Oil prices slumped today with the West Texas Intermediate (WTI) benchmark in the US falling briefly falling below US$92 per barrel on concerns about the political uncertainty in Europe and expectations of an increase in America’s crude inventories.

While projections were for a gain of 1.5 million barrels in oil inventories in the US, the report from the Department of Energy revealed that crude stocks added 2.1 million barrels last week.

Meanwhile, the Greek political turmoil prompted investors to dump riskier assets including oil futures.

A last ditch attempt to form a government failed yesterday and the debt-laden country will now hold another election on June 17.

The fresh election could result in anti-austerity parties including the Coalition of the Radical Left gaining more seats in the parliament and securing a majority, which would put Greece’ membership in the euro zone and the future of Europe’s single currency into jeopardy.

Oil prices received a little support from today’s positive US data, which showed that housing starts rose more than expected last month, climbing 2.6 percent to an annualised rate of 717,000 units.

In addition, the estimate for March was revised to 699,000 from 654,000 previously.

US light, sweet crude for June delivery, currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), dropped 86 cents to US$93.12/barrel in morning trade in New York.

June Brent crude fell 50 cents to US$111.74/barrel on the ICE Exchange this afternoon.

Today’s top risers in the sector were:

Ophir Energy (LON:OPHR), up 12.5 percent at 580 pence at midday

Bankers Petroleum (LON:BNK), up 11.5 percent at 148 pence

Ruspetro (LON:RPO), up 5.5 percent at 170 pence

BowLeven (LON:BLVN), up 3.5 percent at 70.75 pence

Heritage Oil (LON:HOIL), up 1.5 percent at 124.9 pence

The top fallers were:

Jubilant Energy (LON:JUB), down 13 percent at 24.75 pence at midday

Melrose Resources (LON:MRS), down 10.5 percent at 113.09 pence

Silvermere Energy (LON:SLME), down 9 percent at 13.15 pence

President Petroleum (LON:PPC), down 9 percent at 31.3 pence

Oilex (LON:OEX), down 8.5 percent at 8.02 pence

They are the numbers five and 50. In short, there are five mines within a 50 kilometre radius of Castle Peak’s Akorade project with a total of 50 million ounces of gold reserves and resources.

This tells us the company is in an impressive neighbourhood. 

Nearology helps, but it is nothing without the right geology, funding and exploration expertise. 

Castle Peak has a tick in each of these boxes, which makes a mockery of the company’s current valuation of just over C$10 million.

Finance first. In total, C$8.5 million will be provided by two cornerstone investors – Grizal Enterprises and Beijing Donia Resources and its affiliates.

Grizal, which has an investment in another exploration company exploring an area just north of Castle Peak, has committed C$3 million in return for a 15 per cent stake.

Beijing Donia and affiliates, meanwhile, will take a 30 per cent of Castle Peak in return for C$5.5 million of investment. 

This will fund up to 10,000 metres of drilling – half of which will be follow-up, with the remainder used to assess new targets.

“We are well financed throughout this year to execute on our exploration and discovery strategy,” said chief executive Darren Lindsay.

Akorade is a patchwork of nine concessions with Castle Peak owning between 90 and 100 per cent of each. 

The outlier is POW, where the stake is 82.5 per cent, though Lindsay is hopeful Castle Peak will eventually increase its stake. 

Two fully-owned concessions, meanwhile, carry a 2.5 per cent net smelter royalty; and one fully owned concession is held with no subjects.

The company’s land position represents many years of hard negotiation with concession holders and was assembled for US$8.2 million. This includes the cost of taking over the private company that originally assembled the land package.

The concessions link together in an almost horseshoe shape when you look at them on a map and cover a “north-east trending structural zone”, and a “number of northerly trending structures”.

“The north-east trending structural zone has potential for hosting deposits that can contain in the range of 3-5 million ounces,” said Lindsay.

“On the northerly trending structural zones you tend to see a number of smaller deposits where you can cumulatively build a resource base into the order of 2,3,4 million ounces.

“So we have both of those structural trends and many different styles of mineralization within those trends.”

Castle Peak has carried out almost 7,000 metres of drilling itself, evaluating four drill targets. Two have the potential to host what’s described as “near-term resources”.

The Apankrah target on the Nkwanta concession and Dansuom on POW returned the best results.

They included 20 metres at 3.2 grams per tonne (including 2.8 metres at 17.4 grams) from Apankrah and 10.8 metres at 2.9 grams from Dansuom.

The data from the Nana target, located 500 metres north of Apankrah, suggests Castle Peak hit a low grade halo, meaning the drill bit may have been only metres away from high grade material.  

The AA Veins target, meanwhile, returned grades of around one gram of gold per tonne over 10-13m in transitional rock and saprolite. This target is located on a generally northerly trending structural corridor highlighted by a 9,000 metre gold in soil anomaly.

Castle Peak plans 5,000 metres of follow-up drilling (starting later this month) on Apankrah, Nana and Dansuom. At least 2,000 metres of this will be devoted to Apankrah.

A further 5,000 metres of drilling will evaluate “four or five” new targets. At the moment there are 25 areas of potential interest covering all nine concessions.

“By the end of this year the goal is to be able to identify which areas we are going to be aggressive on in the dry season, late 2012 through early 2013; when we would like to start the initial definition drilling,” said Lindsay.

Gold Fields, Endeavor Mining  and Golden Star Resources have begun extensive exploration work on land bordering Akorade, which suggests they are aware of the huge potential of the area.

“It is encouraging to see there is a large shift in exploration expenditure down into the south-western Ashanti, which hasn’t really seen much work over the years,” said Lindsay.

“Land packages here are hard to assemble. The vendors can be hard to work with. This is why a Gold Fields and a Golden Star haven’t historically been in this area.”

Castle Peak has pulled together an experienced team led by Lindsay, who has worked for both Newmont and BHP, and chairman Brian Lock, a 30 year veteran of the sector. In fact the board and management team are all seasoned campaigners. 

The team’s goal for this year is to gain a better understanding of the overall potential of the Akorade and move it up the value chain, before looking for further finance and perhaps even partnering.

“Once we have evaluated and prioritised we will focus on one or two key prospects, our anchor prospects, where we believe we will build our best resources,” said Lindsay. 

“The catalysts this year will be drill results.”

Barclays (LON:BARC) and B&Q owner Kingfisher (LON:KGF) were the top broker calls this morning.

Both have been dragged down in the recent market turmoil. But according to City heavyweights UBS and JP Morgan Cazenove both have fallen far enough, offering two great opportunities for value investors.

Barclays’ share price has suffered in recent weeks and UBS analysts reckon concerns over its exposure to Spain, where it has a network of more than 450 branches and employs nearly 4,000 people, are to blame for this.

The Swiss broker believes shares are finally back to a point where they’re worth a punt.

JP Morgan Cazenove analysts also think the only way is up for its top pick Kingfisher.

The DIY retailer will be crossing its fingers for an Indian summer after an April washout hit sales at B&Q.

The broker has a similarly positive attitude towards supermarket struggler Morrisons (LON:MRW), upgrading its rating to ‘neutral’ from ‘underweight’.

JP Morgan Cazenove analysts think it’s now time for investors to hold on to their cards given the recent share price fall, which makes it just a little more compelling.

The stock continued on its steadily declining path this morning.

Oil rig maker Lamprell (LON:LAM) has sunk to the bottom of the pile as a profit warning scared off investors.

Shares plummeted 60 per cent today to 120 pence on the news and analysts at Investec Securities are shaking their heads in disbelief at the company, which it says is renowned for being accident prone.

It’s safe to say the broker’s ‘buy’ stance and 450 pence price target won’t last for long.

In a double take-down this morning, UBS slashed ratings for double act Xstrata (LON:XTA) and Glencore (LON:GLEN), sending shares tumbling.

