalt, including 15m at 0.47% and 42m at 0.15% cobalt, including 9m at 0.46%.
The company described the latest results as ‘very favourable’ and emphasised that, together with 2008’s drilling data, it is expected to provide sufficient data to conduct a preliminary resource estimate for Zanzui.
Previously in 2008, a 30-hole, 1,940m drilling programme indicated that parts of the Zanzui complex have a
nickel-enriched laterite blanket, similar to that at Dutwa. Later in 2009, African Eagle received favourable metallurgical results, from acid leach tests, on these drill samples.
Parker noted that although “efforts are directed principally towards completing the feasibility study at the Dutwa nickel project,” African Eagle is also pursuing “future upside by evaluating other nearby oxide nickel deposits”.
Since it discovered the major oxide nickel deposits at Dutwa, African Eagle has been in transition from a diversified explorer into a nickel mining company. At Dutwa, the company has already completed a positive scoping study, and is now working towards a full feasibility study.
At Zanzui the drilling results indicate significant nickel and cobalt intersections, the company said. The highlights ranged from 39-42m with nickel grades between 0.9 and 1.5%, and 27-36m with cobalt grades between 0.14 and 0.30%.
“The nickel grades are marginally lower than at Dutwa, but the cobalt grades are significantly higher,” African Eagle MD Mark Parker commented.
“Potentially, this offers economies of scale for the development of Dutwa and augurs well for the long term sustainability of African Eagle's nickel activities in this promising region."
Zanzui is located just 50km south of African Eagle’s flagship Dutwa nickel project, which has a total contained resource of 845,000 tonnes of nickel equivalent - 806,000t nickel & 30,000t cobalt - after a recent upgrade in June.
African Eagle drilled 49 reverse circulation hole, averaging depths of 61m.
Drilling highlights include intersections with 39m at 1.5% nickel, including 6m at 3.1%, another with 42m at 1.1% nickel including 6m at 2.8%, and 39m at 1% nickel, including 15m at 1.48%. For Cobalt the best two intersections were 27m at 0.30% cobalt, including 15m at 0.47% and 42m at 0.15% cobalt, including 9m at 0.46%.
The company described the latest results as ‘very favourable’ and emphasised that, together with 2008’s drilling data, it is expected to provide sufficient data to conduct a preliminary resource estimate for Zanzui.
Previously in 2008, a 30-hole, 1,940m drilling programme indicated that parts of the Zanzui complex have a
nickel-enriched laterite blanket, similar to that at Dutwa. Later in 2009, African Eagle received favourable metallurgical results, from acid leach tests, on these drill samples.
Parker noted that although “efforts are directed principally towards completing the feasibility study at the Dutwa nickel project,” African Eagle is also pursuing “future upside by evaluating other nearby oxide nickel deposits”.
Since it discovered the major oxide nickel deposits at Dutwa, African Eagle has been in transition from a diversified explorer into a nickel mining company. At Dutwa, the company has already completed a positive scoping study, and is now working towards a full feasibility study.
Equatorial Palm Oil agrees US$60m joint venture with India’s Siva Group
Equatorial Palm Oil (LON:PAL) (EPO) is in the process of setting up a US$60m joint venture with an Indian conglomerate, the Siva Group.
EPO and Biopalm Energy - a wholly-owned subsidiary of Siva Ventures - will establish a new 50:50 joint venture company, which will own EPO’s entire 169,000 hectare land position.
With the signing of a Memorandum of Understanding (MOU), EPO has secured a US$22.5m investment and a US$30m loan facility, to accelerate the development of its palm oil operations in Liberia. EPO will itself invest US$7.5m to the new JV company.
EPO chairman Michael Frayne told investors that the agreement will “significantly mitigate the financial risk” of the Liberian palm oil project.
BioPalm is already the company’s largest shareholder with a 29% stake in the company, after the Indian investor subscribed for £5 million in new equity (33.3m shares) back in May.
"The Siva Group has an excellent track record of working with investment partners to unlock value to the benefit of shareholders ... this JV solidifies our relationship as we work together to achieve our longer term objectives,” Frayne commented.
In Liberia, EPO plans to develop 50,000 hectares in oil palm plantations within 10 years, the ‘strategic plan’ targets a 250,000 tonnes per annum (tpa) crude palm oil (CPO) operation.
CPO currently trades at US$925 per tonne (CIF Rotterdam).
Initial CPO production is slated for Q4 2010, and the first palm oil processing mill is already under construction.
"We have already made significant strides forward in our development plan with the establishment of nurseries and the construction of our first mill which is underway,” Frayne added.
