Altus Strategies* (ALS LN) – BUY – 115p – Tabakorole resource climbs 54% with a 20% increase in grades | Amur Minerals* (AMC LN) – Interims Ariana Resources* (AAU LN) – Interim results and 2020 guidance | Bluejay Mining* (JAY LN) – Interims highlight ilmenite offtake agreements, licensing progress and low operating costs | BlueRock Diamonds (BRD LN) – Pit expansion combined with new capacity and recovery of larger stones to lead significant increase in diamond production | Bushveld Minerals* (BMN LN) – BUY – 45.7p – Production sharing agreement with Orion financing Phase III expansion at Vametco with notes to refurbish Vanchem | Chaarat Gold* (CGH LN) – BUY – 57p – Kapan operations update | Orosur Mining* (OMI LN) – Agnico Eagle joins Newmont at Anza | SolGold* (SOLG LN) – Delivery of Alpala PFS delayed by Covid19 restrictions | Tertiary Minerals* (TYM LN) – Progress report on Nevada exploration and MB Fluorspar project | Tri-Star Resources* (TSTR LN) – To be suspended pending publication of annual results
Companies: ALS AMC AAU JAY BRD BMN CGH SOLG TYM TSTR
Botswana Diamonds (BOD LN) – Raising £300,000 for exploration | Bushveld Minerals* (BMN LN) – Vanadium rental agreement through VERL to fund 5MW flow battery | Gem Diamonds (GEMD LN) – 143 carat diamond recovered from Letšeng | Hochschild Mining (HOC LN) – Revised FY20 guidance | Kodal Minerals* (KOD LN) – BUY – Kodal raises £654,000 from sale of shares by Riverfort investors | Mkango Resources* (MKA LN) – EU Action Plan for critical raw materials. | Panther Metals (PALM LN) – Geophysical encouragement from Annaburroo | Red Rock Resources (RRR LN) – Option over Slovak Gold assets | Rio Tinto (RIO LN) –Simandou controversy may be moving closer to resolution | Vast Resources* (VAST LN) – Baita Plai update
Companies: BOD BMN GEMD HOC KOD PALM RRR RIO VAST
Adriatic Metals* (ADT1) – Government approval granted for land extension at Vares Silver project | Amur Minerals* (AMC LN) – Board appointment | Ariana Resources* (AAU LN) – Underground mining options considered and new vein discovered at Kiziltepe | BlueRock Diamonds* (BRD LN) –Diamond sales from Kareevlei average US$330/carat | Bushveld Minerals (BMN LN) BUY - Valuation 46.5p – Vanadium sales rise in first half despite Lockdown | Ferro-Alloy Resources (FAR LN) – Development of electrolyte for VFBs | Kodal Minerals* (KOD LN) – BUY – Sinohydro MoU offers potential to realise significant value | Sunrise Resources (SRES LN) – CS Project appeals window closes without any objections
Companies: ADT1 AMC AAU BRD BMN FAR KOD SRES
Adriatic Metals* (ADT1) - Non-Executive Director appointed | Alba Minerals (ALBA LN) – £450,000 fund-raising | Bluebird Merchant Ventures (BMV LN) – Southern Gold JV stake in S Korean JV “deemed” to be offered for sale | Bluejay Mining (JAY LN) – BUY, Target 20p – Public consultation highlights strong government and local citizens | Empire Metals (EEE LN) –– Munni Munni PGM drill results indicate potentially practical mining widths | Bushveld Minerals* (BMN LN) – Bushveld renegotiates agreement and further 65.1% of Enerox
Companies: ALBA BMV JAY EEE BMN
Ariana Resources* (AAU LN) – Partial disposal of Salinbas and Zenit Madencilik | Bushveld Minerals* (BMN LN) - MIT team look to chitin for large-scale flow batteries | Eurasia Mining* (EUA LN) Suspended – Launch formal sale process under UK Takeover code | Greatland Gold (GGP LN) – Additional licence acquired in the Paterson region | KEFI Minerals * (KEFI LN) – Tulu Kapi project finance update | Metals Exploration (MTL LN) – Update on operations and AIM Suspension | Rambler Metals* (RMM LN) – Progress report on financing | Richland Resources (RLD LN) – Suspension | SolGold* (SOLG LN) – Offer for Cornerstone | Versarien* (VRS LN) – Innovate fund extends £5m to Versarien
Companies: AAU BMN EUA GGP KEFI MTL RMM RLD SOLG VRS