Commodity trader Glencore has its potential merger partner to blame for the downgrade as Xstrata’s production was rocked by lower coal prices and higher costs.

The miner looks like it will drag Glencore through the mill with more challenges on the horizon for alloys and coal.

Both companies have been downgraded to ‘neutral’ from ‘buy’, while miner Xstrata’s target price was cut by nearly 400 pence to 1,080 pence.

Small and mid-caps got a ringing endorsement from brokers today.

In the oil and gas sector, Tethys Petroleum (LON:TPL) and Lansdowne Oil and Gas (LON:LOGP) were among the top picks.

With a significant upgrade to its resource estimate for its Kazakhstan assets announced today, Tethys’ share price, which currently stands at 45 pence, could be set to soar, says broker Fox-Davies.

And if the next well planned to be spud at the end of June comes back with more positive data, the broker thinks the shares have the potential to reach new heights.

Meanwhile, broker finnCap believes investors are missing out on the significant value in the Barryroe well in the Celtic Sea, in which Lansdowne has a 20 per cent interest.

Lansdowne's share price, which has dropped well below recent highs, offers “steep discount” for investors.

And with a target price of 70 pence, double the current share price of 35 pence, the broker sees excellent value in the Irish company.

The news today was equally promising for the mining sector.

FinnCap analyst Martin Potts sees the start of Minera IRL’s (LON:MIRL) permitting process as a sign of the company’s commitment to developing the Don Nicolas project in the face of negative market sentiment towards Argentina.

Minera views the YPF/Repsol saga as a one-off and investors shouldn’t worry about the futures of other resource companies in the country.

Sticking with South America, Brazil-focused Horizonte Minerals (LON:HZM) is making steady progress with its nickel and gold projects.

Potts says the stock is one investors should keep a close eye on as the imminent preliminary economic assessment of its flagship project will be a “significant milestone”.

The encouraging scoping study at Ferrex’s (LON:FRX) Malelane iron ore project in South Africa shows that its parameters are “promising”, says City firm Fairfax.

The broker is a big fan of the management team and reckons this is a project “well worth following”.

In neighbouring Lesotho, Namakwa Diamonds (LON:NAD) is another stock worth keeping tabs on with its diamonds far exceeding the prices anticipated at its first sale in Antwerp.

But broker Fairfax added one note of caution however. It claims the company is facing “some operational challenges” in the form of water shortages which could affect productivity.

Unfortunately this is part and parcel of operating in this terrain, the broker said.

The FTSE 100 fell sharply in the morning but recouped part of its losses later in the day thanks to better than expected UK jobs data released by the Office for national Statistics. The UK’s blue chip index stood at 5,426 at midday, down 11 points (0.2 percent) from Tuesday’s close.

The figures revealed a surprise drop of 45,000 in unemployment to 2.63 million for the first quarter and a 13,700 decline in jobless claims to 1.59 million. The unemployment rate dipped to 8.2 percent from 8.4 percent in the previous three months.

The positive impact of the jobs data was offset by continuing uncertainty in Greece, which will hold another election on June 17, and bearish comments from the Bank of England.

The BoE has reduced its growth forecasts to 0.8 percent from 1.2 percent previously with government Mervyn King saying Britain is facing a slow and uncertain recovery and warning of a “storm heading out way from the continent”.

King said the euro zone is “tearing itself apart without any obvious solution”.

“On top of all the European woes there’s the concern that China is slowing down quicker than was previously thought and indeed hoped for, and this is compounding the fears that both will have an even greater negative effect on global growth,” said chief executive of London Spreads Simon Denham.

Hedge fund manager Man Group (LON:EMG, up 4.1pct at 83.1p) and speciality chemicals group Croda (LON:CRDA, up 4pct at 2,203p) topped the leaderboard this afternoon.

Shares in Man Group got a boost from demand from bargain hunters, which bought the stock after it fell sharply over the past couple of days.

Investors also bought banking groups including Barclays (LON:BARC, up 3.5pct at 192.7p), Royal Bank of Scotland (LON:RBS, up 2.3pct at 21.84p) and Standard Chartered (LON:STAN, up 1.5pct at 1,375p).

Demand for banking stocks was lifted by a bullish note on Barclays from UBS, which upgraded the banking group to ‘buy’ from ‘neutral’.

Other notable risers included engineering firms IMI (LON:IMI, up 3pct at 907.5p) and GKN (LON:GKN, up 2.3pct at 194.6p) and Russian steelmaker Evraz (LON:EVR, up 2.4pct at 336.2p).

Meanwhile, traders dumped shares in retailers Sainsbury’s (LON:SBRY, down 3.4pct at 300.7p), Morrison (LON:MRW, down 1.6pct at 272.8p) and Kingfisher (LON:KGF, down 1.3pct at 281.5p).

Likewise, precious metals miners fell out of favour with Fresnillo (LON:FRES, down 3.3pct at 1,334p) andPolymetal (LON:POLY, down 2.4pct at 789.5p) showing up among the heaviest fallers in the top flight along with base metals miner Xstrata (LON:XTA, down 1.3pct at 986.5p).

US markets

US stocks were off to a positive start this morning on the back of better than expected US housing data.

the Dow Jones Industrial Average (DJIA) advanced 56 points (0.45 percent) to 12,688 and the broader S&P 500 index rose eight points (0.6 percent) to 1,339.

The Commerce Department that housing start climbed 2.6 percent to an annualised pace of 717,000 units in April, while the estimate for March was revised up to 699,000 units from 654,000.

A Bloomberg News poll predicted a 4.7 percent increase in housing starts to an annualised rate of 685,000.

However, building permits fell more than expected, dropping seven percent to 715,000 units in April from the previous month.

Later today, the Department of Energy will report oil inventories data and the Federal Reserve will release minutes from its latest policy meeting.

UK corporate news

Back in the UK, other news in the top flight included BG Group’s (LON:BG., up 0.5pct at 1,282p) fifth consecutive Tanzania gas discovery with the Mzia-1 exploration well located in Block 1, offshore southern Tanzania.

Preliminary evaluation of the results indicates 55 metres of natural gas pay in good quality sands.

Significantly, the well has de-risked a number of adjacent Cretaceous prospects, which could form part of a future Mzia hub, said BG.

These prospects are expected to be tested in a future appraisal programme to be defined following incorporation of data from this new well and 3D seismic.

The group operates and holds a 60 percent interest in blocks 1, 3 and 4 offshore Tanzania, with Ophir Energy (LON:OPHR, up 11.5pct at 574.5p) holding 40 percent.

Fellow oil and gas group Tullow Oil (LON:TLW, flat at 1,392p) this morning confirmed that a drill ship has been contracted to begin work next month on further exploration of the Zaedyus discovery in French Guiana.

It follows the drill success late last year. The plan initially is to appraise the Zaedyus-1 well and explore for deeper objectives. This will be followed by an exploration wildcat well.

“Planning is also ongoing to acquire two large 3D seismic surveys,” Tullow added in a statement this morning. 

Shell (LON:RDSB, up 0.5pct at 2,088.5p) with a 45 per cent stake in Zaedyus is taking operatorship of the breakthrough discovery, which is a facsimile of the producing Jubilee field off the coast of Ghana.

Elsewhere in the FTSE 100, interdealer broker ICAP (LON:IAP, flat at 335p) reported that its revenues reached £1.68 billion in the year to end March, down three percent from the previous year and pre-tax profits tumbled 16 percent to £217 million.

Earnings per share were down 26 percent at 22 pence.

The group noted that its electronic business posted a record full year operating profit of £127 million, up four percent from the previous year, while revenues declined one percent to £301 million.

Electronic and post trade risk and information contributed 59 percent of operating profit.

“ICAP delivered a solid performance in 2011/12 against a difficult economic environment,” said chief executive of ICAP Michael Spencer.

“Our strong balance sheet and diversified business give us options when we look at where best to invest for the future. This will ensure ICAP is extremely well placed when markets normalise.”

