Arc Minerals* (ARCM LN) – Zamsort hits mineralisation in drilling at its new Fwiji target | Kavango Resources (KAV LN) – Strategic joint-venture in Botswana | Pensana Rare Earths (PRE LN) – Tanzanian gold royalty | Power Metal Resources* (POW LN) – Strategic joint-venture in Botswana
Companies: ARCM KAV PRE POW
Botswana Diamonds (BOD LN) 0.73p, Mkt Cap £4.5m – Kimberlite intersected in drilling at Marsfontein | Central Asia Metals (CAML LN) 152p, Mkt Cap £267m – Sasa plant suspended after tailings leak | Kenmare Resources (KMR LN) 251p, Mkt cap £263m – Relocation of the concentrator underway | Mkango Resources* (MKA LN) 6.25p, Mkt cap £7.9m – Heavy minerals exploration success in Malawi | Power Metal Resources (POW LN) 1.275p, mkt cap £10.2m – Option exercised for Canadian silver project | Strategic Minerals* (SML LN) 0.43p, Mkt Cap £7.4m – Reports H1 profit as Leigh Creek moves ahead and Cobre masters Covid19 challenges
Companies: BOD CAML KMR POW SML
Ariana Resources* (AAU LN) – Kiziltepe remains on track amid strong metal prices | Altus Strategies* (ALS LN) - BUY – 100p – Interims | Galantas Gold (GAL LN) – Q2/H1 results reports that a strategic review of the future of the Omagh mine is underway | Ganfeng Lithium (002460 SHE) – Ganfeng Lithium reports difficult first-half | IronRidge Resources* (IRR LN) – IronRidge joins European Battery Alliance | Power Metal Resources* (POW LN) – Geophysics helps refine targets at Molopo Farms | Sunrise Resources (SRES LN) – Closing of £250,000 broker option completes £1m fundraising | URU Metals* (URU LN) – Drilling planned for the Zebediela project in South Africa
Companies: AAU ALS 002460 IRR POW SRES URU
Gold Fields (GFI JSE) – R21,519, Mkt cap R190bn – Profits rise as gold prices lift margins | Power Metal Resources* (POW LN) 1.35p Mkt Cap £9.6m – Increased ownership in Haneti project | Shanta Gold (SHG LN) 17p, Mkt Cap £143m – Barrick becomes a 6.4% investor following the sale of the West Kenya project
Companies: GFI POW SHG
Altus Strategies* (ALS LN) BUY – 100p – General Counsel appointment | Antofagasta (ANTO LN) – Earnings dip in H1/20 on weaker copper prices, 6.2c interim dividend announced | Edenville Energy* (EDL LN) – Rukwa wash plant resumes operations | Oriole Resources (ORR LN) – Directors award themselves share options | Power Metal Resources* (POWLN) – Australian gold JV operational update | Talga Resources (TLG LN) – A$10m placement
Companies: ALS ANTO EDL ORR POW
Companies: POW GRL KAV SOLG
Europa Metals Limited (EUZ LN) 18 pence, Mkt Cap £1.7m – Marketing arrangements for Toral zinc, lead, silver project in Spain | Lucara Diamonds (LUC CN) C$0.59, Mkt Cap C$234m – Maintaining operations through Covid19 | Panther Metals (PALM LN) 11.25p, Mkt Cap £6.5m – Progress report on Big Bear gold exploration project | Petropavlovsk (POG LN) 33p, Mkt Cap £1,299m – Board changes announced | Power Metal Resources* (POW LN) 1.25p, mkt cap £8.9m - Drilling plans finalised for Botswana Molopo Farms Complex | Versarien* (VRS LN) 39.5p, Mkt cap £67m – Results statement highlights underlying growth of new graphene products
Companies: EUZ LUC PALM POG POW VRS
Arc Minerals* (ARCM) – Arc signs exclusivity with Anglo American as majors step into Zambia | Kenmare Resources (KMR LN) – Ilmenite and rutile production fall heavily through first half | Power Metals Resources* (POW LN) – Progress report and strategy | Phoenix Copper* (PXC LN) – Reduced H1 losses and project review | Strategic Minerals* (SML LN) –Cobre Q2 magnetite sales | Trans-Siberian Gold (TSG LN) – V25N drilling returns high grade intersections along strike and at depth
Companies: ARCM KMR POW PHNX SML TSG
Power Metals Resources* (POW LN) – Test-pit results from Kisinka | Rio Tinto (RIO LN) – Oyu Tolgoi project update | Tertiary Minerals* (TYM LN) – Issue of shares to Precious Metal Capital Group
