Alba Mineral Resources (ALBA LN) – Resumption of drilling at the Clogau mine
Capital Limited (CAPD LN) / Centamin (CEY LN) – Progress on Sukari contract
Empire Metals* (EEE LN) – Phase-2 drilling commenced at Eclipse Gold Project
Rambler Metals and Mining* (RMM LN) – Appointment of new CFO
Companies: ALBA CAPD CEY EEE RMM
Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange.
Companies: PMI RMM SUN BOIL ITM TRMR MLVN 88E IME ANP
Rambler Metals and Mining* (RMM LN) – LOI for sale of Nugget Pond gold plant
Companies: Rambler Metals & Mining Plc
Elkem ASA (ELK OL) NOK28.49, Mkt cap NOK16.25bn – Manufacturing advanced synthetic graphite anode materials | Phoenix Copper* (PXC LN) 41.5p, Mkt Cap £25.6m – Empire Mine operational update | QuantumScape Corp (QS N) US$73.05, Mkt cap US$1.7bn - QuantumScape announce breakthrough in Solid state battery technology with 15min fast charge | Rambler Metals and Mining* (RMM LN) 0.24p, Mkt Cap £19.5m – Completion of US$13.25m fund raising and restructuring | Vast Resources* (VAST LN) 0.14p, Mkt Cap £24m – £4.8m equity raise
Companies: ELK PXC QS RMM VAST
AEX Gold Inc (AEXG LN) – Highly prospective exploration license granted in South Greenland | Arc Minerals* (ARCM LN) – Strong Buy – Anglo American move to next stage in potential deal with Arc over
Zambian licenses | Kefi Gold and Copper (KEFI LN) – Preliminary drilling results at Hawiah point to resource expansion potential | Rambler Metals and Mining* (RMM LN) – Completion of US$13.25m fund raising and restructuring | SolGold* (SOLG LN) – Final assay results received for drill hole one at Porvenir | Taseko Mines (TKO LN) - Taseko and Tsilhqot'in Nation Extend Standstill by another year
Companies: AEX ARCM KEFI RMM SOLG TKO
Eurasia Mining* (EUA LN) – West Kytlim Definitive Feasibility Study update | GoldStone Resources (GRL LN) – Mining lease expanded at AHKM as Board prepare to commence production | IronRidge Resources* (IRR LN) – Phase-3 drilling extend area of gold mineralisation at Zaranou | Mkango Resources* (MKA LN) – Mineral sands exploration at Mchinji | Rambler Metals and Mining* (RMM LN) – Restructuring timetable | SolGold* (SOLG LN) – Further assay results as Porvenir drilling effort expands | Strategic Minerals* (SML LN) – £700,000 fund-raising
Companies: EUA GRL IRR MKA RMM SOLG SML
Bluejay Mining* (JAY LN) – BUY, Valuation 27.4p – Hammaslahti copper-zinc-gold-silver project fieldwork and drilling program starts in Finland | Botswana Diamonds (BOD LN) – Sekaka acquisition | Castillo Copper (CCZ LN) – Copper observed in first holes at the Big One project in Queensland | Endeavour Mining (EDV CN) – Endeavour acquires Teranga and seeks FTSE 100 listing | IronRidge Resources* (IRR LN) – IronRidge appoints new CFO | Panther Metals (PALM LN) – Acquiring gold project near Laverton, WA | Phoenix Copper* (PXC LN) – Structural geological study highlights Red Star potential | Rambler Metals and Mining* (RMM LN) – US$13.25m fund raising and restructuring | Sunrise Resources (SRES LN) – Project summaries | KEFI Gold and Copper (KEFI LN) – Equity raise to progress drilling at Hawiah and funding discussions at Tulu Kapi | Vast Resources (VAST LN) – First Baita Plai copper concentrate sale to be completed with week
Companies: JAY BOD CCZ EDV IRR PALM PXC RMM SRES KEFI VAST
Adriatic Metals* (ADT1 LN) – Annual results and review of exploration | AfriTin (ATM LN) –– H1 report highlights production ramp-up at the Uis mine | Ariana Resources* (AAU LN) – US$30m partial disposal of Turkish Assets | Anglo Asian Mining* (AAZ LN) – BUY – Gedabek continue unaffected by the Nagorno-Karabakh conflict | Cornish Lithium (Private) - Cornish Lithium looking to bring the EV supply chain closer to home | IronRidge Resources* (IRR LN) – FY20 results: well positioned to continue de-risking portfolio projects with A$7.3m in the bank | Kavango Resources (KAV LN) – Resuming field exploration of the Kalahari Copper Belt, Botswana | Power Metal Resources (POW LN) – Exploration gets underway on Botswana joint-venture | Rambler Metals and Mining* (RMM LN) – Interims and refinancing of debt and planned restoration of mine production at higher copper grade | Renascor Resources (RNU AU) – Offtake agreement with Chinese anode manufacturer highlights China’s dominance of supply chain | Trans-Siberian Gold (TSG LN) – 8c interim dividend declared reflecting robust FCF and strong outlook | Versarien* (VRS LN) – New Advisory Panel brings together global leaders in graphene within Versarien
