Chaarat Gold is an AIM-listed gold mining company currently operating the polymetallic Kapan mine in Armenia as well as the construction ready Tulkubash project whilst also running the early development stage Kyzyltash projectin the Kyrgyz Republic. The Company has gone through a transformational period with a new Board and a new management team coming in and setting a new business strategy for developing a leading mid-tier FSU based gold producer focused on consolidation opportunities in the sector and organic growth within its portfolio of existing assets.
Companies: Chaart Gold
Amur Minerals* (AMC LN) – TEO update | Ariana Resources* (AAU LN) – Tavsan resource update | Chaarat Gold* (CGH LN) – Laying out production growth pipeline | Greatland Gold (GGP LN) – Latest drilling results extend Havieron mineralisation 220m northwest | Keras Resources* (KRS LN) – Directors buy 11m shares at 0.14p
Companies: AMC AAU CGH GGP KRS
Chaarat Gold* (CGH LN) - BUY– Kyzyltash development roadmap | Dark Horse Resources Ltd (DHR AU) – Scandinavian exploration projects | Ormonde Mining* (ORM LN) – Update on Spanish gold projects | Tietto Minerals (TIE AU) – Recent drilling extends footprint of Abujar Gold Project | Vast Resources* (VAST LN) – Equipment arriving at Baita Plai ahead of the Jul/20 commissioning
Companies: CGH ORM VAST
Chaarat published a positive 1Q20 operational update, reporting a significant 14% production cost improvement at Kapan and maintaining FY20 guidance of 55koz of gold equivalent. The announcement also describes operational improvements at Kapan, which builds further confidence in Chaarat’s forward planning and execution capabilities.
Kapan’s production costs were US$1,074/oz during the period versus US$1,242/oz during 4Q19. Tonnes mined were up slightly QoQ, overall recoveries improved by 1.1% despite an increase in difficult-to-process oxide ores, and gold-only recoveries improved by 2.1%.
Chaarat has responded positively to the COVID-19 pandemic by supporting its local communities. Examples in the announcement include in Armenia providing computers to local school children and donations to the local hospital; and in Kyrgyz Republic, Chaarat provided food and safety equipment to the Chatkal region and donated PCR equipment to the Kyrgyz Ministry of Health.
Anglo Asian Mining* (AAZ LN) - BUY – Strategy update | Aura Energy* (AURA LN) – General meeting rejects proposed new directors | Bluejay Mining plc (JAY LN) – Chairman’s statement highlights work with Rio Tinto and near-term ilmenite (titanium) production | Chaarat Gold* (CGH LN) - BUY – Quarterly production increases, costs come down, FY20 target reiterated at 55koz | Strategic Minerals* (SML LN) – Draft environmental programme submitted for Leigh Creek
Companies: AAZ AURA JAY CGH SML
Aura Energy* - (AURA LN) – Issue of shares | Altus Strategies* (ALS LN) – Tabakorole geophysical survey identifies new targets | Caledonia Mining* (CMCL LN) – AGM Procedures | Chaarat Gold* (CGH LN) - BUY – Completion of a $13.8m placing | Empire Metals* (EEE LN) (formerly Georgian Mining GEO LN) – Acquisition of control in Australian Palladium Deposit | Mkango Resources* (MKA LN) - COVID-19 safety measures for Malawi | Scotgold Resources* (SGZ LN) BUY – 119p – Earnings update: delivering gold at Cononish | Serabi Gold* (SRB LN) –– Appointment of non-executive director | Vast Resources* (VAST LN) – Baita Plai parts and equipment shipment update
Companies: AURA ALS CMCL CGH GEO MKA SGZ SRB VAST
Avacta (AVCT): Corp | Chaarat Gold Holdings (CGH): Corp | Shield Therapeutics (STX): Corp
Companies: AVCT STX CGH
We initiate coverage of Chaarat, an AIM-listed gold producer making the transformation from junior to mid-cap. It is one of the few London gold companies pursuing an M&A strategy with actions rather than just words. 2019 saw the beginning of Chaarat’s new trajectory with the acquisition of the Kapan operation in Armenia and the start of construction at Tulkubash, its heap leach mine in the Kyrgyz Republic.
In the medium term this will be followed by development of its 4.5Moz Kyzyltash Project, and most likely supported by further M&A activity. Momentum has been slightly affected by COVID-19; however, we anticipate this to be a six-month slowdown with no lasting negative effect. For investors seeking gold company exposure with a consolidation strategy, Chaarat has Resources of >9Moz and a risked NAV of £279m.