Amur Minerals* (AMC LN) – BFS strategy | Bushveld Minerals* (BMN LN) - Strong Buy - (Valuation 58 from 54p) - Vanadium price to recover on strong demand for structural steel for Stimulus projects | Nano One Materials (NNO CN) - Coated single crystal cathode material provides 4x the longevity | Power Metals Resources* (POW LN) – Covid19 delays some gold license applications around Ballarat in Australia | Strategic Minerals* (SML LN) – 2019 financial results | Strogbow Exploration (SBW CN) – Drilling restarted in Cornwall at new discovery site | Sunrise Resources Plc (SRES LN) – Outcome of CS Project environmental consultation | Talga Resources (TLG LN) – Talga shares take off as interest in Li-ion anode exceeds 300% of Vittangi anode project capacity
Companies: AMC BMN 0T6N SML SRES
Bushveld is an integrated vanadium mining, processing and technology businesses. The South African group owns 74% of Vametco and 100% of the Vanchem. Bushveld Energy (84%) is developing vanadium redox batteries for grid use in SA. Bushveld FY 2019 figures are dominated by the positive revaluation of the acquisition of Vanchem (100%) for US$55.8m in November 2019.
Companies: Bushveld Minerals Limited
Bushveld Minerals* (BMN LN) – Vanadium prices take off on news of strong demand from China | Caledonia Mining* (CMCL LN) – De-listing from TSX | Shanta Gold (SHG LN) – Gold recoveries to add 1pp by year end | SolGold* (SOLG LN) – £26m fundraising | Trans-Siberian Gold (TSG LN) – Refinancing increases the revolving credit line capacity and secures lower rates
Companies: BMN SHG SOLG TSG
Adriatic Metals* (ADT1 LN) – Latest drilling at Rupice confirms extension of mineralisation to south and down dip. | Bushveld Minerals* (MBN LN) –– Strong vanadium sales and weaker rand offset impact of South African lockdown in Q1 | Cora Gold* (CORA LN) – ESIA to be carried by Digby Wells | Pensana Metals (PM8 AU) – Pensana awarded additional exploration licence close to Longonjo | Phoenix Copper* (PXC LN) – Empire oxide resources increase | Rambler Metals* (RMM LN) – Q1 copper production stable as higher grade areas are developed
Companies: ADT1 BMN CORA PXC RMM
Research Tree provides access to ongoing research coverage, media content and regulatory news on Bushveld Minerals Limited.
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Despite the absence of new drilling activity, Trinity's Q3/20 production has remained robust, averaging 3,135bopd - an 11.3% YoY increase (Q3/19: 2,816bopd). YTD 2020 average production volumes have averaged 3,232bopd, a 9.8% YoY increase (YTD 2019: 2,943bopd), with 2020 production guidance remaining unchanged at 3,100-3,300bopd. Oil price realisations YTD 2020 have averaged US$37.3/bbl and, as a result, no Supplemental Petroleum Tax (SPT) will be payable in respect of the first three quarters of 2020. Cash as at 30 September 2020 was US$22.2m (30 June 2020 US$19.7m). Elsewhere, we view the proposed Budget reforms to the SPT regime as an important step forward by the Trinidad and Tobago Government and a recognition that SPT needs reforming. The proposed reforms will enhance cash flows between US$50-US$75/bbl and therefore allow companies to invest to grow production and deliver attractive returns for shareholders. We update our valuation and reiterate our price target at 31p per share, a 250% premium to the current share price.
Companies: Trinity Exploration & Production Plc
Notwithstanding COVID-19, Pan African’s (PAF) normalised financial results for FY20 were materially ahead of our expectations, driven by a US$9.9m positive variance in the direct cost of production (see Exhibit 3). In consequence, the group announced a more than fivefold increase in its proposed dividend for the year in US dollar terms to a record ZAR312.9m, putting it among the top 14 dividend-paying precious metals companies globally in terms of yield (see Exhibit 15). While FY20 represented a step change in PAF’s profitability compared with FY19, we believe that another step change is possible in FY21 under the influence of higher gold prices, close control of costs as new projects come on stream, a benign foreign exchange environment, a rising production profile and the maturity of all remaining hedging contracts prior to December 2020.
