MOD Resources (MOD AU) –Amended resource estimate for T3 | Metal Tiger (MTR LN) - holds a 30% joint-venture interest in the project | Shanta Gold (SHG LN) – Drilling at Bauhinia Creek update | SolGold* (SOLG LN) – Ten priority targets identified in Ecuador | Tri-Star Resources* (TSTR LN) – Repayment of Loan Notes | URU Metals (URU LN) – Geophysics and geochemistry follow-up programmes at Zebediela
Companies: MTR SHG SOLG TSG URU
Anglo American (AAL LN) – De Beers diamond sales | BHP Billiton (BLT LN) – Update on conditional agreement on Samarco civil claims | Cradle Arc (CRA LN) (Formerly Alecto Minerals) – Mowana copper mine update and guidance | Kodal Minerals* (KOD LN) – Receipt of £1.2m from Suay Chin | Tri-Star Resources* (TSTR LN) – Successful completion of £13m fund-raising
Companies: AAL BHP CRA KOD TSG
Kibo Mining (KIBO LN) – Sale of Haneti nickel project | Tri-Star Resources* (TSTR LN) – Raising £13m in accelerated bookbuild
Companies: Kibo Mining TRISTAR GOLD
RA International is a leading provider of services to remote locations in Africa and the Middle East looking to join AIM raising £18.8m and 56p, market cap of £97.2m. Expected 29 June
Cake Box Holdings—franchise retailer of cakes with a growing store base across the UK looking to join AIM, Sell down of £16.5m, Mkt Cap £43.2m. Mar18 FY rev £12.8m, underlying earnings £3.7m. Due 27 June.
Mind Gym. Behavioural science business that uses scalable proprietary products to deliver human capital and business improvement solutions to large corporations. Offer TBA. Due 28 June
Yellow Cake will use its expertise to generate value through the ownership of physical U3O8 (Uranium) together with a range of activities and opportunities connected with owning physical U3O8. Acquiring supply contract for up to $170m. Due Early July.
Knights Group— UK regional legal and professional services businesses. FYApr18 rev £34.9m and adjusted operating profit was £6.8m excluding Turner Parkinson (acquiring on IPO). Offer TBA, expected 29 June.
TransGlobe Energy Corporation—an independent international upstream oil and gas company with headquarters in Calgary, Canada is looking to join AIM. No Capital to be raised, market cap of £131m. Expected 29 June
Strongbow Exploration (TSX:SBW) intends to dual list on AIM. Holds rights to the South Crofty underground tin mine, a former producing tin mine located in the towns of Pool and Camborne, Cornwall . The project is estimated to require the Company to raise £25 million over the next 18 months to progress to a production decision. Offer TBS. Due June.
Companies: NFC LOGP AUG KAT ROSE EDL SNG UVEN TSG ABAL
Amur Minerals* (AMC LN) – Low C1 cash costs estimates point to high margin production potential at Kun Manie | Bluejay Mining* (JAY LN) – STRONG BUY - Target Price 45p – Bluejay increases license area around Disko nickel prospect in Greenland | IronRidge Resources* (IRR LN) – Four licenses granted in the Ivory Coast covering gold and lithium exploration | Savannah Resources (SAV LN) – Savannah Resources delineates largest hard rock lithium deposit in Europe at the Grandao deposit, Mina do Barroso project | Tri-Star Resources* (TSTR LN) – Antimony roaster project nearing completion. 2017 results.