Chaarat announced it has raised at least US$12m in a placing and debt for equity swap. This strengthens the balance sheet while ensuring funding to progress drilling and construction at the flagship Tulkubash – first gold expected 3Q22. Chaarat’s Executive Chairman Martin Andersson, through his Labro vehicle, will convert $5m of loans to equity and invest $5m of new equity. A further $2m equity has been secured from management and a major shareholder.
Anglo Asian Mining* (AAZ LN) - BUY – 18.2koz produced in Q1/20 with 75-80koz FY19 guidance on target | Ariana Resources* (AAU LN) 345p, Mkt Cap £35.0m – Q1 Production report | Atalaya Mining (ATYM LN) 119p, Mkt Cap £154.5m –Production ramps to design capacity at Proyecto | Riotinto Bluejay Mining* (JAY LN) 3.87p, Mkt cap £36m – Exploration Licences in South Greenland offer great potential | Chaarat Gold* (CGH LN) - BUY – Proposed equity raise | Highland Gold (HGM LN) 231p, Mkt Cap £842m – Strong FY19 with a third interim dividend announced by the Board | Rainbow Rare Earths (RBW LN) 2.03p, Mkt Cap £7.7m – Export of another 100t of rare earth concentrate | Strategic Minerals* (SML LN) 0.47p, Mkt Cap £7.7m –Cobre magnetite sales | URU Metals* (URU LN) 120p, Mkt Cap £0.9m – Permitting update for the Zebediela project in South Africa
Companies: AAZ AAU ATYM JAY CGH HGM RBW SML URU
BlueRock Diamonds* (BRD LN) – Extension to lockdown in South Africa till end April | Bluejay Mining* (JAY LN) – MoU with trader for 200ktpa of ilmenite | Chaarat Gold* (CGH LN) – FY19 financial results | Hochschild Mining (HOC LN) – Temporary suspension of the final dividend | Orosur Mining* (OMI LN) – Q3 results | Phoenix Copper* (PXC LN) – Reports a 32% reduction in losses for 2019 | Rambler Metals* (RMM LN) – Covid19 mitigation measures | Serabi Gold* (SRB LN) –– March delivers highest monthly gold production since operations began
Companies: BRD JAY CGH HOC OMI PXC RMM SRB
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A number of REITs have the ability to thrive in current market conditions and thereafter. Not only do they hold assets that will remain in strong demand, but they have focus and transparency. The leases and underlying rents are structured in a manner to provide long visibility, growth and security. Hardman & Co defined an investment universe of REITs that we considered provided security and “safer harbours”. We introduced this universe with our report published in March 2019: “Secure income” REITs – Safe Harbour Available. Here, we take forward the investment case and story. We point to six REITs, in particular, where we believe the risk/reward is the most attractive.
Companies: AGY ARBB ARIX BUR CMH CLIG DNL HAYD NSF PCA PIN PXC PHP RE/ RECI SCE SHED VTA
U.S. futures and European stocks dropped on Friday as investors mulled a reported conflict among policy makers over a stimulus package for the single-currency region, as well as political upheaval in France.
The Stoxx 600 Index fell after Bloomberg News reported the European Central Bank is facing a potential rift over how much their emergency bond-purchase program should stay weighted toward weaker countries such as Italy. The euro fluctuated following French President Emmanuel Macron's decision to name a new prime minister after asking his government to resign. Rolls-Royce Holdings Plc slumped after the British jet-engine maker said its exploring options to raise funds to strengthen its balance sheet.
The dollar was slightly down, posting its first weekly drop in a month, while American cash equity and bond markets were shut for Independence Day. President Donald Trump will attend an early July 4 celebration at Mount Rushmore with thousands of guests who won't be required to wear masks, while his U.K. counterpart Boris Johnson urged Britons to act responsibly as pubs prepare to re-open and the government lifts quarantine rules on travel for 60 countries.
The friction at the ECB highlights the risk to markets should promised stimulus measures fall short. Investors continue to weigh policy support and upbeat economic data against relentless new outbreaks of the virus. U.S payrolls figures Thursday fuelled optimism of a V-shaped recovery in the world's biggest economy, even as Florida reported that infections and hospitalizations jumped the most yet, and Houston had a surge in intensive-care patients. Emerging-market stocks posted the biggest weekly gain in a month.
Elsewhere, crude oil dipped but remained on track for a weekly gain.
Companies: TGL JSE IAE ADME BP/ DGOC ENOG NTQ NTOG PMO RBD ROSE RDSA UKOG TRIN
Considering the environment, this sale is positive and marks the completion of the $15bn divestment programme started after the acquisition of the shale assets from BHP in 2018. Overall, BP’s strategy in downstream is to bring stable earnings, to offset volatility in upstream. In this regard, expanding renewables activities would seem appropriate to BP. While, BP has no competitive advantage in this field, exposure to renewables will allow the oil majors to keep their oil & gas activities.