“We will now accelerate our activities as we build a West African focused palm oil company."
The joint venture, and the extra capital it brings, is expected to fast-track the development of the plantations in Liberia.
EPO highlight that all operations across its three plantation areas - Palm Bay, Butaw and River Cess – will be ‘fast-tracked’ as well as the active ‘out grower’ programme.
Investment in associated and downstream infrastructure will also be accelerated.
The proposed joint venture is subject to shareholder and regulatory approvals. Now EPO will post a circular to it shareholders and a general meeting will be convened.
EPO joined the AIM market in February following a £6.5m IPO. The company aim is to become a sustainable, low-cost producer of crude palm oil in Africa through the reactivation and development of existing plantations and its agricultural land bank in Liberia.
According to EPO, palm oil is the most important and widely produced edible oil in the world, and demand is projected to grow at 5-6% per annum over the next five years.
Palm oil is to food production what iron ore is to heavy industry. It is an ingredient found in everything from Galaxy chocolate to Goodfella’s pizza. It even crops up in Persil soap powder. And in common with many basic minerals and hard commodities, demand for palm oil is buoyant and expanding all the time.
Liberia is a politically stable country and is becoming a fast growing investment destination for multi-national corporations, EPO said. Furthermore, the oil palm is indigenous to West Africa and cultivating it in this region avoids the adverse environmental impact the plant has on countries across Southeast Asia, where large areas are affected by a significantly lowered water table as a result of oil palm growing.
EPO believes the application of South-East Asian techniques and the latest seed genetics may enable Africa to become a key player in the world palm oil market again.
The company is currently in the process of reactivating 3,000 hectares of palms and will plant up to a further 1,200 hectares next year. However it is sitting on almost 170,000 hectares of land suitable for sustainable palm oil production.
EPO’s 10-year plan is to be a 50,000 hectare producer, moving to 100,000 hectares five years after that, with output totalling 250,000 tonnes of oil.
Frayne likens the process to developing a mine, or proving up the reserves of a major oil and gas project.
"You need to take time to set up a palm oil project properly .... but if you plant out your first 10,000 hectares and you can show you can go on to 100,000, especially if you plan to plant out sustainably, then you are on a roll," he said recently.
"There is a value re-assessment. By getting the initial planting going you upgrade the whole value."
EPO and Biopalm Energy - a wholly-owned subsidiary of Siva Ventures - will establish a new 50:50 joint venture company, which will own EPO’s entire 169,000 hectare land position.
With the signing of a Memorandum of Understanding (MOU), EPO has secured a US$22.5m investment and a US$30m loan facility, to accelerate the development of its palm oil operations in Liberia. EPO will itself invest US$7.5m to the new JV company.
EPO chairman Michael Frayne told investors that the agreement will “significantly mitigate the financial risk” of the Liberian palm oil project.
BioPalm is already the company’s largest shareholder with a 29% stake in the company, after the Indian investor subscribed for £5 million in new equity (33.3m shares) back in May.
"The Siva Group has an excellent track record of working with investment partners to unlock value to the benefit of shareholders ... this JV solidifies our relationship as we work together to achieve our longer term objectives,” Frayne commented.
In Liberia, EPO plans to develop 50,000 hectares in oil palm plantations within 10 years, the ‘strategic plan’ targets a 250,000 tonnes per annum (tpa) crude palm oil (CPO) operation.
CPO currently trades at US$925 per tonne (CIF Rotterdam).
Initial CPO production is slated for Q4 2010, and the first palm oil processing mill is already under construction.
"We have already made significant strides forward in our development plan with the establishment of nurseries and the construction of our first mill which is underway,” Frayne added.
“We will now accelerate our activities as we build a West African focused palm oil company."
The joint venture, and the extra capital it brings, is expected to fast-track the development of the plantations in Liberia.
EPO highlight that all operations across its three plantation areas - Palm Bay, Butaw and River Cess – will be ‘fast-tracked’ as well as the active ‘out grower’ programme.
Investment in associated and downstream infrastructure will also be accelerated.
The proposed joint venture is subject to shareholder and regulatory approvals. Now EPO will post a circular to it shareholders and a general meeting will be convened.
EPO joined the AIM market in February following a £6.5m IPO. The company aim is to become a sustainable, low-cost producer of crude palm oil in Africa through the reactivation and development of existing plantations and its agricultural land bank in Liberia.
According to EPO, palm oil is the most important and widely produced edible oil in the world, and demand is projected to grow at 5-6% per annum over the next five years.
