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Views from the Trading Floor - Featuring Sefton Resources, Bahamas Petroleum, Ithaca Energy, EMED Mining and Vatukoula Gold Mines 19th JuneJune 19 2012, 3:24pm
Saints & Sinners: Oil & Gas
Sefton Resources (LON:SER) who we recently raised £2 million via a placing of 114.29 million new common shares at 1.75 pence which will be used to accelerate its plans to expand leasing and recompletion programs in Kansas and continue on-going work in California. The new funds will also finance bolt-on acquisitions in Kansas to add oil and gas reserves and production close to Sefton's pipelines in Kansas. As part of the placing Henderson Global Investors decided to take a 4.5% stake in the company and a letter of intent was agreed for a £10 million three year equity financing facility, or EFF, with Henderson-backed Darwin Strategic Ltd. which, once implemented, would provide future funding flexibility. We (Fox-Davies) have arranged a 2 day NON-DEAL ROADSHOW in London for Jim Ellerton, Chairman of Sefton Resources to introduce or update investors on the story. If you are interested in meeting management, please contact email@example.com
Bahamas Petroleum (LON:BPC) surged 17% to 9.5p during early trading on decent volume as retail investors continued to speculate on bulletin boards as to the reason behind the recent move. We are now back to the levels seen shortly after the Bahamas elections, and it will be interesting to see if the share price can now kick on to the next resistance level at 10p.
Roxi Petroleum (LON:RXP) jumped 17.5% to 4.25p on volume of just under a million shares during early trading. The company did say back on the 29th of May that the NK-13 well was spudded on May 28 and is planned to drill to a total depth of 1400 meters to appraise Jurassic formation in the South East channel of the Galaz Contract Area. Drilling operations are being coordinated by operation partners LGI and are expected to take 30 days.
Ithaca Energy (LON:IAE) pushed 5% to 110p on decent volume during afternoon trading as the market started to wake up to the fact that Ithaca are now potentially looking incredibly cheap based on the template formed from the Nautical Petroleum (LON:NPE) bid from Cairn Energy (LON:CNE).
Haike Chemical (LON:HAIK) eased 15% to 24.5p on almost 10 times the average daily volume after the company said that turnover for the first five months of the year fell by 13% compared to 2011 after sales volumes of key products including diesel, gasoline, dimethyl carbonate and caustic soda fell by between 50% and 70%. Accumulated loss increased for the first five months of this year. Plans to reduce costs by technical innovation and improvement; cut interest cost by introducing alternative financing sources with lower interest rates; evaluate and implement hedging for the price fluctuation of refined products; and improve sales and marketing.
Saints & Sinners: Mining
EMED Mining (LON:EMED) surged 20.3% to 9.625p at the mid-price during afternoon trading on decent volume. Possibly one of the reason behind the move could be bulletin board chatter that the Spanish government has publically gazetted approval for the public viewing of the AAU (local equivalent for the EIA, Environmental Impact Assessment). Whilst we haven't received confirmation of this, if that is the case it would tend to suggest the government is comfortable with details in the EIA and now facilitating the mandatory public review. We will be watching the newswires closely over the next few sessions.
Polo Resources (LON:POL) surged 9% to 2.61p on huge volume during early trading after the company said that its independent consultant has raised the gold estimate at one of its leading projects, the Komahun Gold Project in Sierra Leone, by almost five times to 521,000 troy ounces, following analysis of drilling results. Based on the results of 68 holes totalling 11,528 meters, SGS Canada Inc., Polo's independent consultant, raised the indicated resource to 521,000 troy ounces of gold, or 3.528 million tons at a grade of 4.59 grams a ton. Polo said a further 20,000 meters of drilling is now in progress. Co-Chairman Neil Herbert said "Komahun is one of Polo's leading projects, demonstrating gold mineralization with excellent potential for early mine development. A pre-feasibility study is scheduled for completion in the first quarter of 2013 and the pace of drilling is to be increased with the addition of a third rig shortly. The study will be based on an additional 20,000 meters of core drilling designed to infill the inferred resource and extend the indicated resource."