Companies: Pan African Resources PLC
Shanta Gold (AIM: SHG) has announced this morning its production and operational results for the quarter ended 30th September 2020 – see Fig 1. Overall this was a robust performance (from one of the most consistent operators in the sector) in the face of the pandemic and a very busy quarter for the company at corporate level. QoQ production fell to 19,973 oz and AISC rose to $883/oz – both caused by a temporary drop in grade – but the ongoing strength in the gold price resulted in a 16% and 46% increase in EBITDA QoQ and YTD respectively. There was an increase in net debt to $5.1m which can be explained by the $7.1m cash outlay for the West Kenya projects as well as the reduction in the hedge book (they also have $5.9m of gold dore in the gold room). The company remains on track to hit its full year guidance of 80-85koz of production at an AISC of $830-880/oz which would make it the third year in a row they have hit their unaltered guidance for the year. This would be a remarkable achievement for a major gold miner operating in a developed market let alone one operating in the South West corner of Tanzania. Likewise the fact the company has recorded zero lost time injuries makes it nearly three years in a row with no LTIs. With the greenlight for Singida and a scoping study completed for the West Kenya Project during the quarter, the company can look forward to leveraging this operational expertise across a larger and longer life production base (c.220Koz of annualised production). We continue to believe the market is still to wake up to this given a market cap of US$219m, next to no debt and EBITDA annualising at $90m.
Companies: Shanta Gold Limited
Talitha Kuparuk resource update
Companies: Pantheon Resources plc
Salt Lake's September 2020 Quarterly update reported that the Lake Way project is now 63% complete. Construction of the process plant is on-schedule with practical completion and first SOP production planned for the March quarter 2021.
Drawdown of the Senior Facility Agreement funds and repayment of the Taurus bridge loan is expected in November.
Companies: Salt Lake Potash Limited
Shanta Gold (AIM: SHG) has announced this morning results of its Scoping Study for the West Kenya Project, which it recently acquired from Barrick Gold (for US$14.5m). The scoping study concludes with a post-tax NPV8% of US$340m and IRR of 110% at a gold price of $1700/oz. We expect this will be seen as an extremely positive result by both management and the market, which is currently valuing the company at US$209m or GBp19/sh v GBp31/sh equivalent value of the post-tax US$340m NPV for the West Kenya Project alone. The West Kenya Project is located in western Kenya in the county of Kakamega – see Fig 1 overleaf. The project lies within the Liranda Corridor some 300 kilometres northwest of Nairobi, the capital of Kenya, and 30 kilometres north of the town of Kisumu. The Project comprises two greenfield deposits – Isulu and Bushiangala – which have a total NI 43-101 compliant inferred resource of 1.18 Moz Au at 12.6 g/t. These are the most advanced assets within the company’s 1200km2 license area.
Another impressive drilling result from Touchstone, which has announced a significant gas discovery with the Chinook-1 well on the Ortoire block, onshore Trinidad; its third in a row. This well exceeded pre-drill expectations again and further confirms the accuracy of the company’s geological model. This not only de-risks the upcoming Cascadura Deep and Royston prospects but also opens up significant follow-on exploration opportunities. Touchstone has already identified 21 additional prospects on the Ortoire block representing five years of drilling inventory, for which we currently give zero value…this story has legs!
Companies: TXP TXP PNW1 PBEGF
GeoPark (GPRK US)C; Target price US$20 per share: Drilling at CPO-5 has started - The 3Q20 operating update did not contain any surprises, with overall production increasing by 5% vs the previous quarter, reflecting higher sales in Brazil, Argentina and Chile. Importantly, gross production at Llanos-34 is back to 60 mbbl/d with some work-over backlog and development drilling having restarted. Overall net production (across all of GeoPark’s assets) was 40 mboe/d at the end of September and FY20 production guidance of 40-42 mboe/d has been reiterated (2H20 capex guidance of US$25-35 mm). Drilling at CPO-5 (GeoPark WI: 30%) has now commenced with the Indico-2 appraisal well. With the Indico-1 well still producing 5,169 bbl/d since first oil in December 2018, Indico-2 could add 60% to CPO-5 overall production by YE20 in a success case. GeoPark will publish its 2021 capex budget on 4 November. We view this as an important event as this will provide further visibility on a very exciting drilling programme with 5-7 wells at CPO-5 and 1-2 wells in Ecuador. The exploration program for 2021 will likely test the continuity of the Guadalupe play encountered on Llanos-34 into CPO-5.