Palm oil is to food production what iron ore is to heavy industry. It is an ingredient found in everything from Galaxy chocolate to Goodfella’s pizza. It even crops up in Persil soap powder. And in common with many basic minerals and hard commodities, demand for palm oil is buoyant and expanding all the time.
Liberia is a politically stable country and is becoming a fast growing investment destination for multi-national corporations, EPO said. Furthermore, the oil palm is indigenous to West Africa and cultivating it in this region avoids the adverse environmental impact the plant has on countries across Southeast Asia, where large areas are affected by a significantly lowered water table as a result of oil palm growing.
EPO believes the application of South-East Asian techniques and the latest seed genetics may enable Africa to become a key player in the world palm oil market again.
The company is currently in the process of reactivating 3,000 hectares of palms and will plant up to a further 1,200 hectares next year. However it is sitting on almost 170,000 hectares of land suitable for sustainable palm oil production.
EPO’s 10-year plan is to be a 50,000 hectare producer, moving to 100,000 hectares five years after that, with output totalling 250,000 tonnes of oil.
Frayne likens the process to developing a mine, or proving up the reserves of a major oil and gas project.
"You need to take time to set up a palm oil project properly .... but if you plant out your first 10,000 hectares and you can show you can go on to 100,000, especially if you plan to plant out sustainably, then you are on a roll," he said recently.
"There is a value re-assessment. By getting the initial planting going you upgrade the whole value."
Anglesey Mining rallies 13% as Labrador Iron Mines clears way to begin plant and mine construction
Anglesey Mining (LON:AYM) today reported a breakthrough for its 41% owned Labrador Iron Mines (TSX:LIM), which can finally now proceed with mine and plant construction after striking a deal with local First Nations.
The agreement with the Quebec Innu calls for an immediate removal of the barriers that had restricted normal access from the town of Schefferville to adjacent mining properties.
This will enable the company to proceed with the ongoing development of its iron ore projects in Western Labrador and Quebec.
The project construction, now set to begin, will include ground clearing, in parallel with contractor mobilization, to be followed by civil construction and mechanical erection of the plant in the subsequent weeks.
The beneficiation plant is expected to be fully erected in some 12 weeks.
Initial open-pit waste removal and mine extraction will be carried out using local contractors to enable ore to be stockpiled on the crusher pad ahead of dry run testing of the beneficiation plant.
The construction of the plant and camp and the initiation of mining activities, prior to the onset of the mid-winter, will enable commercial production activities to commence in the spring of 2011, said Anglesey.
In order for the deal to be reached, the governments of Quebec and Newfoundland have made “certain commitments” to the Innu to resolve a number of issues that will help facilitate the mining projects in the Schefferville area to move forward on an ongoing basis.
Under the agreement with Innu Matimekush - Lac John, Labrador Iron Mines and New Millennium Capital Corp will jointly support a number of local social activities, including some education, training, health and youth programs and, with Government participation, improvements to the community arena facility in Schefferville.
LIM will now fast track the construction of its iron ore project in Western Labrador, while negotiating to conclude an impact benefits agreement with the Innu Matimekush-Lac John and Innu Takuaikan Uashat Mak Mani-Utenam. The latter has initiated legal action against the Government of Newfoundland and Labrador over their duty of consultation about the permitting of LIM's Schefferville Area Iron Ore Project in Western Labrador.
“LIM is extremely pleased that, with the co-operation of all three Governments, agreement has been reached with the Quebec Innu paving the way for construction of our project so that commercial production of iron ore can commence in 2011,” said Chairman and Chief Executive of Anglesey Mining John Kearney.
The company added that the last two major operating permits, for the operation of the mine and the rail spur, are expected to be issued shortly following a consultation process with potentially affected First Nations.
At the end of the reporting period, 30 June 2010, Labrador had over C$41m in cash and cash equivalents, and the company had no debt.
The company is targeting full scale commercial production in April 2011, and producing 2 Mt (million tonnes) of iron ore during the 2011 calendar year.
LIM also owns 100% of Parys Mountain in North Wales with an historical resource in excess of 7 million tonnes at over 9% combined copper, lead and zinc.
Shares in Anglesey Mining rallied 13% on the news.
The agreement with the Quebec Innu calls for an immediate removal of the barriers that had restricted normal access from the town of Schefferville to adjacent mining properties.
This will enable the company to proceed with the ongoing development of its iron ore projects in Western Labrador and Quebec.
The project construction, now set to begin, will include ground clearing, in parallel with contractor mobilization, to be followed by civil construction and mechanical erection of the plant in the subsequent weeks.