Companies: ADT ATM AAU AAZ IRR KAV POW RMM RNU TSG VRS
Arkle Resources* (ARK LN) – H1 results highlight resumption of drilling at Stonepark and exploration potential of gold projects | Bluebird Merchant Ventures (BMV LN) – Gold-prepayment funding for US$5-20m from South Korean investors | Central Asia Metals (CAML LN) – Sasa TSF4 update | Kenmare Resources (KMR LN) – Wet Concentrator Plant moved to Pilivili | Keras Resources* (KRS LN) – Change in government in Togo | Rambler Metals and Mining* (RMM LN) – Raising funds to establish 1350tpd and examine further expansion | Scotgold Resources* (SGZ LN) - BUY – 141p – Exploration progress around Cononish | Serabi Gold* (SRB LN) – Preliminary licence for Coringa approved
Companies: ARK BMV CAML KMR KRS RMM SGZ SRB
Altus Strategies* (ALS LN) – High grade drilling results at Tabakorole | Anglo American (AAL LN) – Ends contract DMC Mining Services for the Woodsmith polyhalite mine shaft | Bezant Resources (BZT LN) –– Completes acquisition of Hope copper-gold project in Namibia | Dark Horse Resources (DHR AU) – Dark Horse to progress JORC resource at Tampere gold project in Finland | Petropavlovsk (POG LN) – Interim CEO and Chairman of the Board appointments | Pure Gold (PUR LN) – Development works resume | Rambler Metals and Mining* (RMM LN) – Working capital funding secured | Vast Resources* (VAST LN) – Metallurgical work points to high grade copper and zinc concentrates production potential at Baita | Versarien* (VRS LN) – Versarien receives £1.96m as first instalment from UK Innovate fund
Companies: ALS AAL BZT POG RMM VAST VRS
Greatland Gold (GGP LN) – New zone of mineralisation discovered at Havieron | IronRidge Resources (IRR LN) – Visble gold seen in Zaranou gold project in Ivory coast | Petra Diamonds (PDL LN) – FY 2020 confirms Covid19 disruption of the diamond pipeline | Petropavlovsk (POG LN) – POX Hub drives 42% growth in production in H1 | Rambler Metals* (RMM LN) CLICK FOR PDF – H1 operating results impacted by Covid19 containment measures | Serabi Gold* (SRB LN) –– Q2 production results | Syrah Resources (SYR AU) – Balama graphite mine in Mozambique remains closed through Q2 as work continues at Vidalia anode plant
Companies: GGP IRR PDL POG RMM SRB SYR
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 LEX SOLG VRS
Amur Minerals* (AMC LN) – EGM notice | Highland Gold (HGM LN) – Kayen exploration license sold for $15m and 2% royalty | Keras Resources* (KRS LN) - Global manganese ore output falls 22% in April | Mkango Resources* (MKA LN) – COVID-19 medical equipment donated to main Malawi hospital | Rambler Metals* (RMM LN) – US$1m bridging loan
Companies: AMC KRS MKA RMM
Amur Minerals* (AMC LN) – Kun Manie copper concentrate production | Beowulf Mining* (BEM LN) - Madjan Peak Shows Epithermal Gold Potential in Northern Kosovo | Mkango Resources* (MKA LN) – Q1 Results highlight progress towards feasibility study | Rambler Metals* (RMM LN) – Appointment of new CEO | Savannah Resources* (SAV LN) – Mina do Barroso EIA submission | Strategic Minerals* (SML LN) – Award of US$21.9m by arbitrator
Companies: AMC BEM MKA RMM SAV SML
Atalaya Mining (ATYM LN) – Environmental permit confirmed at Proyecto Riotinto | Condor Gold* (CNR LN) – Permit awarded for America pit | Rambler Metals* (RMM LN) – Bridge Loan from CE Mining III Rambler
Companies: ATYM CNR RMM
Research Tree provides access to ongoing research coverage, media content and regulatory news on Rambler Metals & Mining Plc.
