Anglo Asian Mining* (AAZ LN) – Earnings update: riding surging gold prices | Condor Gold* (CNR LN) – Raises £6.6m in oversubscribed placing | Kodal Minerals* (KOD LN) –– Kodal awaits approval to start mining | Mkango Resources* (MKA LN) –– Rare earth magnet recycling
Companies: AAZ CNR KOD MKA
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
Caledonia Mining* (CMCL LN) – Quarterly results show little impact of Covid19 and improving operating environment in Zimbabwe | Condor Gold* (CNR LN) – Quarterly results and progress report | Horizonte Minerals (HZM LN) – Quarterly results and project update.| Vast Resources* (VAST LN) 0.18p, Mkt Cap £19m – Preliminary test work demonstrates good copper recoveries at Baita Plai
Companies: CMCL CNR HZM VAST
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
Altus Strategies* (ALS LN) – Positioned for growth in FY20 | BHP (BHP LN) - Pledges another A$3m to fight coronavirus | Kavango Resources (KAV LN ) - Review highlights Kalahari Suture Zone similarities with other major nickel regions | Mkango Resources* (MKA LN) – Results highlight progress towards feasibility study | Caledonia Mining* (CMCL LN) – Quarterly dividend | Condor Gold* (CNR LN) – Permit awarded for Mestiza pit | Scotgold Resources* (SGZ LN) BUY Target 119p – Loan facility terms changes | SolGold* (SOLG LN) – Phase 2 metallurgical testing shows enhanced gold recoveries and improved concentrate quality | Tertiary Minerals* TYM –– Issue of shares to Precious Metal Capital Group
Companies: ALS BHP KAV MKA CMCL CNR SGZ SOLG TYM
Anglo American (AAL LN) – Withdrawal of staff at Quellaveco | Atalaya Mining (ATYM LN) –Proyecto Riotinto maintaining production and guidance | Condor Gold* (CNR LN) – Exercise of warrants | Highland Gold (HGM LN) – New exploration license secured | Pensana Metals (PM8 AU) – Pensana reports a new high-grade rare earth zone at Longonjo | Vale (VALE US) - Vale says home office measures adopted globally amid coronavirus pandemic
Companies: AAL ATYM CNR HGM
Amur Minerals* (AMC LN) – £1.5m convertible loan note | Aura Energy* (AURA LN) – Issue of shares | Bushveld Minerals* (BMN LN) – Agreement with redT energy plc to supply electrolyte for Vanadium Redox Flow
Batteries | Condor Gold* (CNR LN) – Looking ahead to production at La India | MC Mining (MCM LN) – Interim results highlight a drop in earnings reflecting weak coal prices
Companies: AMC AURA bmn CNR MCM
Anglo American (AAL LN) – De Beers diamond sales hit by fallout of corona-virus | Aura Energy* (AURA LN) – Clarification of moves to restructure the board | Condor Gold* (CNR LN) – High grade pit scenario for La India | Edenville Energy (EDL LN) – Rukwa wash plant operations restart | Vast Resources* (VAST LN) – Chiadzwa Community Diamond Project update
Companies: AAL AURA CNR EDL VAST
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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
Companies: Hurricane Energy
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
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
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.
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.
Oil posted its biggest monthly advance on record, just a few weeks after prices made a dramatic plunge below zero. Crude surged about 88% in May, with US futures on Friday rising above $35 a barrel for the first time since March, driven by massive supply curbs by producers across the world. Still, prices are well below levels at the start of the year, and demand that was crushed by the coronavirus crisis may need to show a sustained improvement for the rally to extend further.
For now, the outlook for consumption looks bleak, though it is on the mend. While virus-related lockdowns are easing, demand is not yet roaring back in the US Fuel sales that were clobbered in European nations such as Spain and Italy will take time to recover. China is a bright spot, but the rest of Asia is still struggling.
The number of rigs drilling for oil in the US fell for the eleventh week, stemming the massive glut of crude that flooded the market. Yet there is a risk that oil's advance could tempt producers to turn on their taps again.
US crude futures fluctuated Friday, as Federal Reserve Chairman Jerome Powell defended aggressive action to shield the economy as the coronavirus pandemic took hold. Prices surged at the close, with West Texas Intermediate oil settling 5.3% higher at $35.49 a barrel, after falling as much as 4% earlier in the day. Futures posted the biggest monthly jump in data going back to 1983.
Brent crude for July, which expires Friday, rose 4 cents to $35.33, closing below WTI for the first time since 2016. The global benchmark has rallied almost 40% this month. The more active August contract rose 5% to settle at $37.84.
Meanwhile, US President Donald Trump is poised to sign a measure that would punish Chinese officials for imprisoning more than one million Muslims in internment camps, as he looks to rebuke Beijing over its crackdown in Hong Kong and its response to the coronavirus. He has also discussed putting targeted sanctions and trade measures on China's financial sector.
More on the oil market:
As the fallout from crude's historic plunge continues, the Securities and Exchange Commission and the Commodity Futures Trading Commission have both opened probes into the $4.64 billion United States Oil Fund ETF.
As China's demand recovery outpaces the rest of Asia, falling fuel exports from the refining giant are providing a much-needed buffer for other processors in the region still grappling with lowered consumption and poor margins.
An early look at Saudi Arabia's crude exports for May shows that historic production cuts have done little to squelch the kingdom's flood of oil to China, which is just getting back on its feet from the coronavirus.
Companies: FOG PVR 88E DGOC EME TRIN UOG
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
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
Companies: Genel Energy
Shearwater is on track to meet our FY19E estimates. The acquisition of Brookcourt completed post the balance sheet date and so does not feature in the interim results. The integration is going well and underlying cash generation is positive. The recent sell-off in the shares leaves the stock trading at a 15% discount to the recent Placing price. Buy.