Horizonte Minerals (LON:HZM) jumped 12% to 9.25p at the mid-price during late morning trading as the market continued to back the company after the recent £5.2 million fund raise at 7.25p. Possibly one of the reasons the market continue to get behind the stock is following the Placing, Horizonte will have net cash of approximately £9 million, sufficient to advance the 100% Araguaia Nickel project through to the end of the Pre-Feasibility Stage over the next 12 to 14 months.
Vatukoula Gold Mines (LON:VGM) slipped 16%to 30.375p on huge volume during early trading after the company announced its unaudited preliminary results from its Vatukoula Gold Mine in Fiji for the third quarter ended 31 May 2012. The company mined 114703 tonnes and processed 114091 tonnes of ore at an average grade of 3.55 g/t Au to produce 11390 ounces for the quarter. This is down considerably from the 14315 ounces produce in the previous quarter and 15 684 in the quarter before that. Cash costs for the quarter were US$2034, up from US$1426 in the previous quarter. However the company expects to achieve the previously guided cash costs of approximately US$1,400 per ounce for the remainder of the fiscal year. EBITDA for the year to date is £293000. The company held cash and cash equivalents of £6.58 M at the end of the reporting period.
International Ferro Metals (LON:IFL) slipped 5.3% to 13.25p during afternoon trading on decent volume after the company said that the Bank of China loan facility of 500 million South African rand, which matures on June 25 has been rolled forward by a further one year period at an interest rate of JIBAR +3.50%, subject to completion of final documentation.
Athol Gold and Value Limited (LON:AHG) slipped 17.5% to 0.165p at the mid-price during early trading after the company said that it has decided not to proceed with the acquisition of Oilbarrel.com Limited ("Oilbarrel") and has issued notification to Rivington Street Holdings plc. ("RSH") terminating the acquisition process with immediate effect. Under the terms of the heads of agreement, RSH is due to repay the GBP575,000 deposit plus accrued interest as soon as possible but in any event not later than 18 September 2012. Athol will retain a charge over the shares and the assets of Oilbarrel until such time as the deposit is repaid in full.
Coal of Africa (LON:CZA) have been on a decent run over the last few days, pushing from 34p to the current level of 40.75p at the mid-price. The company did announce yesterday that subsequent to the initial review of the draft definitive feasibility study for the Makhado project by Exxaro, they continue negotiations and the assessment process to finalize the valuation of the Makhado project. Deadline for a formal decision regarding the exercise of Exxaro's right to a 30% equity participation in the Makhado project shall now be Sept. 30. Detailed testing results confirmed the ability to produce a hard coking coal product and the recently announced consolidation of the new order prospecting rights over the adjacent tenements acquired in the Soutpansberg coalfield. Next phase of the evaluation process includes further detailed analysis of several key aspects of the Makhado project. Work has started and both parties remain committed to completing the process in the shortest possible time period, to enable Exxaro to make a final decision under the option by Sept. 30.
From the trading floor
Another bullish day for the FTSE 100 index, trading 55 points higher at the time of typing to 5547 (+1.03%) as the bullish trend continues after the Greek elections. Volumes continue to disappoint with a painfully thin 330 million shares changing hands in the main index by the 2pm hour. At the same point in time, the FTSE AIM All-Share Index was 0.59% higher on volume of 430 million shares.
Gold - ↑Trading at $1628, up $2 (+0.08%)
Silver - ↑Trading at $28.73, up 3c (+0.06%)
Copper - ↑Trading at $7516, up $23 (+0.31%)
Zinc - ↑Trading at $1876, up $1 (+0.01%)
WTI Crude - ↑Trading at $83.30, up 13c (+1.22%)
Brent Crude - ↑Trading at $95.83,up 20c (+0.21%)