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Central Asia Metals (CAML LN) has reported Q4 2020 production with 3,365t of copper taking full year output to 13,855 in line with our forecast of 13.9kt and at the top end of guidance. Q4 lead output was 7,442t meaning 29,741t over the full year, up 2% YoY and in line with our forecast of 30kt while zinc output of 5,848t took full year output to 23,815t again in line with our forecast of 24kt and up 2% YoY despite the disruption at Sasa which CAML has overcome rapidly as we expected.
Companies: Central Asia Metals Plc
Jubilee put out an intraday press release yesterday updating on the performance in the first half (ending Dec 2020) of the FY 2021. Once again Jubilee delivers; significantly increased revenues and profits from its chrome and PGM division in South Africa and a small, but important, contribution from Zambia. Notably this improvement isn't just from commodity price performance; rather increased production, productivity, throughput, renegotiated contracts and all set alongside the strong performance of commodity prices –rhodium, palladium and platinum. We see this as still only the start for Jubilee as we look forward to the first copper oxide concentrates from the Roan project in Zambia to the Sable Refinery – where the Roan plant is currently under construction. Once again we are struck by the speed at which Jubilee moves to advance its projects and, with its South African cash engine showing no signs of slowing down. Jubilee can choose to move its wider ambitions in Zambia forward from internally generated cash flow. On the back of the strong performance we put our forecasts under review.
Companies: Jubilee Metals Group PLC
Bluejay Mining* (JAY LN) – BUY, Valuation 29.4p – Bluejay agrees jv with Rio Tinto over the Enonkoski Project in Finland
Bushveld Minerals* (BMN LN) – BUY - Valuation 37.7p – Ferro-Vanadium prices jump 11.6% in the US
Edenville Energy* (EDL LN) – Funding agreement refinanced and £900k raised
Kodal Minerals* (KOD LN) – Further progress at West African gold assets
Lucara Diamonds (LUC CN) – Karowe mine yields 341 carat diamond
Serabi Gold* (SRB LN) –Q4 production results continue modest recovery of Q3
Companies: LUC JAY BMN EDL KOD SRB
Companies: Hurricane Energy Plc
Bahamas Petroleum Company (BPC LN)C; Target Price: 6.70p: Funding update – BPC has exercised a put option to raise £3.75 mm priced at 2p per share.
PetroTal (PTAL LN/TAL CN)C: Target Price increased from £0.45 to £0.50: US$100 mm bond to accelerate activities and grow production - PetroTal is launching a bond issue to raise US$100 mm. This would allow the firm to accelerate drilling and development activities at Bretana (~US$40 mm), clean up its balance sheet, put in place a hedging programme and allow the firm to consider regional acquisitions. Assuming the extra funding is put in place, we are increasing our capex programme for 2021 from US$40 mm to US$90 mm. We are also increasing our production forecast for 2021 from ~11 mbbl/d to ~15 mbbl/d that we maintain broadly flat in 2023 as we assume PetroTal will drill additional wells before production starts to decline from 2024. We note that the 3P case only assumes five additional wells (~US$70 mm) compared to the 2P case. With more production, we are now forecasting operating cashflow of ~US$170 mm in 2022 and ~US$155 mm in 2023. We are also increasing our Core NAV from £0.43 per share to £0.52 per share. The additional funding would also allow the company to drill exploration wells such as the 70 mmbbl Constitucion prospect (£0.40 per share Unrisked).