Tethys Oil (TETY SS)C; Target price SEK75.00 per share: Initiating coverage - Tethys Oil is a well-funded, dividend-paying, Sweden listed US$160 mm market cap E&P with ~25 mmbbl 2P reserves in Oman and ~10 mbbl/d WI production. The company stands apart from its peers in three principal ways: (1) It has achieved “textbook” execution, turning what was initially a small uncommercial onshore discovery on a tiny portion of Blocks 3&4 into a large field that has already produced ~100 mmbbl with a further ~120 mmbbl 3P reserves. (2) The production is very cash generative even at US$40/bbl. At US$45/bbl, even at the currently OPEC constrained production rate, operating cashflow funds all development plus some exploration activities and allows Tethys to pay a 5% dividend. (3) Tethys is conservatively run with US$60 mm in cash and no debt. Historically, the story was about steady y-on-y production, reserves and dividend growth. While these features are still present, an investment in Tethys now also offers diverse exposure to high impact exploration with drilling activities on recently acquired onshore blocks expected to start before YE20. Our target price of SEK75 per share reflects ReNAV and implies over 70% upside.
IN OTHER NEWS
Alvopetro (ALV CN): Production update in Brazil – 3Q20 sales were 1,764 boe/d at the Caburé Project.
Maha Energy (MAHA-A SS): Production and capex guidance update – FY20 production (mostly in Brazil) is expected to stand at 3,700–4,000 boe/d (4,000-5,000 boe/d previously). The FY20 capex budget increased by US$8.7 mm to US$24 mm. YE20 production is expected to be 5,200 – 5,700 boe/d.
Pantheon Resources (PANR LN): Resources update in Alaska – The Kuparuk formation at the Talitha project is estimated to contain 1.4 billion bbl of oil in place (OIP) and a Prospective Resource of 341 mmbbl as a most likely case.
Touchstone Exploration (TXP LN): Discovery in Trinidad – The Chinook well encountered 589 net feet of gas pay in three unique thrust sheets in the Herrera sands. Additional natural gas pay of ~20 net feet was encountered in the shallower Cruse formation. Completion and testing of the well is expected to be undertaken in 1Q21.
Trinity Exploration and Production (TRIN LN): 3Q20 operational update in Trinidad – 3Q20 production was 3,135 bbl/d. The company held US$22.2 mm in cash as at 30 September. FY20 production guidance remains 3,100-3,300 bbl/d.
Aker Bp (AKERBP NO): 3Q20 update in Norway – Aker BP produced 201.6 mboe/d in 3Q20. The FY20 production guidance of 205-220 mboe/d is reiterated.
UK Oil & Gas (UKOG LN), Angus Energy (ANG LN) and Egdon Resources (EDR LN): Onshore UK licence relinquished – Long-reach/shallow wells at the Holmwood prospects are neither technically viable nor economically feasible. The licence has been relinquished.
FORMER SOVIET UNION
Caspian Sunrise (CASP LN): Operating update in Kazakhstan – Production at the MJF structure averaged ~1,340 bbl/d. The completion of maintenance activities, the return to production of Well 141 and the installation of a pump at Well 151 are expected to increase production capacity to 2,200 - 2,500 bbl/d.
Enwell Energy (ENW LN): Ukraine update – 3Q20 production in Ukraine was 4,629 boe/d. The company held US$55.7 mm in cash at the end of September.
Kosmos Energy (KOS US/ LN): RBL Redetermination – Kosmos’ RBL credit facility has been redetermined with US$1.32 billion, a reduction of US$130 mm from the previous drawn amount of US$1.45 billion. Repayment of the reduction in borrowing base will be made from available liquidity in 4Q20.
EVENTS TO WATCH NEXT WEEK
20/10/2020: Touchstone Exploration (TXP LN) - Webinar
Companies: TXP ALV ALVOF A6Y DETNOR AKERBP DETNOR DETNF ARC RO1 CASP ROXIF GPRK KOS 7M7 0GEA MAHAA PANR P3K PTHRF TETY TETY UKOG 0UK UKLLF
Jubilee today announces its quarter to September operational results which were a record – in terms of both production and financial performance. In all, 15koz of Platinum Group Metals were produced along with 136,1kt of chrome concentrate. Record high production led both to high attributable revenues of $23.1m and high attributable earnings of $15.2m for the quarter; we expect this performance to continue.