The FTSE 100 fell sharply in the morning but recouped part of its losses later in the day thanks to better than expected UK jobs data released by the Office for national Statistics. The UK’s blue chip index stood at 5,426 at midday, down 11 points (0.2 percent) from Tuesday’s close.

The figures revealed a surprise drop of 45,000 in unemployment to 2.63 million for the first quarter and a 13,700 decline in jobless claims to 1.59 million. The unemployment rate dipped to 8.2 percent from 8.4 percent in the previous three months.

The positive impact of the jobs data was offset by continuing uncertainty in Greece, which will hold another election on June 17, and bearish comments from the Bank of England.

The BoE has reduced its growth forecasts to 0.8 percent from 1.2 percent previously with government Mervyn King saying Britain is facing a slow and uncertain recovery and warning of a “storm heading out way from the continent”.

King said the euro zone is “tearing itself apart without any obvious solution”.

“On top of all the European woes there’s the concern that China is slowing down quicker than was previously thought and indeed hoped for, and this is compounding the fears that both will have an even greater negative effect on global growth,” said chief executive of London Spreads Simon Denham.

Hedge fund manager Man Group (LON:EMG, up 4.1pct at 83.1p) and speciality chemicals group Croda (LON:CRDA, up 4pct at 2,203p) topped the leaderboard this afternoon.

Shares in Man Group got a boost from demand from bargain hunters, which bought the stock after it fell sharply over the past couple of days.

Investors also bought banking groups including Barclays (LON:BARC, up 3.5pct at 192.7p), Royal Bank of Scotland (LON:RBS, up 2.3pct at 21.84p) and Standard Chartered (LON:STAN, up 1.5pct at 1,375p).

Demand for banking stocks was lifted by a bullish note on Barclays from UBS, which upgraded the banking group to ‘buy’ from ‘neutral’.

Other notable risers included engineering firms IMI (LON:IMI, up 3pct at 907.5p) and GKN (LON:GKN, up 2.3pct at 194.6p) and Russian steelmaker Evraz (LON:EVR, up 2.4pct at 336.2p).

Meanwhile, traders dumped shares in retailers Sainsbury’s (LON:SBRY, down 3.4pct at 300.7p), Morrison (LON:MRW, down 1.6pct at 272.8p) and Kingfisher (LON:KGF, down 1.3pct at 281.5p).

Likewise, precious metals miners fell out of favour with Fresnillo (LON:FRES, down 3.3pct at 1,334p) and Polymetal (LON:POLY, down 2.4pct at 789.5p) showing up among the heaviest fallers in the top flight along with base metals miner Xstrata (LON:XTA, down 1.3pct at 986.5p).

US equity futures indicate a higher open after fears of a Greek bank run eased following comments from the ECB that it will continue to support Greek banks; stronger US Housing data also aided equity markets which have staged a strong recovery off Asian session lows.

DJIA

Other news:

General Electric – Co. has accelerated its growth in mining with the acquisition of equipment makers Industrea Ltd for AUD 700mln and Fairchild International with terms undisclosed. (Sources) In other news the co.’s GE capital unit plans a USD 4.5bln special dividend to General Electric in 2012; accelerate share buybacks starting in Q2, with the GE Capital board declaring a dividend of USD 475mln to the parent. (Sources)

Home Depot – According to Barron’s the co. may have a hard time heading higher after disappointing Q1 sales and guidance and appears over-valued. (Barron’s)

Bank of America – Co. has launched a program that offers larger relocation payments for delinquent mortgage customers who complete qualifying short sales. (Sources)

JPMorgan – Co.’s individual trades that led to a USD 2bln loss weren’t monitored by the Office of the Comptroller of the Currency, which said it didn’t expect to be notified about the positions. (Sources)

Companies going ex-dividend: Chevron (USD 0.9000), 3M (USD 0.5900), United Tech (USD 0.4800)

S&P 500

Earnings:

JC Penney – Q1 adjusted loss per share USD 0.25 vs. Exp. loss per share USD 0.08; cuts forecast, Q1 net sales USD 3.15bln vs. Exp. USD 3.43bln. (Sources)

- Q1 same store sales down 18.9%,

- Co. ended their USD 0.20 a share quarterly dividend

- Co. sees missing year gaap EPS of USD 1.59 on charges and write-downs

- Co. sees incurring added restructuring charges

- Co. says may incur added merchandise write-downs and exits certain lines of merchandise

Target - Q1 adjusted EPS USD 1.11 vs. Exp. USD 1.01; boosts forecast for year EPS by USD 0.05, Q1 revenue USD 16.87bln vs. Exp. USD 16.87bln. (Sources)

- Co. sees year EPS USD 4.10-4.30. saw USD 4.05-4.25 vs. Exp. USD 4.26

- Co. says view reflects continued economic uncertainty

Abercrombie & Fitch - Q1 EPS USD 0.03 vs. Exp. USD 0.01; reaffirms forecast for year EPS, Q1 revenue USD 921.20mln vs. Exp. USD 953.74mln. (Sources)

- Co. cuts forecast for year sales

- Q1 comparable sales down 5.0% vs. Exp. down 0.4%

Deere - Q2 EPS USD 2.61 vs. Exp. USD 2.53; boosts forecast, Q2 revenue USD 10.01bln vs. Exp. USD 9.64bln. (Sources)

- Co. sees 2012 net USD 3.35bln vs. USD 3.275bln (Exp. USD 3.24bln)

Staples - Q1 adjusted EPS USD 0.30 vs. Exp. USD 0.30 - reaffirms forecast, Q1 sales USD 6.10bln vs. Exp. USD 6.19bln. (Sources)

- -Co. sees 2012 revenue up in the low single digit range

Other news:

Northrop Grumman – Co. increased their quarterly dividend to USD 0.55 from USD 0.50 vs. Exp. USD 0.54. (Sources)

Safeway – Co. boosted their quarterly dividend to USD 0.175 per share from USD 0.145 vs. Exp. USD 0.175. (Sources)

Amylin Pharmaceuticals - Pfizer, AstraZeneca and Sanofi are among companies to have signed confidentiality agreements with co. on its sale process. (Sources)

AMD – Co. has announced the release of its 2nd-generation A-series APUs for use in notebooks, desktops, home theater PCs, and embedded designs. (theflyonthewall.com)

PepsiCo - Ralph Whitworth's Relational Investors has built a stake worth about USD 610mln in PepsiCo, holding almost 9mln shares, or 0.6% of shares outstanding, at March 31. (Sources)

Ralcorp – Co. announced a further delay in Q2 results and form 10Q filing in order to conclude both the internal and external in-depth reviews associated with its previously announced financial restatements. (Sources)

Chesapeake Energy – Co. announced it has increased the size of a previously announced unsecured term loan from Goldman Sachs and affiliates of Jefferies from USD 3bln to USD 4bln based on strong investor demand. (theflyonthewall.com)

AIG – Co. CEO Robert Benmosche increased non-government-guaranteed residential and commercial-mortgage backed securities holdings by USD 11.1bln since 2010 to USD 28.4bln at the end of March. (Sources)

Medtronic – Co.’s In.Pact drug eluting balloons showed a significant benefit in peripheral and coronary arteries according to a Bello study. (Sources)

Talbots - Sycamore Partners disclosed that it and Talbots entered into an amendment to the letter agreement dated May 5 between the parties pursuant to which they agreed to extend the expiration of the exclusivity period provided from May 15 to May 22. (theflyonthewall.com)

Companies going ex-dividend: Visa (USD 0.2200), Capital One Financial (USD 0.0500), Duke Energy (USD 0.2500), Whirlpool (USD 0.5000), Honeywell (USD 0.3725), Invesco (USD 0.1725), Linear Tech (USD 0.2500), Marriott (USD 0.1300), Progress Energy (USD 0.6200), Cummins (USD 0.4000)