Pharos Energy (PHAR LN)C; Increasing our target price from £0.35 to £0.40 per share on reserves uplift – The highlight of Pharos’ operational update is the ~40% increase in 2P reserves in Egypt expected as at YE20 (YE19 28.5 mmbbl). This reflects improved waterflood performance based on recent field data, and a new drilling and workover plan for 2021 onwards. Drilling is expected to recommence in Vietnam in 3Q21, a quarter earlier than previously announced. We have increased our target price from £0.35 per share to £0.40 per share to factor in the expected increase in reserves in Egypt. We estimate the value of Pharos based on Vietnam only at £0.23-0.27 per share. This is 15-35% above the current share price. Securing a partner to fund a development programme with four rigs in Egypt would increase the value of the ~ 40 mmbbl 2P reserves in Eqypt and unlock the contingent and 108 mmbbl prospective resources. Our incremental unrisked value for the four rig programme is £0.17-0.19 per share (~85% upside to the current share price). Successfully negotiating new terms with EGPC could lead to an improvement of up to US$6/bbl in the breakeven price. We have previously estimated that securing similar terms to TransGlobe would boost our Core NAV by £0.10-0.12 per share and ReNAV by £0.13-0.15 per share. TransGlobe Energy’s share price has tripled since the new terms on its licences were announced.
Tethys Oil (TETY SS)C; Target Price: SEK75.00: Production update in Oman – Production at Block 3&4 in December was 11,481 bbl/d.
Vaalco Energy (EGY LN/US)C; Target Price: £4.00: Initiating Coverage - VAALCO is a US and UK listed ~£75 mm market cap, ~10 mbbl/d oil producer (pro-forma) with West African assets. VAALCO has an excellent track record as an operator having grown a 30 mmbbl discovery in Gabon to a field that has produced >118 mmbbl so far with an additional 37 mmbbl remaining 2P reserves plus ~80 mmbbl upside at YE19. The shares have suffered in the past from (1) a lack of materiality as VAALCO held only ~31% of its main asset, with G&A viewed as representing a disproportionate amount of cash flow and (2) lack of visibility on how the significant amount of cash on the balance sheet would be deployed. The US$44 mm acquisition of an additional ~28% WI in Etame announced in November, thereby almost doubling production, reserves and resources overnight, has addressed these issues. The story is now about continuing to grow reserves at the producing Gabonese field and to replicate this success elsewhere. With estimated net cash of >US$25 mm at the end of 1Q21, VAALCO’ s shares trade at less than half our 2P NAV of ~£2.70 per share. The current share price discounts an EV/DACF multiple of 1.2x in 2021. Low risk infill drilling of contingent resources could add ~£0.45 per share (30% of share price) with an overall unrisked value for the upside at the producing asset of £4.80 per share (~4x the current share price). Finalizing the farm out of its asset in Equatorial Guinea could start unlocking a further £4.20 of unrisked value. Our target price of £4.00 per share (~ our ReNAV) represents ~230% upside.
Wentworth Resources (WEN LN)C; Target Price: £0.40: >100 mmcf/d reached in December - FY20 gross production was 65.36 mmcf/d (in the middle of the 60-70 mmcf/d guidance) with ~83 mmcf/d on average during the month of December. Repairs to the MB-2 flowline were completed on 9 December, increasing the capacity of the field to over 100 mmcf/d. Production reached 103 mmcf/d for five days during that month. Gross production guidance for FY21 is 65-75 mmcf/d, below the 80 mmcf/d we were carrying as production growth is pushed back by a year. Cash on hand of ~US$18 mm is in line with our expectations. With 70 mmcf/d gross production in 2021 and almost no capex, we forecast FY21 Free Cash Flow of ~US$10 mm. With FY20 dividends of only US$3.2 mm and ~US$18 mm in cash, we believe there is scope to increase the dividend. At the current share price, the FY20 dividend represents a yield of ~6%. Even after the recent share price appreciation, the shares continue to trade at EV/DACF multiples of 2.9x in 2021 and 2.2x in 2022. This compares with 3.8x for 2020, suggesting there is room for multiple expansion given the stable nature of the business.