Companies: Jubilee Metals Group PLC
Altus Strategies* (ALS LN) – BUY, Target 115p – 5,000m trenching programme launched at the Laboum Gold Project, Cameroon | Arc Minerals* (ARCM LN) – Annual report describes transformational year for Arc as it focusses on Zambian copper prospects | BlueRock Diamonds (BRD LN) – Third quarter figures highlight substantial improvement in volume and grade | Keras Resources* (KRS LN) – Progress in Togo and Utah | Power Metal Resources* (POW LN) – Launch of website galley | Shanta Gold (SHG LN) – West Kenya Scoping Study confirms attractive project economics | Yamana Gold (AUY LN) – Admission to London’s Official List
Companies: ALS ARCM BRD KRS POW SHG
i3 Energy has announced that it has published an Admission Document in respect of the proposed acquisition of Toscana Energy Income Corporation.
As previously announced, the Toscana acquisition is to be consummated via a plan of arrangement. Due to its size and nature when it was announced on 23 June 2020, the Toscana Acquisition constitutes a reverse takeover of the company pursuant to the AIM Rules. As a result, the Toscana Acquisition requires approval by i3 Shareholders by way of an ordinary resolution at a general meeting of the Company to be held on 29 October (amongst other conditions).
Companies: i3 Energy Plc
Oil posted a small weekly gain on tentative signs that demand is picking up even as a new wave of coronavirus cases casts a shadow over the market.
Futures in New York edged lower on Friday, but still managed to record an advance of 0.7% this week on shrinking US crude stockpiles and signs of improving demand in China and India. Gains were capped by record new virus cases from Germany to Portugal and the biggest surge in US daily infections in two months.
Crude futures in New York have clung close to the $40-a-barrel mark since September amid uncertainty around a demand recovery as the virus rages. Meanwhile, OPEC producers and allies see a risk of an oil surplus next year if Libya's production rises and demand remains depressed.
At the same time, the market's structure continues to strengthen, with the spread between Brent's nearest contracts at its narrowest since late July. For West Texas Intermediate futures, the prompt spread rallied to its tightest contango in a month.
West Texas Intermediate for November declined 8 cents to settle at $40.88 a barrel.
Brent for December settlement lost 23 cents to $42.93 a barrel. The contract rose 0.2% this week.
Prices pared earlier losses on Friday after American retail sales and consumer sentiment indicators topped estimates.
The Organization of Petroleum Exporting Countries and its allies are facing pressure to postpone their plans for tapering output cuts. Given the uncertainty over the oil demand outlook, the right course of action is to wait for now, JPMorgan analysts including Natasha Kaneva wrote in a report. The move to add another 2 million barrels of day onto the market in January could be postponed by a quarter, the report said.
OPEC+ is also contending with the unexpected return of Libyan oil output, which hit 500,000 barrels a day this week. The group forecasts that global oil supplies could increase by 200,000 barrels a day next year if Libya manages to revive supply and the pandemic hits demand harder than expected, according to a document seen by Bloomberg.
Companies: FOG PVR 88E DGOC EME TRIN UOG
Increase in North Kelsey stake
Companies: Union Jack Oil Plc
Jersey Oil & Gas has provided a technical presentation and video which summarises much of the subsurface and developmental analysis undertaken by the company as part of the concept select stage. These materials have been made available on the company's website and we encourage investors and potential investors to watch the 5 minute video. We will review the material and comment in due course. The video is available at: https://www.jerseyoilandgas.com/media/videos/
Companies: Jersey Oil & Gas PLC
We are updating our estimates following Iofina’s Q3 2020 update to factor in the recent COVID-19 related demand slowdown and iodine price-easing first flagged at its interim results. This is the first time we have adjusted estimates since the pandemic, so this may be viewed as overdue, certainly the share price would say so. What remains clear is that Iofina’s underlying business continues to perform well in the face of COVID-19 challenges. Its balance sheet has been dramatically improved by the recent refinancing, and while the pandemic is having some impact, Iofina’s growth outlook remains strong.
Companies: Iofina plc