The beneficiation plant is expected to be fully erected in some 12 weeks.
Initial open-pit waste removal and mine extraction will be carried out using local contractors to enable ore to be stockpiled on the crusher pad ahead of dry run testing of the beneficiation plant.
The construction of the plant and camp and the initiation of mining activities, prior to the onset of the mid-winter, will enable commercial production activities to commence in the spring of 2011, said Anglesey.
In order for the deal to be reached, the governments of Quebec and Newfoundland have made “certain commitments” to the Innu to resolve a number of issues that will help facilitate the mining projects in the Schefferville area to move forward on an ongoing basis.
Under the agreement with Innu Matimekush - Lac John, Labrador Iron Mines and New Millennium Capital Corp will jointly support a number of local social activities, including some education, training, health and youth programs and, with Government participation, improvements to the community arena facility in Schefferville.
LIM will now fast track the construction of its iron ore project in Western Labrador, while negotiating to conclude an impact benefits agreement with the Innu Matimekush-Lac John and Innu Takuaikan Uashat Mak Mani-Utenam. The latter has initiated legal action against the Government of Newfoundland and Labrador over their duty of consultation about the permitting of LIM's Schefferville Area Iron Ore Project in Western Labrador.
“LIM is extremely pleased that, with the co-operation of all three Governments, agreement has been reached with the Quebec Innu paving the way for construction of our project so that commercial production of iron ore can commence in 2011,” said Chairman and Chief Executive of Anglesey Mining John Kearney.
The company added that the last two major operating permits, for the operation of the mine and the rail spur, are expected to be issued shortly following a consultation process with potentially affected First Nations.
At the end of the reporting period, 30 June 2010, Labrador had over C$41m in cash and cash equivalents, and the company had no debt.
The company is targeting full scale commercial production in April 2011, and producing 2 Mt (million tonnes) of iron ore during the 2011 calendar year.
LIM also owns 100% of Parys Mountain in North Wales with an historical resource in excess of 7 million tonnes at over 9% combined copper, lead and zinc.
Shares in Anglesey Mining rallied 13% on the news.
Noventa plans to accelerate assessment of new Tantalum discovery
Noventa (LON:NVTA) has decided to accelerate the assessment of its new ‘potentially significant’ tantalum discovery, which was found near the Marropino mine in Mozambique.
Separately, the company also announced that it has secured over £5 million (US$8m) in new capital, with a £3.2 million (US$5m) equity placing and a separate £1.9m (US$3m) share subscription agreement.
Should the new discovery prove to be viable for mining, Noventa said that Marropino’s “enhanced economics may reduce or eliminate further need for external financing”.
Before the discovery and today's fundraisings, Noventa had planned to raise as much as $23 million to fund the next phase of the company’s development.
The strategic plan aims to raise plant production at Marropino to more than 500,000lbs of tantalum from 300,000lbs, and upgrade the facilities so they can handle material from the company’s Mutala and Morrua projects.
Noventa’s new discovery was initially reported last week, and on the 1st September, the company told investors that independent assays on three pits have confirmed the additional deposit as high grade tantalum bearing ore, measuring about 1 square kilometre.
According to Noventa, the additional costs associated with an accelerated assessment will be minimal. The company also pointed out that the discovery could significantly enhance the economics of the ‘Strategic Plan’ for Marropino, especially in the early years.
However, the company also emphasised that “until the evaluation of the Discovery is completed there is no guarantee that it is viable or of consistently high grade”.
Earlier this week, Noventa said that initial sampling results indicate that the discovery is significant and the tantalum could be economic to mine, providing at least twelve months of feedstock for the Marropino plant, and substantially increasing the mine’s life.
“We are encouraged that the discovery will add a significant quantity of tantalum to the existing mineral resource.
“Not only do we now expect the life of Marropino to be extended, but the substantially higher grade of tantalum will mean that the economics and payback of the project will be significantly enhanced,” said Noventa Chairman Eric Kohn.
The first three samples have been analysed independently and the results show tantalum grades of 3,836 ppm (parts per million), 2,697 ppm and 7,577 ppm respectively. Additional sampling and assaying is still taking place.
Noventa said that the discovery confirmed its decision to start exploration on all of its mining concessions and exploration licenses.
The discovery also caught the attention of Collins Stewart’s chief mining analyst, John McGloin who described it as ‘pretty significant’. If proved up, it could allow the company to expand beyond the existing Marropino tantalum mine without too much cost, the analyst told Proactive Investors.
McGloin said Tantalum is “one of the best stories out there in terms of supply and demand” as he emphasised the positive economic trends for the rare metal.