Companies: AMC JAY IRR SAV TSG
Pathfinder Minerals plc (PFP LN) £0.55p, mkt cap £1.3m – Requisition for General Meeting to remove Nick Trew and Sir Henry Bellingham | Serabi Gold (SRB LN) 3.8p Mkt value £26.3m – 2017 results, 2018 guidance and US$8m placing | Tri-Star Resources* (TSTR LN) 0.035p, mkt cap £22.3m – SPMP draw closer to completion of Oman Antimony Roaster
Companies: PFP TSG SRB
Avesoro Resources (ASO LN) – Infill drilling results from New Liberty | Rio Tinto (RIO LN) – Rio Tinto announces another Australian coal disposal | Tri-Star Resources* (TSTR LN) – Project and Trade Finance facility for SPMP
Companies: ASO RIO TSG
Altus Strategies* (ALS LN) Buy – 12.2p – Gold licenses secured in Cote d’Ivoire and a proposed private placing | Kodal Minerals* (KOD LN) BUY – Further high-grade drilling results from Bougouni lithium project | Metminco (MNC LN) – Metminco rights issue, management changes and new strategy | Savannah Resources (SAV LN) – Mina do Barroso metallurgical testing | Tri-Star Resources* (TSTR LN) – Board changes assert Odey Asset Management on board
Companies: ALS KOD MNC SAV TSG
Altus Strategies (ALS LN) 8.5p, Mkt Cap £9.2m – Liberia exploration update | SolGold* (SOLG LN) 25p, Mkt Cap £424.1m – New copper mineralisation discovered at Timbara | Strategic Minerals* (SML LN) 2.017p, Mkt Cap £26.7m – Exploration results from Hanns Camp | Tri-Star Resources* (TSTR LN) 0.0375p, mkt cap £23.9m – Additional investment in SPMP | Bushveld Minerals* (BMN) BUY – Target price rises to 18.28 from 14p – Vanadium price rise more than offsets SA rand strength
Companies: ALS SOLG SML bmn TSG
Arc Minerals* (new ticker ARC LN) 2.5p, Mkt Cap 8.3m – New momentum to drive Arc Minerals in copper, cobalt and gold | Acacia Mining (ACA LN) 199.5 pence, Mkt Cap £818.1m – Cost reductions delivered on lower gold output | Caledonia Mining (CMCL LN) 552.5p, Mkt Cap £58.5m – Record quarterly and annual gold production from the Blanket mine | Central Asia Metals (CAML LN) 329p, Mkt Cap £578m – Q4 and FY17 production update | Gem Diamonds (GEMD LN) 93p, Mkt Cap £128.9m –Largest diamond recovered from Letseng Orosur Mining (OMI LN) 11.25 pence, Mkt Cap £13.2m – Q2 and H1 Results | Polyus (PLZL LI) $37.4, Mkt Cap $10.0bn – Fosun deal terminated | Tri-Star Resources* (TSTR LN) 0.05p, mkt cap £31.9m – Odey Asset Management increases holding to 65.16%
Companies: OTC ACA ACA CAML GEMD OMI PLZL CMCL TSG
Anglo Asian Mining* (AAZ LN) – CEO loan update | Asiamet Resources (ARS LN) – Drilling potential feeder zone at BKZ | Kenmare Resources (KMR LN) – 2018 production guidance and update | Tri-Star Resources* (TSTR LN) – Oversubscribed open offer raises £4.42m
Companies: AAZ ARS KMR TSG
Erris Resources (ERIS LN) – Admission to AIM Tri-Star Resources* | (TSTR LN) – Deeply discounted Open Offer to raise £4.4m to re-finance Odey loan notes and cost overrun
Companies: TRISTAR GOLD
Anglo Asian Mining* (AAZ LN) – Start of mining at Ugur ramps up production rate | Metminco* (MNC LN) – Interim results and progress report on Miraflores | Tri-Star Resources* (TSTR LN) – Interim report and update | Vast Resources (VAST LN) – Baita Plai mining licence expected shortly
Companies: AAZ MNC VAST TSG
Asiamet Resources (ARS LN) – Filing of updated resource report | Avocet Mining (AVM LN) – Extension of standstill agreement with Inata’s major creditors | Mkango Resources* (MKA LN) – Respected industry observer sees 50% YTD price increase in key rare earth elements in China | Tri-Star Resources* (TSTR LN) – Antimony prices continue to rise as environmental shutdowns in China cause stock levels to fall
Companies: ARS AVM MKA TSG
TriStar Resources has announced that its 40% owned subsidiary, SPMP has firmed up the budget for the Oman Antimony Roaster at US$96m. The budget increase over the original US$70m estimate and our recent assumption of US$90m results from design improvements as opposed to cost overruns. Nevertheless, on the assumption that TriStar may need to raise an additional US$7.5m to fund its share of the project, we now reduce our estimated value to 0.39p/share.
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Oil fell, paring a weekly gain, as investors weighed improving supply fundamentals against doubts surrounding China's economic growth.
Futures in New York slid 2% Friday but notched a 13% increase for the week. Major producers continue to scale back production. US explorers laid down another 21 oil rigs, bringing the total to the lowest since 2009. Beijing abandoned its economic growth target for this year due to “great uncertainty” over the coronavirus, triggering concerns over a demand recovery.
Yet, output cuts by major producers have helped shrink inventories globally at the same time that OPEC+ works to implement its pledged reductions. The alliance's programme this month is on the way to trimming 9.7 million barrels of daily crude output -- roughly 10% of global supplies and stockpiles at the storage hub at Cushing, Oklahoma, shrank by the most on record last week.
West Texas Intermediate crude for July delivery dropped 67 cents to settle at $33.25 a barrel.
Brent for July settlement fell 93 cents to end the session at $35.13 a barrel on the ICE Futures Europe exchange.
Gasoline futures fell 0.7% to $1.0382 a gallon.
China's oil demand earlier this month was probably at 92% of levels at the same time last year, IHS Markit said, and full-year consumption is likely to be around 8% lower than in 2019.