Companies: POW RIO TYM
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In H1, 2020 and the period directly following (Q3, 2020), EQTEC has made substantial operational progress, significantly boosting its project pipeline and strengthening its balance sheet with an over-subscribed £10m fund raising in July 2020. Revenue generation in H1, 2020, however, was constrained due to the impacts of Covid-19 and severe fires in California. We now forecast revenue of €2.4m in 2020E, compared with our previous forecast of €7.0m. Importantly, no projects have been cancelled. Delayed revenue is expected to flow into 2021E. Select new projects, having been secured in 2020, are expected to reach financial close in 2021E and 2022E, in addition to those existing projects under development in those years. As a result, we are increasing our 2021E and 2022E forecasts.
Companies: EQTEC Plc
Central Asia Metals (CAML LN) reported robust interim results in the context of the H1 2020 backdrop; solid production and the company’s fundamentally low cost base meant that CAML remained profitable despite the sharp pullback in commodity prices during the period which led to a 17% YoY decline in revenue to US$70.8m. Consequently, EBITDA was down 25% YoY to US$42.5m despite a decline in unit costs of 6% YoY at Kounrad and 9% YoY at Sasa to US$0.48/lb and US$0.43/lb respectively which cushioned the impact of the weaker the top line. With no significant one offs in the period, EPS of US$0.10/sh. was 33% lower YoY.
Companies: Central Asia Metals Plc
Talitha Shelf Margin Deltaic LKA resource report
Companies: Pantheon Resources Plc
The stock was up 12% on Friday, 25/09, sparked by the positive outcome on Vodafone’s dispute with the Indian tax authorities. This is encouraging for Cairn, but note that both cases differ. While the tax authorities simply erased Vodafone’s tax bill, they owe up to $1.4bn to Cairn, and could offer more resistance.
Companies: Cairn Energy Plc
EQTEC announced (last Friday afternoon) an extension of the exclusivity period of the Billingham MOU until 22 November 2020. The extension of the MOU exclusivity period is with the aim of finishing the preparation of a legally binding option agreement with Scot Bros. which, if agreed, will grant EQTEC and its partners the right, but not the obligation, to purchase the entire issued share capital of Billingham EFW Limited (the project SPV) from Scott Bros. subject to an agreement on consideration and other terms.
West Newton B-1 drilling update
Companies: Union Jack Oil Plc
Ready to steppe it up – initiating coverage
Companies: Enwell Energy Plc
Hargreaves’ FY20 results are very solid indeed. As previously reported, the only noticeable impact from COVID was in the slippage of Blindwells’ land sales, which were due to conclude during the lockdown period. Site activity has resumed and sales remain on track to conclude in the current year. A final dividend of 4.5p has been declared and the outlook statement is measured but confident. We reintroduce forecasts today, effectively reinstating our pre-COVID expectations. Hargreaves is well positioned to deliver a period of significant, renewed growth with the prospect of a double digit dividend yield from FY22 as HRMS profits are distributed.
Companies: Hargreaves Services Plc
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
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.
There was less tension this quarter, as Shell had already cut its dividend in Q1. The trading units rose to the occasion, bringing a positive surprise in this horrendous quarter. The company has recorded a very large impairment, and is poised to announce a strategic shift once 2020 is in the books.