Global production of tantalum, which is used to manufacture high-end electronic capacitors for mobile phones, has been limited since the closure of major mining operations in Australia. The Wodgina mine in the Pilbara region of Western Australia closed in 2008 even though it was the world’s largest tantalum mining operation, supplying 30 per cent of global demand.
Among the publicly-quoted tantalum-focused juniors, McGloin reckons “Noventa is probably the best placed” to profit from this acute lack of supply. He pointed out that the company is already in production and it seems to have successfully worked through its legacy issues following the appointment of corporate fixer Eric Kohn.
Indeed, Noventa has been gaining considerable traction in recent months, as it has continued to turn-around the previously underperforming Marropino tantalum mine.
In August, the company revealed that Marropino’s redevelopment has made rapid progress since the mine re-started operations in April 2010, after spending just under a year on care-and-maintenance.
Tantalum recovery at Marropino has increased significantly over historic levels, to more than 51% by. Prior to May 2009, the mine achieved recovery rates between 30% and 35%.
Furthermore, production output from the mine has also been higher than expected, which enabled the company to dispatch the first shipment of tantalum to one of the company’s two key customers ahead of schedule.
The shipment on the 24th August, is expected to confirm logistics pathway for future shipments as well as revise and adjust shipping routes and procedures ahead of the commencement of full production at Marropino in 2011.
Separately, the company also announced that it has secured over £5 million (US$8m) in new capital, with a £3.2 million (US$5m) equity placing and a separate £1.9m (US$3m) share subscription agreement.
Should the new discovery prove to be viable for mining, Noventa said that Marropino’s “enhanced economics may reduce or eliminate further need for external financing”.
Before the discovery and today's fundraisings, Noventa had planned to raise as much as $23 million to fund the next phase of the company’s development.
The strategic plan aims to raise plant production at Marropino to more than 500,000lbs of tantalum from 300,000lbs, and upgrade the facilities so they can handle material from the company’s Mutala and Morrua projects.
Noventa’s new discovery was initially reported last week, and on the 1st September, the company told investors that independent assays on three pits have confirmed the additional deposit as high grade tantalum bearing ore, measuring about 1 square kilometre.
According to Noventa, the additional costs associated with an accelerated assessment will be minimal. The company also pointed out that the discovery could significantly enhance the economics of the ‘Strategic Plan’ for Marropino, especially in the early years.
However, the company also emphasised that “until the evaluation of the Discovery is completed there is no guarantee that it is viable or of consistently high grade”.
Earlier this week, Noventa said that initial sampling results indicate that the discovery is significant and the tantalum could be economic to mine, providing at least twelve months of feedstock for the Marropino plant, and substantially increasing the mine’s life.
“We are encouraged that the discovery will add a significant quantity of tantalum to the existing mineral resource.
“Not only do we now expect the life of Marropino to be extended, but the substantially higher grade of tantalum will mean that the economics and payback of the project will be significantly enhanced,” said Noventa Chairman Eric Kohn.
The first three samples have been analysed independently and the results show tantalum grades of 3,836 ppm (parts per million), 2,697 ppm and 7,577 ppm respectively. Additional sampling and assaying is still taking place.
Noventa said that the discovery confirmed its decision to start exploration on all of its mining concessions and exploration licenses.
The discovery also caught the attention of Collins Stewart’s chief mining analyst, John McGloin who described it as ‘pretty significant’. If proved up, it could allow the company to expand beyond the existing Marropino tantalum mine without too much cost, the analyst told Proactive Investors.
McGloin said Tantalum is “one of the best stories out there in terms of supply and demand” as he emphasised the positive economic trends for the rare metal.
Global production of tantalum, which is used to manufacture high-end electronic capacitors for mobile phones, has been limited since the closure of major mining operations in Australia. The Wodgina mine in the Pilbara region of Western Australia closed in 2008 even though it was the world’s largest tantalum mining operation, supplying 30 per cent of global demand.
Among the publicly-quoted tantalum-focused juniors, McGloin reckons “Noventa is probably the best placed” to profit from this acute lack of supply. He pointed out that the company is already in production and it seems to have successfully worked through its legacy issues following the appointment of corporate fixer Eric Kohn.
Indeed, Noventa has been gaining considerable traction in recent months, as it has continued to turn-around the previously underperforming Marropino tantalum mine.
In August, the company revealed that Marropino’s redevelopment has made rapid progress since the mine re-started operations in April 2010, after spending just under a year on care-and-maintenance.