Companies: FOG PVR 88E DGOC EME TRIN UOG
Companies: Hurricane Energy
Savannah Energy is an AIM-listed E&P company with two sets of assets: (i) in-production gas and oil fields and a regional monopoly gas distributon network in South East Nigeria (well away from the risky Delta area); and (ii) licenses over 50% of a prolific oil basin in Niger.
Companies: Savannah Energy
Anglo Asian Mining is an AIM listed precious and base metals producer running flagship Gedabek operations in western Azerbaijan which include three producing mines and processing facilities. The Company targets 75-80koz GEOs in 2020 with low cost operations providing capital for organic growth opportunities within the highly prospective +1,000km2 land package, with the potential for additional attractive targets outside Azerbaijan as well as 25% of FCF dividend programme.
Companies: Anglo Asian Mining
Falcon is uniquely placed in the current challenging commodity price environment with its strong cash position (US$11.5m at 31 March 2020), fully funded drilling programme and high quality assets. Following the farm down of a 7.5% participating interest to partner Origin Energy in return for an A$150.5m increase in the gross cap carry, we believe Falcon is fully funded through one of the greatest periods of uncertainty the oil and gas industry has ever faced. At a time when many in the industry fight for their very survival, we believe Falcon has managed to secure a fantastic deal for shareholders, which should see the Company through to the potential monetisation of its 22.5% participating interest. We maintain our price target at 40p, a 426% premium to the current share price and reiterate our BUY recommendation.
Companies: Falcon Oil & Gas
Sylvania's share price has fallen 53% since its peaked on the 21st Feb, as the global economy hit the brakes. The short term demand outlook for PGMs is miserable, with supply chains breaking down as both luxury goods and car sales sales collapse.
Companies: Sylvania Platinum
In this note, we analyze the indebtedness of 35 international E&Ps publicly listed in the UK, Canada, Norway, Sweden and the USA. For each company, we look at (1) cash position, (2) level and nature of debt (including covenants), (3) debt service and principal repayment framework and (4) Brent price required from April to YE20 to meet all the obligations and keep cash positions intact. We also estimate YE20 cash if Brent were to average US$20/bbl from April to YE20. While the oil demand and oil price collapse are of unprecedented historical proportions and the opportunities to cut costs much more limited than in 2014, most companies (with a few exceptions) entered the crisis in much better position than six years ago, with stronger balance sheets and often already extended debt maturities. In addition, this time around, many E&Ps have already been deleveraging for 1-2 years and are not caught in the middle of large developments that cannot be halted. The previous crisis also showed that debt providers could relax debt covenants for a certain period as long as interest and principal repayment obligations were met. This implies that as long as operations are not interrupted and counterparties keep paying their bills (Kurdistan), the storm can be weathered by most for a few quarters.
With (1) Brent price of about US$50/bbl in 1Q20, (2) reduced capex programmes, (3) material hedging programmes covering a large proportion of FY20 production at higher prices and (4) limited principal repayments in 2020, we find that most companies can meet all their costs and obligations in 2020 at Brent prices below US$40/bbl and often below US$35/bbl) from April until YE20 and keep their cash intact, allowing them to remain solvent at much lower prices for some time. In particular, Maha Energy and SDX Energy are cash neutral at about US$20/bbl. When factoring the divestment of Uganda, Tullow needs only US$9/bbl to maintain its YE20 cash equal to YE19. Canacol Energy, Diversified Gas and Oil, Independent Oil & Gas, Orca Exploration, Serica Energy and Wentworth Resources are gas stories not really exposed to oil prices and Africa Oil has hedged 95% of its FY20 production at over US$65/bbl.
Companies: AKERBP AOI CNE CNE DGOC EGY ENOG ENQ GENL GKP GPRK GTE HUR IOG JSE KOS LUPE MAHAA OKEA ORC.B PEN PHAR PMO PTAL PXT RRE SDX SEPL TETY TGL TLW TXP WRL
Gold – Robust pricing, improved returns and increased interest
The robust gold price, currently sitting comfortably above $1,700/oz, has been one of the bright spots of the current COVID crisis, although the roots of the price increase were seen well before from mid-2019 on geopolitical and trade concerns. Gold mining companies have been reaping the rewards of the higher price with forecast profits and cash expected to grow significantly. The increase in gold price has been reflected by share price appreciation for most of the gold-mining sector; gold miners, those companies developing gold projects and even gold explorers have all seen an uptick in share prices. Those companies in production should see considerably higher profits and we expect the level of dividends back to shareholders to rise.
The rate of M&A in the sector might also increase, as in previous high price periods, with some companies assuming that these prices can be sustained – however, they will have to be careful as a rash of M&A in previous cycles has shown that there may be a price to pay later on and the industry can ill afford a return to eye-wateringly large write-downs on the other side of this cycle. Gold miners will also have to behave prudently as there will, of course, be a temptation for higher throughput and production, regardless of grade, to generate more cash – a decreasing profit margin perhaps, but a lengthening mine life; as in everything there is a balance to be made to ensure sensible returns.