IN OTHER NEWS
88 Energy (88E LN/AU): Acquisition in Alaska – 88 Energy is acquiring the Umiat Oil Field, located on the North Slope of Alaska. The proceeds consist of a 4% overriding royalty interest and the assumption of the abandonment liability of two historic wells (at an estimated cost of ~US$1 mm). Umiat is an historic oil discovery, made in 1945 in shallow Brookian (Nanushuk) sandstones, located immediately adjacent to southern boundary of Project Peregrine. The Umiat-23H well was flow tested at a sustained rate of 200 bbl/d with no water in 2014. Gross 2P reserves were estimated at 123.7 mmbbl on 1 December 2015.
Equinor (EQNR NO): Farming down Argentinian offshore exploration to Shell - Equinor and YPF farm-down 30% interests in the CAN 100 block, located in the North Argentinian Basin to Shell.
Pantheon Resources (PANR LN): Dispute in East Texas and acquisition of new acreage - Kinder Morgan has filed a petition against Pantheon, seeking payment of ~US$3.35mm with respect to the early termination of a Gas Treating Agreement between Kinder Morgan and Vision Operating Company. In a separate statement, the company indicated it has acquired 100% interest in ~66,000 acres in the State of Alaska's North Slope Areawide Lease Sale. The new leases are positioned in two areas contiguous to the company’s current acreage.
Parex Resources (PXT CN): Operation update in Colombia – 4Q20 production was 46,550 boe/d compared to Parex’ guidance of 45,500-47,500 boe/d. 1Q21 production is expected to average 46,500-47,500 boe/d. The Brent/Vasconia differential is currently ~US$2/bbl. Parex estimates a cash position of US$325 mm at YE20.
Total (FP FP): Discovery in Suriname - The Keskesi East-1 well, in Block 58, encountered a total of 63 meters net pay of hydrocarbons, comprised of 58 meters net black oil, volatile oil, and gas pay in good quality Campano-Maastrichtian reservoirs, along with 5 meters of net volatile oil pay in Santonian reservoirs.
Independent Oil & Gas (IOG LN): Operating update in the UK – Phase 1 remains on schedule for First Gas in 3Q21. Drilling is expected to start in early 2Q21.
Hurricane Energy (HUR LN): Operating update in the UK North Sea - Production for the final four months of 2020 averaged 12,500 bbl/d. Current water cut is 25%. YE20 net free cash was US$106 mm, compared to US$87 mm at 30 November 2020.
Lundin Energy (LUNE SS): Resources increase in Norway – YE20 2P reserves are 670.9 mmboe (+ 39.3 mmboe versus YE19). The YE20 2C resources are 275.5 mmboe (+90.2 mmboe et YE19).
OMV (OMV AG): Trading update – 4Q20 production was 472 mboe/d including 290 mboe/d of natural gas.
FORMER SOVIET UNION
Enwell Energy (ENW LN): Operating update in the Ukraine – 4Q20 production was 4,444 boe/d. At YE20, the company held US$61 mm in cash.
Petroneft (PTR LN): Potential acquisition in Russia – Petroneft is looking to acquire an additional 40% interest in Licence 67 from Belgrave Naftogas for US$2.9 mm including US$1.2 mm in shares and the balance in cash.
MIDDLE EAST AND NORTH AFRICA
Gulf Keystone Petroleum (GKP LN): Operating update in Kurdistan – FY20 gross production at Shaikan was 36,625 bbl/d with current production of 44,000 bbl/d. As at 12 January 2021, the Company had a cash balance of US$147 mm. FY21 gross production guidance has been set at 40,000 to 44,000 bbl/d with US$15 to $20 mm net capex and US$2.5 to US$2.9/bbl opex.
ShaMaran Petroleum (SNM CN): Terms update for bonds – ShaMaran is looking to use free cash in excess of US$15 mm to buy back its Bonds in the market to satisfy the cash sweep redemption requirements.
United Oil & Gas (UOG LN): Production update in Egypt – 2H20 WI production was 2,340 boe/d in line with guidance for the period of 2,300 boe/d.