Tantalum recovery at Marropino has increased significantly over historic levels, to more than 51% by. Prior to May 2009, the mine achieved recovery rates between 30% and 35%.
Furthermore, production output from the mine has also been higher than expected, which enabled the company to dispatch the first shipment of tantalum to one of the company’s two key customers ahead of schedule.
The shipment on the 24th August, is expected to confirm logistics pathway for future shipments as well as revise and adjust shipping routes and procedures ahead of the commencement of full production at Marropino in 2011.
Baobab Resources identifies distinct ore domain at Tete’s South Zone
Baobab Resources’ (LON:BAO)ongoing step-out drilling at the South Zone of the Tete project has intersected substantial widths of titanium and iron bearing rock (magnetite-ilmenite) in seven of the eight RC drill holes completed to date.
The company also released results from the first 3 diamond drill holes, which encountered multiple intercepts with significant mineralisation - up to 61% iron (Fe), 0.63% vanadium and mass recovery reaching 34.7%.
Ben James, Baobab MD, said the results characterise a distinct, higher mass recovery, ore domain to that modelled in the Chitongue Grande resource - the Tete project’s most advanced prospect with a 47.7 million tonne inferred resource.
At the Tete project’s South Zone, Baobab has been conducting a phased exploration programme, which began with 6 diamond drill holes earlier this year. The company is currently following up the diamond drill holes with a reverse circulation (RC) drilling programme.
The diamond drilling results from the South Zone show that each of the three holes encountered multiple intercepts with significant mineralisation.
Drill hole ‘TDH0019’ cut five significant intercepts for a total of 98.5 metres, including 65.5 metres with concentrate grades of 59.48% iron (Fe), 0.61% vanadium oxide (V2O5). The ‘TDH0019’ lab results also showed 34.7% mass recovery from 46m.
Baobab encountered seven significant intercepts in ‘TDH0045’, totalling 192 metres and including: 51 metres with concentrate grades of 60.5% iron (Fe), and 0.63% vanadium oxide (V2O5). ‘TDH0045’ had 33.0% mass recovery from 77.5 metres.
In ‘TDH0047’ there were three significant intercepts for a total of 87.5 metres, including 43.5 metres with concentrate grades of 58.9% iron (Fe) and 0.59% vanadium oxide (V2O5). This hole had 31.3% mass recovery from 95 metres.
In light of the results Baobab has commissioned a detailed metallurgical study to determine how to optimise the mineral processing of the domains.
“We look forward to working with Coffey Mining to construct mineral processing flow sheets that will not only optimise the potential of these domains, but also take into consideration the project's unique and strategic access to infrastructure and complementary resources."
The Tete project covers 632km2 in Mozambique. The project encompasses two areas of magnetite-ilmenite mineralisation, known as the Massamba Group trend in the North and the Singore area to the south.
The infrastructure in the surrounding area is a key feature for the Tete project. Baobab highlights that the project is ‘strategically located’, due to its proximity to the Zambezi river and two neighbouring ‘mega-coal’ operations (run by Vale (NYSE:VALE) and Riversdale (ASX:RIV).
Baobab is primarily focusing on the Massamba Group, which is made up of five distinct prospects along a 8km trend. The five prospects are the Chitongue Grande, Pequeno, Caangua, Chimbala and South Zone.
At the South Zone a total of 35 RC drill holes have been planned, for 7,000m. The first eight holes have totalled 869m. Once complete, Baobab will combine both the RC and the diamond drilling results to estimate a global resource for the South Zone.
Baobab said it expects to receive results from the remaining three diamond drill holes and the first five RC drill holes in early October.
The central portion of the Massamba Group is known as the Chimbala prospect. Along with the South Zone, Chimbala has been one of the main priorities for the 2010 drilling programme. Earlier this year, Baobab completed a 25-hole campaign. In July and August, the company reported the results from Chimbala.
The diamond drilling tested magnetic targets over an area of 3km2, the company said it intersected significant widths of magnetite-ilmenite mineralisation, with grades reaching up to 65.9% iron (Fe) and 0.72% vanadium.
The company also released results from the first 3 diamond drill holes, which encountered multiple intercepts with significant mineralisation - up to 61% iron (Fe), 0.63% vanadium and mass recovery reaching 34.7%.
Ben James, Baobab MD, said the results characterise a distinct, higher mass recovery, ore domain to that modelled in the Chitongue Grande resource - the Tete project’s most advanced prospect with a 47.7 million tonne inferred resource.