We are most heartened by a renewed interest in the previously (seemingly) ignored junior explorers which we think is a theme that will develop and continue.
Companies: AURA CMCL CNG GDP JLP ORR
An independent resource audit by Gaffney, Cline & Associates (GCA) has significantly increased the resources at the Mako gas field following the JV's highly successful drilling campaign in Q4/19. GCA have increased the 2C gross recoverable dry gas volumes when compared to its previous resource assessment (in January 2019) by 79% to 495Bcf, slightly ahead of the internal 493Bcf assessment. In the upside case, the 3C resources have increased by 108% to 817Bcf, significantly higher than the 3C internal resource estimate of 666Bcf. Following the GCA resource upgrade, the Mako field has been proven to be one of the largest gas fields ever discovered in the West Natuna Basin and is believed to be the largest undeveloped resource in the region. Located close to existing infrastructure and well established markets, we believe Mako is an attractive proposition, which we currently value at US$18.3m or 3.2p using a US$6/mcf long term gas price.
Companies: Empyrean Energy
April 2020 production payment
Companies: Gulf Keystone Petroleum
Petropavlovsk PLC (LSE: POG) have released their FY2019 results and Q1 trading update this morning. The company had already released production numbers for last year. Overall the numbers reflected a strong operational performance although various financial/other parameters thwarted positive changes below the EBITDA line. Conversely net cash from operations reduced by 43% due to lower cash from prepayment as part of the group’s forward sale facility with the banks, yet net debt came down to $561m. . We show the key figures in Table 1.
An independent resource audit by Gaffney, Cline & Associates (GCA) has significantly increased the resources at the Mako gas field following the JV's highly successful drilling campaign in Q4/19. GCA have increased the 2C gross recoverable dry gas volumes when compared to its previous resource assessment (in January 2019) by 79% to 495Bcf, slightly ahead of the internal 493Bcf assessment. In the upside case, the 3C resources have increased by 108% to 817Bcf, significantly higher than the 3C internal resource estimate of 666Bcf. Following the GCA resource upgrade, the Mako field has been proven to be one of the largest gas fields ever discovered in the West Natuna Basin and is believed to be the largest undeveloped resource in the region. Located close to existing infrastructure and well established markets, we believe Mako is an attractive proposition, which we conservatively value at US$18.3m (risked) or 3.2p using a US$6/mcf long term gas price, unrisked our valuation of Mako increases to US$25.2m or 4.3p per share. We value Empyrean as a whole at 19.0p per share a 280% premium to the share price and reiterate our BUY recommendation.
Valuation – We have updated our Mako model, with gas first in 2023 (previously 2022). Using a long term gas price of US$6/mcf, and a 10% discount factor we value the 42.1Bcf of net 2C resources at US$18.3m (risked) or 3.2p per share. We include a 30% risking to account for any potential commercial risks (including political and fiscal changes), cost risks (associated with potential development cost variations) and timing risks (to allow for any project delays). Unrisked our valuation increases to US$24.7m or 4.3p per share.
A key sensitivity to our valuation is the gas price, at US$8/mcf our valuation of Mako increases to US$31.0m or 5.3p per share (risked), US$44.3m or 7.6p per share (unrisked) and at US$10/mcf our valuation increases to US$40.8m or 7.0p per share (risked), US$58.4m or 10p per share (unrisked).
Combined, we value Empyrean's portfolio at 19p per share, a 280% premium to the share price.
Condor Gold is developing the La India gold mine in Nicaragua within a large, relatively underexplored, licence area with a history of previous gold production dating from the 1930s to the mid-1980s. Initial expectations are for the production of around 100,000oz gold per year from open-pit mining of the main La India vein system and nearby high-grade satellite mineralisation. Production at this level would place Condor Gold among the five largest gold producers on London’s AIM Market. The first phase of open-pit mining is expected to evolve to underground operations later in the mine’s life and significant additional exploration targets offer scope for the discovery of completely intact vertical epithermal mineralised systems on the down-thrown side of faults ling to the south of the current proposed mining area at La India.
Companies: Condor Gold
Companies: Genel Energy
Another impressive year for Iofina, which has reporting a second consecutive year of record iodine production and EBITDA. It also launched its new CDB extraction division, reduced debt through a successful fundraise and delivered the next phase of expansion in its core iodine business with the start-up of IO#8 on time and within budget. Weak oil prices have affected brine water supplies to this plant, causing it to be idled. However, management is optimistic IO#8 will restart in H2 as oil prices recover. We are reinstating estimates that assume a gradual restart from August, and have set a new DCF-based price target of 32p/sh, down from 35p previously.