BW Energy (NEW NO): Farm-in transaction in Namibia – BW Energy is acquiring 39% WI in the Kudu offshore licence from the National Petroleum Corporation of Namibia (NAMCOR). BW will pay US$4 mm in cash and carry NAMCOR’s share of development costs until first gas. NAMCOR will also have the opportunity to acquire an additional 5% working interest post first gas.
Orca Energy (ORC.A/B CN): Update in Tanzania – FY20 sales volumes were 57.7 mmcf/d. Cash and short-term investments totalled US$103.8 mm at YE20. As at YE20 there were no current receivables due from TANESCO. The TANESCO long-term trade receivable was US$27.6 mm.
EVENTS TO WATCH NEXT WEEK
18/01/2021: Repsol (REP SM) – Trading update
19/01/2021: Genel Energy (GENL LN) – 4Q20 trading update
20/01/2021: Cairn Energy (CNE LN): Trading update
Companies: 88E BPC EQNR HUR LUNE PXT PHAR SNM TETY TETY FP EGY WEN
European Metals has recently enjoyed a long overdue share price re-rating. The shares have
increased ten-fold from Covid lows in April 2020 on the back of a marked improvement in
lithium sector sentiment. EMH’s market cap is now £127m. Covid has in many ways accelerated
the push towards EVs and the low carbon agenda. Europe is now the battleground for Electric
Vehicles (“EVs”) where material sources, security of supply and the entire value chain is coming
under ever increasing scrutiny. The DFS at EMH’s Cinovec project is due for completion by the
end of 2021.The time has come for EMH and over the next 12 months we should see with more clarity how
Cinovec fits into Europe’s growing EV and battery industry. We see no other project better
placed to dovetail into the European battery market and supply battery-grade lithium at scale.
Companies: European Metals Holdings Limited
Arc Minerals* (ARCM LN) – Arc Minerals extends exclusivity agreement with Anglo for a further 180 days
Cornish Metals* (CUSN CN) – Intention to float on AIM market
Greatland Gold (GGP LN) – Newcrest approves A4146m for preparatory mining work at Havieron
IronRidge Resources* (IRR LN) – Drilling defines multiple targets at Ewoyaa Lithium Project
Kenmare Resources (KMR LN) – 2020 production and 2021 guidance
Sunrise Resources (SRES LN) – Progress report on projects
Zamare Minerals* (Private) - Zamare announce agreement with First Quantum Minerals over the Ntambu exploration license in Zambia
Companies: CUSN ARCM GGP KMR SRES IRR
Further media reports that Dr Martens, the British Boot brand is planning an IPO on the LSE. It is currently owned by PE group, Permira who is expected to sell down its stake at the IPO. March 2020 YE the group had revenues of £672m and EBITDA of £184m. Deal size TBC. Upon Admission to AIM, Nightcap will acquire The London Cocktail Club Limited (the "London Cocktail Club"), which is an award winning independent operator of ten individually themed cocktail bars in nine London locations and one location in Bristol. Offer TBC Due mid Jan. HSS Hire Group, HSS.L transfer from Main to Aim. Mkt Cap c. £70m. Recently raised £52.6m. Leading supplier of tool and equipment for hire in the United Kingdom and Ireland and has provided equipment hire services in the United Kingdom for more than 60 years, primarily focusing on the B2B market. Due 14 Jan. VH Global Sustainable Energy Opportunities plc, a closed-ended investment Company focused on making sustainable energy infrastructure investments, today announces intends to launch an initial public offering of shares on the Official List (Premium) of the Main Market of the London Stock Exchange. Due by Early Feb.
Companies: IUG CBP KAT APP RST DIS NICL BOKU CNIC HE1
Results from the 2020 soil-till sampling campaign have been reported today and are positive with widespread anomalous gold values, including the highest soil-till assay results to date, along strike to the east and west of BAM Gold for a total length of 8 kilometres. Numerous new drill targets have been identified which have the potential of being advanced into additional resources to continue the rapid growth of the BAM Gold Project. Drilling has commenced in the area to the west and has intersected similar geological lithology and mineralisation to BAM Gold.