Companies paying dividend: Noble (USD 0.1400)

Nasdaq 100

Other news:

Apple – Co.’s future iPhones are expected to have larger screens that previous smartphones, production set for next month will have screens that measure at least 4 inches compared to the 3.5 inches on the iPhone 4S. (WSJ) In other news HTC says the launch of a new smartphone in the US is being delayed due to a customs review required after the International Trade Commission ruled last year that the firm violated a patent held by Apple. (WSJ) Finally China Mobile Chairman Xi Guohua says they're in talks with Apple to offer the iPhone, but he can’t predict if the two sides will come to an agreement this year. (Sources)

Google – Co. plans to expand its "early access" to new releases of its Android mobile operating system from just one mobile device-maker partner to multiple device-makers and to sell those devices directly to consumers. (WSJ)

Research In Motion – Facebook and Vodafone are rumoured to be eyeing the Co. for a takeover. (Daily Mail)

Companies going ex-dividend: Paccar (USD 0.2000)

Companies paying dividend: Activision Blizzard (USD 0.1800)

Broker moves

Upgrades:

Transocean – Co. upgraded to Neutral from Underperform at Macquarie, Price target remains USD 53

PepsiCo – Co. upgraded to Outperform from Underperform at CLSA, Price target raised to USD 75 from USD 66

Weatherford – Co. upgraded to Overweight from Neutral at JPMorgan, Price target is USD 19

Akamai – Co. upgraded to Neutral from Sell at Citigroup, firm keeps a USD 32 price target

Cisco – Co. upgraded to Overweight from Equal Weight at Barclays, Price target remains USD 21

Fossil – Co. upgraded to Buy from Neutral at Citigroup, firm keeps an USD 88 price target

Downgrades:

Patriot Coal – Co. downgraded to Market Perform from Outperform at FBR Capital, Price target is USD 4

Baker Hughes – Co. downgraded to Neutral from Overweight at JPMorgan, Price target is USD 50

Aetna – Co. downgraded to Hold from Buy at Argus

CNBC’s Jim Cramer on US corporate earnings

WEDNESDAY earnings: John Deere should see a perpetually downbeat conference call, Target a retailer whose prospects are looking up, along with two restaurants Jack in the Box and Red Robin. Cramer said he's intrigued by Target, but would only listen to the two burger chains'' results.

THURSDAY earnings: Ross Stores, Gap Stores and Dollar Tree, along with cloud computing giant Salesforce.com. Cramer said to buy any of the retailers on weakness, but only pickup Salesforce if the weakness is severe.

FRIDAY earnings: the expected IPO of Facebook and Cramer once again told investors to get in on the IPO, if they can, but absolutely do not buy any shares in the aftermarket.

Hedge Fund Holding updates

Berkshire Hathaway reports decreased stakes in Intel, Kraft, Procter & Gamble, unchanged stake in Ingersoll-Rand, increased stakes in Wal-Mart, Wells Fargo, DirecTV and reported new stakes in General Motors, Viacom. (Sources)

Pershing Square reports decreased stakes in Family Dollar, Kraft, Fortune Brands. (Sources)

BP Capital reports decreased stake in Chesapeake. (Sources)

SAC Capital reports decreased stakes in Apple, Boeing, Dollar General and increased stakes in 3M. (Sources)

Soros reports decreased stakes in InterOil, Motorola, Medicines Co, Wells Fargo, Soros liquidates stake in Google, YPF SA, KeyCorp, Delta Air Lines, reports increased stakes in Sara Lee, Acacia Research, Elan, Charter and new stakes in CVR Energy, SunTrust, Digital River, Chevron, Macy's and JP Morgan. (Sources)

Third Point reports new stakes in Cisco, Apple and an increased stake in Yahoo!. (Sources)

Greenlight reports new stakes in CSC, Expedia and liquidates stake in Yahoo!. (Sources)

Carl Icahn reports no longer holding a stake in El Paso or Motorola Solutions. (Sources)

Other News

SINA Q1 loss per share USD 0.21 vs. Exp. loss per share USD 0.23, Q1 revenue USD 106.2mln vs. Exp. USD 102.56mln. (Sources)

- Co. sees Q2 revenue USD 126-129mln vs. Exp. USD 130.44mln

US Banks – Derivative regulators are likely to be questioned about their oversight of JP Morgan’s complex trades, with the discussion on the implementation of derivatives regulation to be discussed next Tuesday at a Senate hearing. (Sources)

General Motors - Ally Financial is not planning to sell its US auto lending operations, it is looking to sell its auto-finance, insurance and banking operations in Canada, Mexico, South America and Europe. (Detroit News)

Facebook – Co. boosted the size of their IPO by around 25% to 421mln shares from 337.4mln; the revised deal range remains USD 34.00-38.00. (CNBC/Sources)

Gaylord Entertainment – Co. may be for sale for in excess of USD 1.5bln after shareholders voted to allow a poison pill guarding against unwanted takeovers expire. (Sources)

Barclays (LON:BARC) and B&Q owner Kingfisher (LON:KGF) were the top broker calls this morning.

Both have been dragged down in the recent market turmoil. But according to City heavyweights UBS and JP Morgan Cazenove both have fallen far enough, offering two great opportunities for value investors.

Barclays’ share price has suffered in recent weeks and UBS analysts reckon concerns over its exposure to Spain, where it has a network of more than 450 branches and employs nearly 4,000 people, are to blame for this.

The Swiss broker believes shares are finally back to a point where they’re worth a punt.

JP Morgan Cazenove analysts also think the only way is up for its top pick Kingfisher.

The DIY retailer will be crossing its fingers for an Indian summer after an April washout hit sales at B&Q.

The broker has a similarly positive attitude towards supermarket struggler Morrisons (LON:MRW), upgrading its rating to ‘neutral’ from ‘underweight’.

JP Morgan Cazenove analysts think it’s now time for investors to hold on to their cards given the recent share price fall, which makes it just a little more compelling.

The stock continued on its steadily declining path this morning.

Oil rig maker Lamprell (LON:LAM) has sunk to the bottom of the pile as a profit warning scared off investors.

Shares plummeted 60 per cent today to 120 pence on the news and analysts at Investec Securities are shaking their heads in disbelief at the company, which it says is renowned for being accident prone.

It’s safe to say the broker’s ‘buy’ stance and 450 pence price target won’t last for long.

In a double take-down this morning, UBS slashed ratings for double act Xstrata (LON:XTA) and Glencore (LON:GLEN), sending shares tumbling.

Commodity trader Glencore has its potential merger partner to blame for the downgrade as Xstrata’s production was rocked by lower coal prices and higher costs.

The miner looks like it will drag Glencore through the mill with more challenges on the horizon for alloys and coal.

Both companies have been downgraded to ‘neutral’ from ‘buy’, while miner Xstrata’s target price was cut by nearly 400 pence to 1,080 pence.

Lamprell (LON:LAM) grabbed headlines this morning after losing half of its value on a profit warning. The oil and gas engineering firm was atop the list of the most popular searches on Google Finance as investors monitored market reaction to trading update and the drop in its share price.

The report revealed that the group has experienced delays with equipment deliveries for new build jackup projects along with the progressive slippage in the timing of expected contract wins.

As a result the group expects its full year profit margin to be at 3.5 percent, considerably below management expectations, while it is anticipated that revenues will be in line with last year at around US$1.1 billion.

The group added that it will likely post a small loss for the first half of the year.

Lamprell added that its profit margins should recover in 2013.

Shares in Lamprell changed hands at 120 pence this morning compared with Tuesday’s close of 294.8 pence.

Other notable movers included Yell Group (LON:YELL), which managed to tack on three percent to reach 3.31 pence in early deals despite today’s broad sell-off.

The digital services group has bought do it yourself website and online shop builder Moonfruit Limited for £18 million, which will be funded entirely from the group’s cash reserves.