At the Tete project’s South Zone, Baobab has been conducting a phased exploration programme, which began with 6 diamond drill holes earlier this year. The company is currently following up the diamond drill holes with a reverse circulation (RC) drilling programme.
The diamond drilling results from the South Zone show that each of the three holes encountered multiple intercepts with significant mineralisation.
Drill hole ‘TDH0019’ cut five significant intercepts for a total of 98.5 metres, including 65.5 metres with concentrate grades of 59.48% iron (Fe), 0.61% vanadium oxide (V2O5). The ‘TDH0019’ lab results also showed 34.7% mass recovery from 46m.
Baobab encountered seven significant intercepts in ‘TDH0045’, totalling 192 metres and including: 51 metres with concentrate grades of 60.5% iron (Fe), and 0.63% vanadium oxide (V2O5). ‘TDH0045’ had 33.0% mass recovery from 77.5 metres.
In ‘TDH0047’ there were three significant intercepts for a total of 87.5 metres, including 43.5 metres with concentrate grades of 58.9% iron (Fe) and 0.59% vanadium oxide (V2O5). This hole had 31.3% mass recovery from 95 metres.
In light of the results Baobab has commissioned a detailed metallurgical study to determine how to optimise the mineral processing of the domains.
“We look forward to working with Coffey Mining to construct mineral processing flow sheets that will not only optimise the potential of these domains, but also take into consideration the project's unique and strategic access to infrastructure and complementary resources."
The Tete project covers 632km2 in Mozambique. The project encompasses two areas of magnetite-ilmenite mineralisation, known as the Massamba Group trend in the North and the Singore area to the south.
The infrastructure in the surrounding area is a key feature for the Tete project. Baobab highlights that the project is ‘strategically located’, due to its proximity to the Zambezi river and two neighbouring ‘mega-coal’ operations (run by Vale (NYSE:VALE) and Riversdale (ASX:RIV).
Baobab is primarily focusing on the Massamba Group, which is made up of five distinct prospects along a 8km trend. The five prospects are the Chitongue Grande, Pequeno, Caangua, Chimbala and South Zone.
At the South Zone a total of 35 RC drill holes have been planned, for 7,000m. The first eight holes have totalled 869m. Once complete, Baobab will combine both the RC and the diamond drilling results to estimate a global resource for the South Zone.
Baobab said it expects to receive results from the remaining three diamond drill holes and the first five RC drill holes in early October.
The central portion of the Massamba Group is known as the Chimbala prospect. Along with the South Zone, Chimbala has been one of the main priorities for the 2010 drilling programme. Earlier this year, Baobab completed a 25-hole campaign. In July and August, the company reported the results from Chimbala.
The diamond drilling tested magnetic targets over an area of 3km2, the company said it intersected significant widths of magnetite-ilmenite mineralisation, with grades reaching up to 65.9% iron (Fe) and 0.72% vanadium.
Friday, 3 September 2010
Green Dragon Gas reports significant growth as China’s thirst for energy continues
China’s thirst for energy resources has continued with an increased focus on domestic supplies of gas, Green Dragon Gas (LON:GDG) chairman Randeep Grewal said today.
In the company’s interim results, Green Dragon told investors that it remains on-track to meet its ‘aggressive targets’ in 2010, after it increased gross profit by 44% in the first six months. The Chinese CBM (Coal Bed Methane) gas producer increased revenues by 15% to US$21.5m.
"Green Dragon Gas continued its organic growth in the first half of the year with each of the four divisions making solid progress ... As each division develops we are increasingly seeing the real benefits of a vertically integrated business,” Grewal commented.
“Each division continues to work with its partners, such as PetroChina and CNPC Kunlun, and each partnership in one segment is yielding synergies for the other segments."
Two years after its inception, Green Dragon’s drilling division has continued to drive production growth. The company drilled 13 new wells in the first six months of the year, with 7 vertical wells and 6 horizontal SIS (surface-to-inseam) wells.
Grewal highlighted that the company’s drilling success at the GSS block has now defined the standard operating procedures and typical gas extraction process.
“We expect a continuous drilling program with significantly more rigs drilling in GSS next year to conclude this field's development. We expect GSS development to be completed within five years and continue producing gas for at least 20 years and thereafter."
In the six-month period, Green Dragon increased production from the GSS block to 2.3 million cubic feet per day (MMCFPD). The company said it is on target to reach its 1 billion cubic feet (Bcf) target by the end of the year.
At its Midstream Wholesale division Green Dragon increased gas sales by 4.28% to 1.2Bcf in the first half, while the Downstream division upped sales by 7%, selling 5.17Bcf.