Companies: BP Plc
Acquisitions and creditors update
Companies: Premier Oil
Over the last 18 months, Powerhouse has cemented its relationship with Peel Environmental, which is targeting the development of at least 30 distributed modular generation (DMG) plants across the UK. Each of these will potentially generate £0.5m in annual licence fees for Powerhouse. This roll-out is conditional on shareholders approving the proposed acquisition of former development partner Waste2Tricity (W2T) at the general meeting on 14 July
Companies: Powerhouse Energy Group
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.
Implications of the gold-silver metallurgy at Empire, Idaho
Yesterday, Phoenix Copper published a metallurgical report on the leaching of its gold-bearing mineralisation from the Empire resource area in Idaho. This showed high recoveries for gold and silver using standard cyanide and non-standard Ammonium Thiosulphate leaching (comparable leach times, reagent consumption and recovery). The implications of these tests may be far ranging for Phoenix as it enables it to consider bringing forward precious metals production from the area, with the following benefits: 1) quicker permitting for a non-cyanide process; 2) cheaper reagents; 3) earlier establishment of mine site infrastructure to assist ongoing economic studies and; 4) cash flow in a robust gold price environment. More test work on the gold recovery process remains to be completed to establish the optimum leaching and recovery parameters. We still see fair value at 34p/sh (see research from 12/05/2020 for full details) but note that Phoenix management is actively seeking to bring forward value in its projects. In the meantime, we have drilling results and a (potential) resource upgrade to look forward to shortly from the Red Star lead-silver project as well as a funded resource drilling program to establish a whole resource for Empire – and not just the base metal-rich zones.
Companies: Sirius Real Estate
Enteq Upstream PLC (LON:NTQ) has released full-year (FY) results for the year-end March 2020 with commentary on the ongoing trading environment. The company reported revenues of around US$10.9mln, underlying adjusted EBITDA (earnings before tax interest depreciation and amortisation) of US$3.1mln,
Companies: Enteq Upstream
Rockfire Resources, the gold and copper exploration junior with projects in northern Queensland has recently commenced a major £0.8m drilling programme on Plateau, its most advanced project. Drilling is likely to be followed by a resource update in late 2020 and a scoping study in Q1 2021. We believe that the updated resource estimate could be commercially significant. This reflects the promising drilling results post July 2019’s resource assessment and the potential for the drilling programme to expand the resource base given the analogous Mt Wright mine geology 47 km to the NE. The new drilling programme will include diamond drilling for the first time which will enable deeper higher-grade targets to be targeted. The drilling programme has been underpinned by the recently announced £1m raise. We believe the scope for positive news flow in the coming months is excellent while the gold market backdrop should be supportive for gold exploration as well as production plays over the balance of 2020.
Companies: Rockfire Resources
Warren Buffett once said that as an investor, it is wise to be ‘fearful when others are greedy and greedy when others are fearful’. Fear is not in short supply right now.
Companies: OPM ALU ANCR BLV CONN CRC STU GATC HAT LEK MMH MCB MWE NXR NTBR NOG PAF PEG RFX SRC TEF TEG TPT VTU WYN XLM
Shearwater sells resilience and today's trading update shows us how resilient demand has been for its products and services. The Group has swung to EBITDA profitability and cash flow is well ahead of expectations. The macro themes of cyber security and remote working are supportive of robust demand levels going forward. We are maintaining our forecasts. Buy.
Companies: Shearwater Group
InfraStrata's acquisition of the iconic Harland & Wolff (H&W) shipyards in Northern Ireland has been transformational for the group, and with a carefully planned growth strategy, there is a clear route to cash breakeven in the short term. Over the medium to long term, these facilities could support a c£400m revenue business. With the company trading at a c30% discount to its H1/20A book value and c65% to its Adj NAV, we initiate with a Buy recommendation.
Park and ride – initiating coverage
Empire Metals* (EEE LN) - Munni Munni platinum group metals project acquisition work program | Erris Resources (ERIS LN) – Resumption of Loch Tay exploration | Goldstone Resources (GRL LN) – Reduced loss in 2019 | KEFI Minerals * (KEFI LN) – Tulu Kapi project finance on track for Oct/20 closure and full construction start in Q1/21 | Power Metals Resources* (POW LN) – Interim results | Vast Resources* (VAST LN) – Carlibaba licence granted
Companies: EEE ERIS GRL KEFI POW VAST
Davenport owns three perpetual mining licenses and two exploration licences covering 659km2 in the South Harz potash basin in central Germany. Davenport's experienced European-based management is now focussed on developing Europe's largest potash inventory of 5.3 billion tonnes at 10.8% K2O.
Companies: Davenport Resources Ltd