The acquisition is in line with the group’s strategy to transform into a provider of print and online advertising for small and medium-sized enterprises (SMEs), aiming to become a leader in the emerging local eMarketplace.

The eMarketplace comprises a platform and digital portal where consumers and SMEs can connect and transact.

Moonfruit is expected to add to Yell’s ability to provide websites, mobile sites and simple - "light" - commerce services to millions of SMEs. The deal also complements the acquisition of multi-store ecommerce specialist Znode last year.

“We believe there are significant strategic, cultural and operating synergies between Yell and Moonfruit,” said chief executive of Yell Mike Pocock.

“The addition of Moonfruit's services and team helps us provide competitive advantage to our global SME customers in connecting with consumers through digital, mobile and social.”

Greggs (LON:GRG) and AFC Energy (LON:AFC) also showed up among the most followed stocks of the day after Greggs updated investors on its performance and AFC said it managed to extend the life of its electrodes to over three months.

Bakery Greggs saw its sales rise 4.3 percent in the 19 weeks to May 12, however, like for like sales – which exclude the impact of new store openings – fell 1.8 percent, which the bakery said was in line with the performance for the first 10 weeks of the year.

The decline in sales came amid the “extremely challenging” trading, weak high street footfall and the rainy weather in April and early May.

During the first 19 weeks of the year, Greggs opened 25 new shops and closed five, taking the total number of shops to 1,591.

The new shops are trading well and the group remains on track to hit its target of adding a net 90 new shops by the end of the year.

Greggs expects customers’ disposable incomes to remain under pressure from high fuel, energy and food costs, however it added that sentiment could get a boost from the upcoming Olympics, the Euro 2012 football championship and the Diamond Jubilee.

In its report, alkaline fuel cell systems supplier AFC noted that the extension of the life of the electrodes is a significant development as it has identified that the first economic applications require a minimum of three months electrode life.

Electrodes enable the electrochemical reactions to occur between hydrogen and oxygen to generate electricity, heat and water.

The laboratory tests are continuing and are expected to yield further positive results in due course, added AFC.

“This is another milestone on our path to commercialisation. We have seen significant improvement in laboratory performance from this development; now we need to translate this to the industrial environment,” said AFC chief executive Ian Williamson.

Meanwhile, Tullow Oil’s (LON:TLW) confirmation that a drill ship has been contracted to begin work next month on further exploration of the Zaedyus discovery in French Guiana was not the only update from and oil and gas company that caught the eye of investors this morning.

Other reports that made the list of the most read RNS statements included an interim management statement from Soco and Polo Resources’ (LON:POL) announcement of an increase in its stake in African operating group Signet Petroleum.

Polo has exercised options for nearly three million shares worth US$10 million, which will be used to fund Signet’s exploration activities in Tanzania, Burundi, Namibia and Benin.

The company now has 7.8 million shares in Signet, which gives it a 17.9 percent stake.

The report from Soco revealed that its second production platform at the Te Giac Trang (TGT) field, offshore Vietnam, is on track to begin flowing oil this summer to increase production to around 55,000 barrels of oil per day.

Group output in the first four months of 2012 averaged 11,690 boepd net to the firm's working interest  -  a 358 per cent increase compared to the period in 2011.

Sector peer Gold Oil (LON:GOO) also generated interest today, reporting that the operator of its Azar Block in the Putumayo basin in Colombia has spudded the La Vega Este -1 well targeting the Villeta formation with the Caballos as a secondary objective.

The company is currently producing from the Villeta formation in its Nancy Burdine fields.

Operator Gran Tierra Energy has estimated that the well, which has a 34 percent chance of success, could flow oil at initial rates of between 1,500 and 2,000 barreos of oil per day (bopd) if all of its targets turn out to be oil bearing.

The well is expected to take 35 days to drill and if it indicated oil potential it will be completed and tested using a less expensive work over rig.

International oil and gas company Manas Petroleum Corp. (CVE:MNP) (OTCBB: MNAP) said it posted a profit in the first quarter of 2012 on increased activity at its intersts in South-Eastern Europe, Central Asia and Mongolia.

For the three-month period that ended March 31, the company, based in Barr, Switzerland, posted a profit of C$13.99 million, or eight cents per share, as compared to a net loss of C$9.87 million or eight cents per share, for the same period in 2011.

Highlights from the company’s operations in the first quarter include continued integration and interpretation of seismic data acquired in 2011 by the company’s Mongolian subsidiary, Gobi Energy Partners.

Gobi is currently focusing on six areas with 15 prospects, and Manas said a passive seismic campaign using low-frequency spectroscopy was started in April to assist in ranking the prospects.

A 2D seismic campaign (vibroseis) to acquire 321 kilometres is planned for June 2012.

Manas said that a contract for 2D seismic activity has been signed and a contract for drilling is under negotiation, with mobilization of the crew planned for May.

Spudding is scheduled for July, subject to rig availability, and Manas said Gobi intends to drill two wells back-to-back. The contract has an option for drilling additional wells in 2013.

In Mongolia, Manas owns record title to the two production sharing contracts covering Blocks XIII and XIV through its wholly-owned subsidiary DWM Petroleum AG, but 26 percent of the beneficial ownership interest in these blocks is held in trust for others.

In Tajikistan, the company’s Tajik subsidiary, Somon Oil, continued with the compilation and integration of its technical database.

As of quarter-end, Manas said a total of 793.6 kilometres of 2D seismic had been recorded, with processing and interpretation ongoing.

Somon Oil finalized the acquisition of a total of 871 kilometres of 2D seismic after March 31, and drilling planning for the first two wells is ongoing. Manas said preliminary well designs and well budgets have been prepared.

The company noted that earlier this month, the Government of the Republic of Tajikistan ratified the Production Sharing Agreement with Somon Oil.

Manas said that under the terms of the agreement, Somon Oil is granted the "exclusive right and authority to carry out all petroleum exploration, development and production activities in the contract area for a term of 30 years," with the right, under specified circumstances, to renew for up to two additional five year periods.

Manas holds a 25 per cent interest in CJSC South Petroleum Company, and said that during the first quarter of 2012, CJSC provided support for drilling planning and seismic operations in Tajikistan.

The company reported that CJSC recorded 24 kilometres of 2D seismic in the Tuzluk Block as part of the Tajik seismic survey.

The agreement provides for a framework within which exploration, development and production activities will be planned, conducted and paid for, said Manas.

In the Kyrgyzstan Republic, Manas has signed a US$54 million farm-out agreement with Santos International Holdings, a subsidiary of Australia's third largest oil and gas company. The unification and update of resource evaluation of all Kyrgyz prospects are still ongoing.

In Albania, Manas participates in a 1.7 million acre exploration project through its 31.7 per cent equity interest in PetroManas Energy (CVE:PMI).

PetroManas is entering the operational phase of its drilling program on its Albanian properties, said Manas, adding that a drilling contract has been signed with KCA Deutag and three wells are planned to be drilled this year.

PetroManas plans to spud the first well in the second quarter. Manas noted that PetroManas farmed out 50 per cent of its interest to Shell.

Total operating expenses increased in all segments during the first quarter, said the company. Exploration costs rose due to higher exploration activities in Mongolia.

The company, which had cash and equivalents of approximately C$10.7 million at quarter-end, also saw higher stock-based compensation expense.

Greece confirms the passover to a caretaker government and a second wave of general elections due on June 17th.

BoE revise their near-term inflation expectations higher, and their growth forecasts lower; alongside analyst expectations.

BoE’s King remains somewhat dovish, keeping the option for further QE open in the face of increasing downside risks.

RANsquawk European Morning Briefing Video: www.youtube.com/watch?v=W3lSYbURXYE

Market Re-Cap

European equities are seen lower across the board with the exception of the CAC-40 index as markets remain nervous towards the prospect of a second wave of Greek general elections. The outperformance of the CAC-40 follows the news from oil major Total, who have stemmed the gas leak from their Elgin well successfully after conducting intervention. As such, Total are seen higher by over 2%, strongly above the Oil & Gas sector.