Companies: Royal Dutch Shell Plc
Shanta Gold (AIM: SHG), the East Africa-focused gold producer has today announced a summary of historic exploration drilling carried out at its recently acquired West Kenyan project. We have included the significant drill intercepts that the company highlighted in the announcement.
Companies: Shanta Gold Ltd.
i3 Energy provided its interim results for the period ended 30 June 2020 (published yesterday after the market close, with a correction to the interims published today at 10:04AM). The financial statements of i3 Energy do not reflect the reverse takeover completed by the company (post-period end) pursuant to its £29M equity raise and its acquisition of assets in western Canada, “the Gain Assets”; however, i3 Energy did provide the financial results of the Gain Assets for the period. These show revenues net of royalties of £16.0M operating costs of £13.0M and cash flow from operations before changes in working capital of £3.0M. For perspective, the average price of benchmark American oil (WTI) was $36.58/bbl and the average price of benchmark American natural gas (NYMEX, Henry Hub) was $1.80/mmbtu during the period. We retain our 17.7p preliminary fair value estimate on i3 Energy, which is premised on the 2P resource evaluations of GLJ and Sproule. We believe commodity prices will recover from the sell-off of recent days and believe the timing is opportune for acquirers of i3 Energy.
Companies: i3 Energy Plc
Three day CMD to detail how BP will redeploy hydrocarbons’ capital into renewables. The latter are expected to grow by 12% CAGR by 2030, which surely is more exciting than oil. Returns do not compare though, but BP intends to make good use of its trading division to bridge part of the gap. Lowering the dividend took care of the rest. Overall, BP diversifies its risks early, which might prove right if oil stays under $50.
Companies: BP Plc
• As the industry adjusts to a ~US$40/bbl world, companies with Strong balance sheets such as GeoPark are returning to exploration and development drilling.
• As production at Llanos 34 (GPRK WI 45%) continues to recover after temporary shut-ins in 2Q20 and following the resumption of drilling activities, the asset continues to be a source of reliable, stable free cash flow to fund future exploration and appraisal activities elsewhere. With this in mind, we see the adjacent CPO-5 block becoming a key area of focus in the next 18 months and the main reason behind the acquisition of AMERISUR in January 2020.
• By YE20, GeoPark will drill two wells in the highly prospective CPO-5 block. This will include an imminent development/appraisal well in the Indico light oil field followed by an exploration well. The only existing well in the Indico field is still flowing naturally at >5 mbbl/d since first oil in December 2018. The implied very strong reservoir performance and the fact that the oil pool boundaries have not been encountered yet suggest the field offers production and reserves upside that could start to be unlocked with upcoming drilling.
• The CPO-5 exploration well in 2020 will target the Aguila prospect (same play concept in the existing Indico and Mariposa fields).
• In 2021, GeoPark could drill an additional 5-7 wells at CPO-5 comprising a combination of exploration, delineation and development wells. According to the latest CPR, 3-4 new Indico wells could add 7.5-12.5 mbbl/d gross production (2.5-4.2 mbbl/d net to GeoPark) in 1-2 years. The exploration program for 2021 will likely test the continuity of the Guadalupe play encountered on Llanos-34 into CPO-5.
Other exploration well candidates for 2021
GeoPark holds a large exploration portfolio with meaningful exploration acreage surrounding its core Llanos-34 Block. On Llanos-34, there are a handful of exploration prospects plus some appraisal drilling opportunities on other relatively minor fields, some of which could be drilled in 2021. Exploration targets on the recently acquired Llanos-87, 123 and 124 blocks could be drilled within the next 18 months. Other likely catalysts in 2021 include 1-2 exploration wells in Ecuador, in blocks located close to the best fields of the prolific Oriente basin. This could open-up a new area of focus.
Value and big exploration
The share price trades at ~55% discount to our Core NAV of ~US$17. Overall there could be 350-700 mmboe gross prospective resources across the Llanos blocks (including CPO-5) that GeoPark is imminently starting to explore. Our target price of US$20 per share reflects our ReNAV. It represents ~150% upside to the current levels.
Companies: GeoPark Ltd.