The drilling programme for 2020-21 at the BAM Gold Deposit is progressing as planned with a total of 6,518 metres of HQ diamond core, comprising 30 drill holes, completed to date. All drill holes have successfully intersected prospective mineralised zones associated with the BAM Gold Deposit. The drill core has been logged, processed, and sent to ALS Minerals of Thunder Bay for analysis to date. Assay results are pending, with increased exploration activity in Canada, the labs are full, with assays now taking 7-8 weeks. The current funded drilling programme is expected to complete in April 2021.
Companies: Landore Resources Limited
• PetroTal is launching a bond issue to raise US$100 mm. This would allow the firm to accelerate drilling and development activities at Bretana (~US$40 mm), put in place a hedging programme and allow the firm to consider regional acquisitions.
• Some of the proceeds of the bond issue will be used to repay the US$16.6 mm derivative liabilities to Petroperu that was formalized in November. However, with the recent upwards shift of the forward curve, the potential derivative liabilities is now an asset and Petroperu is expected to owe PetroTal ~US$8 mm. Under the current forward curve, PetroTal should therefore now receive a total of ~US$25 mm (=US$16.6 mm + US$8 mm) from Petroperu from the settled oil profits during 1Q21.
• Assuming the extra funding is put in place, we are increasing our capex programme for 2021 from US$40 mm to US$90 mm. We are also increasing our production forecast for 2021 from ~11 mbbl/d to ~15 mbbl/d that we maintain broadly flat in 2023 as we assume PetroTal will drill additional wells before starting to decline from 2024. We note that the 3P case only assumes five additional wells (~US$70 mm) compared to the 2P case.
• Current production has now increased from 9.5 mbbl/d last week to 10 mbbl/d.
• PetroTal has now also signed an agreement for a second pilot shipment through Brazil in February 2021, of up to 220,000 barrels of oil.
Positive impact on cash flow and NAV
With more production, we are now forecasting operating cashflow of ~US$170 mm in 2022 and ~US$155 mm in 2023. We are also increasing our Core NAV from £0.43 per share to £0.52 per share. The additional funding would also allow the company to drill exploration wells such as the 70 mmbbl Constitucion prospect (£0.40 per share Unrisked).
We are increasing our target price from £0.45 per share to £0.50 per share in line with our new Core NAV. Our target price represents over 3x the current share price.
Companies: PetroTal Corp.
Today's news & views, plus announcements from RIO, TSCO, WIZZ, SVS, BBOX, EMAN, POLR, BRK, BOO, THG
Companies: Rio Tinto plc
Oil slid by the most in three weeks as a stronger dollar and weak US economic data stoked concerns over an economic rebound.
Futures in New York tumbled 2.3% on Friday after a rally in oil earlier in the week pushed the benchmark into overbought territory. The US dollar strengthened, reducing the appeal of commodities priced in the currency. US consumer sentiment cooled more than forecast in January and other economic data such as sluggish retail sales and producer prices also portray the obstacles still facing the country as it emerges from the pandemic.
Meanwhile, President-elect Joe Biden said he will ask Congress for $1.9 trillion to fund immediate relief for the US economy that has been pummelled by the pandemic. But the large price tag and inclusion of initiatives opposed by many Republicans set up the aid package for a drawn out legislative battle.
Despite the pullback in oil futures, vaccine breakthroughs and Saudi Arabia's pledge earlier this month to deepen output cuts are expected to support prices. JPMorgan Chase & Co said a “nasty deficit” could emerge in the oil market later this year.
Meanwhile, technical indicators had been flashing warnings signs all week. The 14-day Relative Strength Index for both US and global benchmark crude futures traded above 70 this week in a sign they were overbought, though both slipped under that level Friday.
West Texas Intermediate for February delivery fell $1.21 to settle at $52.36 a barrel. Futures rose less than 1% this week.
Brent for March settlement lost $1.32 to end the session at $55.10 a barrel. The contract fell 1.6% during the week.
The market's structure has also softened. Brent's prompt timespread dipped back into contango on Friday, a bearish structure where nearby prices are cheaper than later-dated ones.