The Bank of England have released their latest projections for the UK economy, revising lower their growth forecasts and higher their near-term inflation expectations, alongside analyst forecasts. The BoE have stuck to their long-term predictions that there will be a slow but steady return to recovery, but reiterated that major downside risks exist from Europe. Governor King’s subsequent press conference has shown him to remain somewhat dovish, commenting that an increase in downside risks would prompt the bank to commit to further actions, leaving the door to a boost in asset purchases open. The forecast revisions prompted a sharp move lower in GBP/USD, falling around 75 pips and Gilt futures moving 55 ticks to the upside after the opening comments. At the midpoint of the session, GBP/USD remains in negative territory despite seeing support before the inflation report after better than expected UK jobless claims data.

Asian Headlines

According to unsourced reports, the BoJ could cut their interest rates on reserves. (Financial Facsimile Service)

The Vice-Chairman of the Chinese banking watchdog has said regulators do not plan to change the country’s RRR, and policymakers are now studying a regulatory system in which banks would extend loans at a steadier pace. (Sources)

New lending by China’s four largest state-owned banks was flat for the first two weeks of this month, and total deposits continued the decline from April to fall by approximately CNY 200bln. (Shanghai Securities News)

US Headlines

The Republican leader of the House of Representatives has set the stage for a new fiscal showdown with the Obama administration; reviving memories of the standoff last summer which saw the US lose its ‘AAA’ rating. (FT)

The Federal Housing Financing Agency has expressed concern on the potential Californian anti-robosigning laws, saying that the new ruling could have a chilling effect on lawful foreclosures. The FHFA added that the ruling could lead to a reduction in credit availability and could create significant risks for the housing markets. (Sources)

EU and UK Headlines

Greece is now heading for a second wave of elections on June 17th, after party leaders failed to form a stable governing coalition. (ekathimerini) As such, markets remain cautious as the anti-bailout party Syriza lead in the latest opinion polls, suggesting the party could receive as much as 32% of the vote. (Athens News) The Greek President has now appointed a caretaker government for the country until the new elections pass.

The Bank of England have released their latest Quarterly Inflation Report, highlighting the risks that the UK still faces from the Eurozone crisis. The BoE have revised their inflation expectations and foresee CPI remaining above the 2% target for the next 12months, a longer period than previously expected in February. The bank has also revised lower its growth forecasts in the light of the most recent GDP prints, forecasting expansion to remain subdued in the near term, placed under pressure by European concerns, growing by 1.25% in Q4 on a yearly basis. Notably, BoE’s King, when questioned on future risks to the UK economy, responded by saying that if there were major downside developments in the Eurozone, the bank would respond in many ways, not just QE, leaving possible further asset purchases on the table. The somewhat dovish comments combined with the downwards revisions to growth pared strength seen in GBP/USD following better than expected jobs data from the UK. Safe-haven flows were also noted into Gilt futures, moving higher by over 55 ticks following the report.

Before the inflation report, the UK reported its largest fall in jobless claims since July 2010 in some much better than expected unemployment data. GBP did see strength following the release, but this was quickly sold off following the inflation report.

UK Jobless Claims Change (Apr) M/M -13.7k vs Exp. 5.0k (Prev. 3.6k, Rev. -5.4k)

UK Claimant Count Rate (Apr) M/M 4.9% vs. Exp. 5.0% (Prev. 4.9%)

UK ILO Unemployment Rate (3M) (Mar) 8.2% vs. Exp. 8.4% (Prev. 8.3%) (Sources)

Eurozone inflation data has come in alongside expectations, with trade balance figures showing a larger-than-expected surplus. (Sources)

Eurozone CPI (Apr) Y/Y 2.6% vs. Exp. 2.6% (Prev. 2.7%)

Eurozone CPI (Apr) M/M 0.5% vs. Exp. 0.5% (Prev. 1.3%)

Eurozone Trade Balance SA (EUR) (Mar) M/M 4.3bln vs. Exp. 3.8bln (Prev. 3.7bln, Rev. 4.0bln)

Eurozone Trade Balance (EUR) (Mar) M/M 8.6bln vs. Exp. 4.0bln (Prev. 2.8bln, Rev. 2.3bln)

EQUITIES

European stocks are seen mostly lower, with the exception of the CAC-40, which has been pressed higher into positive territory with a notable contribution from Total, who have confirmed the successful intervention at their Elgin gas field, plugging the leak.

In individual stocks news, ENI have made a significant discovery at their offshore Mozambique field, estimating the find to hold between 7-10 TCF of gas, bringing their total potential for the area to 47-52 TCF across the site. Following the reports, shares in ENI spiked higher by around 2.6%. Shares now trade roughly flat, but this is still an outperformance of the Eurostoxx index.

The basic materials sector is seen as the worst performing at the midpoint of the European session. Ahead of the open in Europe, BHP Billiton’s Chairman commented that he foresees commodities prices easing in the near-term future as major tailwinds that were supporting the sector diminish. The Chairman highlighted that investor demand may fall in future months as demand from China eases and commodity prices decline. As such, basic materials companies underperform in Europe, with BHP Billiton and Glencore shares seen lower by 1.4% and 3.8% respectively. Glencore shares are being further weighed upon by a broker move pre-market from UBS, cutting the company to neutral from buy. (Sources)

FX

GBP/USD has seen some volatile movements throughout the morning, with both upside and downside factors prompting choppy trade. The UK posted some better-than expected jobs data halfway through the morning, providing some support, keeping the pair just below the 1.6000 mark. However, as BoE’s King presented his Quarterly Inflation Report, the cuts in GDP forecasts and the hints towards possible further QE in the future weakened GBP, spiking GBP/USD 75pips lower below 1.5900. The pair has recovered somewhat since then, and now trades lower by just over 50pips.

EUR/USD was seen grinding lower as Europe came to market touching session lows of 1.2681. The pair has somewhat recovered since then with unconfirmed market talk of bids in the pair at 1.2680 assisting the moves off the lows. EUR/USD is seen moving back towards the unchanged level for most of the European session so far but gains are seen somewhat capped with market talk of offers at the 1.2725 level, however this is also unconfirmed. The pair now trades between two touted option expiries at the 1.2700 and 1.2750 level.

COMMODITIES

WTI and Brent crude futures are trading markedly lower ahead of the NYMEX pit open amid ongoing European macroeconomic concerns, reaching multi-month lows ahead of the European open.

Oil & Gas News: North Sea oil output in June is set to be the lowest this year, with output to average 2.11MBPD, down from 2.17MBPD in May, according to shipping schedules. BHP Billiton’s Chairman has warned that he expects commodity markets to cool further as investors lose confidence in the global recovery. According to IBM, new 3D imaging technology from the company can make geologists and engineers more effective at mining the wealth of data from oil reservoirs and refineries in order to help extractors find and process oil. Under mounting pressure from the US, India are to cut their crude imports for refiners by 11% from Iran over the next fiscal year, according to the Indian junior oil minister. Royal Dutch Shell’s CEO has said he expects weaker oil prices in the second half of 2012 as demand growth from China and other emerging markets slows.

Geopolitical News: A former top US general has said Washington and Moscow should agree to an 80% cut in nuclear arsenals over the next decade to help encourage smaller atomic powers to engage in multi-lateral arms control negotiations. China have been quietly and gently pressuring North Korea to scrap their plans for a third nuclear test, according to two sources with knowledge of discussions between the countries.

Tethys Petroleum (LON:TPL, TSE:TPL) has been awarded a new oil field in Uzbekistan, from which it says there is good potential to increase production.

The Chegara field currently has limited production from three wells and lies 14 km south-west of the firm's existing North Urtabulak asset.

It has been the subject of minimal drilling and Tethys believes that with more work, it can increase production "substantially".