Across all its blocks Green Dragon has 25.5 trillion cubic feet (Tcf) of gas-in-place, with a 2.3Tcf 3P (Proven, Probable and Possible) reserve, with a net present value (PV10) of US$9.3bn.
Additionally, the company highlighted that its joint venture business also performed positively.
"Our joint-ventures in gas distribution also continued their profitable growth ... This growth ought to be further enhanced by favorable pricing policies released by the government recently.”
Looking ahead, the chairman believes that any ‘remote possibility’ of China reducing its dependency on overseas energy supply must entail a material increase in domestic gas production. According to Grewal, this increase will include a significant amount of CBM production.
Grewal emphasised that Green Dragon remains on track to achieve the aggressive targets, and its foundations largely in place to grow CBM production, he expects to see the company develop real momentum in the years ahead.
Green Dragon also noted that its significant organic growth will be complemented by ‘niche acquisitive opportunities’.
In response to the positive results, Evolution Securities’ Keith Morris highlighted that Green Dragon is making “steady organic progress”.
Evo’s oil and gas expert said that key growth drivers remain.
Accordingly, Morris identified the 2nd phase of the ConocoPhillips farm-in; access to nearby rail infrastructure; and achieving ‘meaningful’ upstream CBM revenues as important milestones.
In the company’s interim results, Green Dragon told investors that it remains on-track to meet its ‘aggressive targets’ in 2010, after it increased gross profit by 44% in the first six months. The Chinese CBM (Coal Bed Methane) gas producer increased revenues by 15% to US$21.5m.
"Green Dragon Gas continued its organic growth in the first half of the year with each of the four divisions making solid progress ... As each division develops we are increasingly seeing the real benefits of a vertically integrated business,” Grewal commented.
“Each division continues to work with its partners, such as PetroChina and CNPC Kunlun, and each partnership in one segment is yielding synergies for the other segments."
The improved performance has allowed Green Dragon to cut net losses by 20%, to US$6.2m (H109:US$7.8m), and its net loss per share was 35% better off at US$0.045 (H109:US$0.069).
During the period, the company’s balance sheet was boosted by an US$8m farm-out payment from ConocoPhillips (NYSE:COP) and a US$50m convertible bond fund raising. At the 30th June, Green Dragon had total Equity of US$576.2m and current assets of US$92.3m, with US$77.6m in cash.
During the period, the company’s balance sheet was boosted by an US$8m farm-out payment from ConocoPhillips (NYSE:COP) and a US$50m convertible bond fund raising. At the 30th June, Green Dragon had total Equity of US$576.2m and current assets of US$92.3m, with US$77.6m in cash.
Grewal highlighted that the company’s drilling success at the GSS block has now defined the standard operating procedures and typical gas extraction process.
“We expect a continuous drilling program with significantly more rigs drilling in GSS next year to conclude this field's development. We expect GSS development to be completed within five years and continue producing gas for at least 20 years and thereafter."
In the six-month period, Green Dragon increased production from the GSS block to 2.3 million cubic feet per day (MMCFPD). The company said it is on target to reach its 1 billion cubic feet (Bcf) target by the end of the year.
At its Midstream Wholesale division Green Dragon increased gas sales by 4.28% to 1.2Bcf in the first half, while the Downstream division upped sales by 7%, selling 5.17Bcf.
Across all its blocks Green Dragon has 25.5 trillion cubic feet (Tcf) of gas-in-place, with a 2.3Tcf 3P (Proven, Probable and Possible) reserve, with a net present value (PV10) of US$9.3bn.
Additionally, the company highlighted that its joint venture business also performed positively.
"Our joint-ventures in gas distribution also continued their profitable growth ... This growth ought to be further enhanced by favorable pricing policies released by the government recently.”
Looking ahead, the chairman believes that any ‘remote possibility’ of China reducing its dependency on overseas energy supply must entail a material increase in domestic gas production. According to Grewal, this increase will include a significant amount of CBM production.
Grewal emphasised that Green Dragon remains on track to achieve the aggressive targets, and its foundations largely in place to grow CBM production, he expects to see the company develop real momentum in the years ahead.
Green Dragon also noted that its significant organic growth will be complemented by ‘niche acquisitive opportunities’.
In response to the positive results, Evolution Securities’ Keith Morris highlighted that Green Dragon is making “steady organic progress”.
Evo’s oil and gas expert said that key growth drivers remain.
Accordingly, Morris identified the 2nd phase of the ConocoPhillips farm-in; access to nearby rail infrastructure; and achieving ‘meaningful’ upstream CBM revenues as important milestones.
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