This week has seen the annual commodity index rebalancing take place -- a move that was expected to see as much as $9 billion flow into the oil market. Since it began last Friday, there has been a surge in so called trading-at-settlement volumes, an instrument often used by participants with index exposure. For Brent, average volumes over the last five days have reached a record.
Other oil-market news:
Companies: FO PRP 88E DGOC EME TRIN UOG
Salt Lake Potash Lake Way Project is nearing completion with the Process Plant and NPI well advanced. The overall project, including all on-lake infrastructure, was 81% complete on 31 December 2020.
The Project remains on track for first SOP production in March 2021 and first SOP sales in April, with the project capital budget unchanged at A$264m. Funds from the first US$105m tranche of the Project Development Facility have been received enabling repayment of the US$45m Bridge Facility and completion of project construction.
The Process Plant was 88% complete on 31 December 2020 (on an earned value basis). Approximately 27kt of potassium rich kainite and schoenite salts have been harvested for commissioning plant feed from the Train 1 cells. Harvesting activities will re-commence in March ahead of plant commissioning. Process Plant commissioning is expected to commence in February with introduction of first feed salts to the plant in March.
Companies: Salt Lake Potash Limited
Pantheon announced that it is acquiring the 10.8% of the Talitha Unit it does not already own, bringing its interest to 100% in the unit. The vendor, Otto Energy Alaska, will be provided with 14,272,592 shares in Pantheon Resources as consideration. The company continues to drill ahead with the Talitha#A well. The transaction is value accretive for Pantheon and we increase our fair value estimate to 89p from 83p. As a reminder, our fair value estimate includes 25% of our successcase valuations in respect of two of the four targets that the Talitha#A well is intended to evaluate, namely, the Talitha Brookian Shelf Margin Deltaic and the Talitha Kuparuk
Companies: Pantheon Resources plc
• The highlight of Pharos’ operational update is the ~40% increase in 2P reserves in Egypt expected as at YE20 (YE19: 28.5 mmbbl). This reflects improved waterflood performance based on recent field data, and a new drilling and workover plan for 2021 onwards.
• Drilling is expected to recommence in Vietnam in 3Q21, a quarter earlier than previously announced.
• Pharos reported FY20 production of 11,373 boe/d in line with our expectations and the company’s guidance. FY20 production includes 5,270 bbl/d for Egypt and the balance in Vietnam.
• FY20 revenue is also in line with our expectations and YE20 net debt was US$33 mm (including US$24 mm in cash).
• We have increased our target price from £0.35 per share to £0.40 per share to factor in the expected increase in reserves in Egypt. Our three and four rig cases previously included the contribution of some contingent resources. These two cases are now entirely supported by the new 2P reserves, making these two scenarios more robust.
Trading below the value of Vietnam alone. Transformational near term newsflow in Egypt
• We estimate the value of Pharos based on Vietnam only at £0.23-0.27 per share. This is 15-35% above the current share price.
• A formal farm-out process for the Egyptian assets has started and securing a partner to fund a development programme with four rigs in Egypt would increase the value of the Egyptian ~ 40 mmbbl 2P reserves and unlock the contingent and 108 mmbbl prospective resources. Our incremental unrisked value for the four rig programme is £0.17-0.19 per share (~85% upside to the current share price). Even assuming that the farm-in transaction would leave Pharos with only 75% of the value of its Egyptian assets would unlock £0.13-0.15 of additional value net to Pharos (~65% upside to the current share price).
• Pharos continues to negotiate with EGPC concerning potential improvements in the Concession Agreement terms. If successful, this could lead to an improvement of up to US$6/bbl in the breakeven price. We have previously estimated that securing similar terms to TransGlobe would boost our Core NAV by £0.10-0.12 per share and ReNAV by £0.13 0.15 per share. TransGlobe Energy’s share price has tripled since the new terms on its licences were announced.
Updating our valuation
We have incorporated in our valuation the YE20 net debt and have increased the likelihood of the three and four rig cases by 20% to 50% to reflect the fact that they are entirely supported by the 2P cases. We have increased our ReNAV from £0.34 to £0.39 per share, which excludes any upside associated with exploration. Our new target price has been set in line with that figure.
Companies: Pharos Energy PLC