The deal at Chegara is for a 25 year production enhancement contract.

Tethys also announced today it had signed a memorandum of understanding (MOU) with NHC Uzbekneftegaz concerning a potential exploration  agreement for a block in the North Usyturt basin in Uzbekistan. 

The company believes this basin has very similar geological characteristics to the Akkulk block where it has the Doris oil discovery.

Chairman and president of Tethys, David Robson said he was delighted at the award of the Chegara field: "I would like to thank our partners, Uzbekneftegaz, Uzneftegazdobycha and Uznefteproduct, for their support and hard work in negotiating this new contract."

"We believe the Chegara Group of Fields has good potential through increasing production in existing wells and also large upside in undrilled areas."

Tethys has interpreted a significant volume of historic seismic, drilling, geological and production data relating to Chegara and plans to initially work over the existing wells.

It also plans to collect data to identify undrilled areas that provide high potential upside. 

Currently there are only State reserves assigned to the field and no figures yet under NI 51-101 reporting procedures, it said.

Earlier today, the company revealed it had increased the resource estimate for its Kazakhstan assets to 1.17 billion barrels of oil.

The upgrade was a result of additional 2D and 3D seismic acquisition and interpretation as well as drilling data, which has also increased the chance of success in the area.

Separately, it also told investors that its revenues jumped 45 per cent to US$6.49 million in the first quarter compared with the same period of 2011 as production increased to 5,117 barrels of oil equivalent per day (boepd) from 4,531 boepd.

Average output from the Doris field in Kazakhstan was 1,038 bopd -  up from 337 bopd a year earlier.

Minera IRL (LON:MIRL, CVE:IRL) said its Don Nicolas gold-silver project in Argentina has reached another major milestone - as the permitting process has now begun.

The company told investors today that the environmental impact assessment (EIA) had now been completed and presented to the secretary of mining of the Santa Cruz province of Argentina, marking the start of the permitting process.

According to the company, permitting, which is expected to take six months, should proceed expeditiously given the “outstanding” support from the authorities in Santa Cruz.

"The completion of the EIA and commencement of permitting marks another significant milestone in the development of the Don Nicolas Project in Patagonia,” said executive chairman Courtney Chamberlain.

"The future Don Nicolas Mine promises to be an attractive investment with considerable upside potential in a number of areas.

"We remain confident that we will have our first gold pour from Don Nicolas in late 2013.”

Don Nicolas will be a 350,000 tonne per year open pit mining operation producing 52,400 ounces of gold and 56,000 ounces of silver each year. 

It will cost around US$55 million to build and operating costs are estimated at US$528 an ounce, giving a margin of more than US$1,000 an ounce at current gold prices.

The mine is currently estimated to have a relatively short 3.6 year mine life but the company expects future exploration to extend this significantly.

Broker finncap said the announcement demonstrated the firm's commitment to the development of the Don Nicolas project, despite the current negative sentiment towards Argentina. 

"This negative sentiment has been primarily caused by the expropriation of the majority of Repsol’s holding in YPF, the local oil company. 

"Minera IRL’s take on this is that it was a specific one-off and should not be taken as applying to the extractive industries as a whole," analyst Martin Potts said in a note.

WTI and Brent crude futures are trading markedly lower ahead of the NYMEX pit open amid ongoing European macroeconomic concerns, reaching multi-month lows ahead of the European open.

Oil & Gas News: North Sea oil output in June is set to be the lowest this year, with output to average 2.11MBPD, down from 2.17MBPD in May, according to shipping schedules. BHP Billiton’s Chairman has warned that he expects commodity markets to cool further as investors lose confidence in the global recovery. According to IBM, new 3D imaging technology from the company can make geologists and engineers more effective at mining the wealth of data from oil reservoirs and refineries in order to help extractors find and process oil. Under mounting pressure from the US, India are to cut their crude imports for refiners by 11% from Iran over the next fiscal year, according to the Indian junior oil minister. Royal Dutch Shell’s CEO has said he expects weaker oil prices in the second half of 2012 as demand growth from China and other emerging markets slows.

Geopolitical News: A former top US general has said Washington and Moscow should agree to an 80% cut in nuclear arsenals over the next decade to help encourage smaller atomic powers to engage in multi-lateral arms control negotiations. China have been quietly and gently pressuring North Korea to scrap their plans for a third nuclear test, according to two sources with knowledge of discussions between the countries.

Corporate News: Total have successfully stopped the leak at their Elgin well after intervention. ENI have made an important discovery at their offshore Mozambique field, with the discovery estimated at between 7-10 TCF. The company now estimate the total potential at their Area 4 field at between 47-52 TCF. A group of Japanese firms is in talks to purchase a USD 4.4bln stake in Australia’s Wheatstone gas field that had been set aside for Tepco. Excelerate Energy plans to develop the US’ first floating LNG export plant off the Gulf Coast, with Royal Dutch Shell announcing similar plans in Western Canada in projects that are aimed towards shipping surplus gas overseas to take advantage of more lucrative markets. The European Commission have approved an Angolan LNG joint venture between Total, BP, Chevron, ENI and Sonangol.

Weather News:

The latest Weather Derivatives update forecasts temperatures in the US for the next 6-10 days to be 2.6% warmer than normal for this time of year with the Northeast region experiencing the most unseasonably warm weather. Using data accurate on the 15th May.

The NHC have said tropical storm Aletta appears to be weakening, with winds dropping to 40mph off the Mexican coast.

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The company, which has assets in Vietnam and Africa, said production in the first four months of 2012 averaged 11,690 boepd net to the firm's working interest  -  a 358 per cent increase compared to the period in 2011.

It said its focus from the beginning of the year to May 15 had been evaluating TGT (Te Giac Trang) reservoir performance on block 16-1, Vietnam, where it is accelerating the construction of a second platform, due to begin production in July/August.

Also, it is evaluating its exploration portfolio for a possible second round of drilling and evaluating potential new projects. 

In the period, the company said its entitlements production equalled 13,924 boepd and Soco said it was on track to meet its approximate 16,000 boepd guidance for the full year.

As at May 15, it had  $181.8 million in cash - an increase from $113.5 million as at December 31 last year.

In the Democratic Republic of Congo, at block V, the company highlighted that, having received the necessary permits, it is planning an aerial survey next month to assess the probability of hydrocarbons being present.

Looking ahead, it added: "The company continues to evaluate exploration opportunities in South East Asia and Africa.  

"Although there is no certainty that any new projects will be introduced in the near term, revenue from TGT oil sales is set to transform the cash resources of the company with the southern part of the field coming into production in a few months."

Tethys Petroleum (LON:TPL, TSE:TPL) has increased the resource estimate for its Kazakhstan assets to 1.17 billion barrels of oil.

In addition the oil resource, the new resource report - which is compliant with the NI51-101 standard – estimated the company’s associated unrisked gas prospective resources at 231 billion cubic feet (bcf).

There is also a separate, non-associated gas resource of 375 bcf.

The upgrade was a result of additional 2D and 3D seismic acquisition and interpretation as well as drilling data, which has also increased the chance of success in the area.

Tethys is now preparing to spud the AKD07 well, located to the south east of the original AKD01 (Doris) discovery well, in mid-2012 to test the Dyna exploration prospect that currently has a recoverable resource estimate of 128 million barrels of oil.

The well is also targeting 3P reserves at the Cretaceous Aptian sand level and a Jurassic sand similar to the horizon that tested oil in the AKD03 exploration well.

To date, over 13,000 barrels of oil per day (bopd) have been tested from exploration and appraisal wells in and around the Doris oil discovery.

“We are extremely pleased with this significant increase in our estimated oil resources in Kazakhstan,” said chairman and CEO of Tethys David Robson.

“With oil production forecast to steadily increase this year following the upgrade to the Aral Oil terminal, we believe that our strong and growing cash flow and upside in these large exploration targets provides a well-balanced development and exploration portfolio.”

A separate update from Tethys revealed that its revenues jumped 45 percent to US$6.49 million in the first quarter compared with the same period of 2011 as production increased to 5,117 barrels of oil equivalent per day (boepd) from 4,531 boepd.

Average output from the Doris field in Kazakhstan was 1,038 bopd, up from 337 bopd a year earlier.

Exploration investment company Polo Resources (LON:POL) has increased its shares in independent oil company Signet Petroleum.

Polo has exercised the balance of the option granted to the company by Signet on 22 August 2011 for a total consideration of US$10 million.

The proceeds will be used to fund Africa-focused Signet’s exploration activities in Namibia, Tanzania, Burundi and Benin as well as general working capital.

Following the issue of the new shares Polo will have 7,809,522 Signet shares or a 21.7 per cent stake and 17.9 per cent of the shares, excluding the Polo Warrant.

Polo has been granted a two year warrant over 1,428,572 new shares of Signet at an exercise price of US$3.50 per share. 

As well as oil and gas Polo holds interests in gold, iron ore and coal.

The Polo share price is down one per cent to 2.93 pence.

Caspian Holdings (LON:CSH) this morning unveiled encouraging results results from the second of five holes being drilled on the La Parrilla Tungsten project in south-west Spain.

The best intersections included 18 metres at 0.97 per cent tungsten trioxide starting at a depth of 230 metres and 10 metres at 0.17 per cent starting from a depth of 174 metres.

Caspian is 1,173 metres through a 1,500 metre campaign, which is targeting an open zone to the west of the existing open pit. 

Significant mineralisation has been seen in all holes drilled to date.  Initial indications suggest strong correlation of mineralised zones between holes, the company said.

Chairman Michael Masterman it added: “We are making very good progress with the drilling programme at La Parrilla, with strong indications of continuity of high grades through the western extension area.”

Morning View 

Gold prices likely to fall through the crisis but to pick up fast as economies readjust 

• The deeper the crisis the better gold may perform following a market fall

• Funds will flow back into US dollars in the short term 

US is to hit its ‘Fiscal Cliff’ just weeks after the US elections 

• US debt ceiling likely to be raised post the US election 

• Fed may look to issue QE3 potentially before the election to calm markets in anticipation of the ‘fiscal cliff’

Run on Greek banks saw Eur700m withdrawn yesterday 

• Cash withdrawals likely to spread around Europe, particularly in Spain, Italy and Portugal

• Northern Rock may look like a dry run with what might happen in Souther Europe

• Uncontrolled default may cause Eurozone banks to loose 20bp on their Risk Weighted Assets according to SocGen

We believe there is strong potential for equity markets to suffer on a run on Eurozone banks

• Deleveraging of funds and investor portfolios could cause further crisis 

• Miners and commodities are likely to suffer in this scenario

Greek exit from Euro should not be a major problem for Eurozone GDP

• Greece to repay Eur436m bond in full after investors refused to renegotiate 

• 96% of bond holders were recently persuaded to accept a 75% haircut in a bond swap leaving 4% of bond holders who stood their ground to get paid out in full

Solution:  Greece needs a zero coupon perpetual to fund its economic state – not sure who is going to put into it but it seems like the only type of bond the Greeks can service

German growth - German intransigence towards the plight of the Southern European nations is seen as causing unacceptable suffering within these economies

• Europe is not like the US where significant workforce mobility enables workers to follow the fortunes of better states.  Germany may not be so happy to accept the newly unemployed workers of Greece, Spain, Italy and Portugal in their quest for work. (See chart of Eurozone official unemployment rates at end of company section)

Miners are slashing capital budgets 

• The majors had created unfeasible capital budgets for potential expansion

• Majors were competing with each other on their project pipelines but now they are competing to see who can best conserve capital

• What is critical now is how much capital is firmly committed and how much can be held back to weather the forthcoming financial storm.

• CATerpillar is likely to see substantial changes to its orderbook.  Even firm orders will be renegotiated as the company bends to the demands of its major customers.

• Volvo, Komatsu, Bell and others may suffer similarly.

Companies getting desperate 

• We notice that companies are turning up ever earlier for meetings in these hard times

• Several companies have pitched up half an hour early recently in bids to secure funding

• Its as if we have sign saying ‘free cash’ hanging over the office entrance

Investors should focus on companies with sufficient cash to see them through this new phase of the financial crisis.

Some miners and explorers are well funded to see their way through this financial crisis

Economic News 

Europe – Would forcing Greece to leave the Euro encourage politicians/voters in other more important countries to stick to austerity and ingrain fiscal discipline?  As Voltaire wrote in his 1750’s masterpiece Candide “pour l’encouragement des autres”

• Would a Greek exit allow German policy makers to see the way for greater intervention from the ECB or even the printing of Eurobonds? 

• Predicting the direction of the crisis at this stage is impossible. One thing that is certain is that social unrest in Greece will become more entrenched before fresh elections are called. 

• On Monday the FT noted that the US managed to introduce a new currency in Iraq in less than 3 months. It was achieved however a squadron of 27 Boeing 747s and 500 armed guards. 

• Germany – After the positive GDP figures that emerged yesterday the Zew survey of the current situation in Germany reached 44.1 in May up from 40.7 in April. 

• Looking at the longer term Zew reading, sentiment has decreased. The index fell to 10.8 in May from 23.4 in April and below forecasts of 19.0 

• The spread between Spanish and 10 year bonds and similar German bunds widened to a record yesterday. 

US – Manufacturing activity in the Empire state improved yesterday, trouncing estimates. 

• The index climbed to 17.09 from 6.56 in April and comfortably ahead of forecasts for 9.0

• The year on year consumer price index came in inline with expectations at 2.3%. 

• Month on month prices were flat. 

• Advanced retail sales figures came in, inline with expectations at 0.1% in April. The figure declined from 0.8% in March. 

• Retail sales excluding autos in the US failed to hit the 0.2% increase forecast coming in at 0.1%

• Consumer confidence in the US remains depressed. The jobs market has softened of late and the recovery in the housing market that is required to really lift confidence remains a long way off.

• That having been said, figures released yesterday stated that confidence amongst US homebuilders jumped more than forecast in May reaching a 5 year high. 

• The National Association of Homebuilders/Wells Fargo index of builder confidence rose to 29 in May – the highest level since May 2007.  

• Mortgage application figures for early May will be released later today along with housing start figures. 

• The big data release of the day will be industrial production figures for April at 15.00. Forecasts indicate growth of 0.6% in April. 

China – Domestic media outlets broke the story today that China’s four largest banks have reported almost no new lending since the start of May. 

• Additionally, concerns have increased today over growth after figures showed that growth in electricity generation was only marginal last month. 

• Power generation increased by 0.7% in April after a 7.2% increase in March. 

Japan – GDP figures for Q1 will be released tomorrow. 

• Forecasts are predicting an increase of 3.5% compared with a contraction of 0.7% in Q4 2011. 

• The positive figure is expected to be the peak for the year and will likely tail off through out the year. 

• The yen has weakened today, at the market looks for more action from the Bank of Japan in extending accommodative policies. 

• Machine orders fell – year on year by 1.1% in March. 

• Month on month they declined by 2.8%. 

UK – Jobless claims and unemployment figures released this morning surprised – Massively!

• Official estimates had predicted an increase in the number of people seeking unemployment allowance climbing to a 30 month high. 

• The figures released today showed that jobless claims dropped by 13,700. 

• This provided a kick for the unemployment rate pushing it down to 8.2% 

• Pressure continues to build on the Bank of England for more QE as the Euro crisis continues to stumble along. 

South Africa – As a result of the continuing problems in Europe, the country’s trade deficit will continue to widen whereas the trade gap with Asia may narrow - according to Moody’s. 

Africa – Moody’s have forecast that sub-Saharan Africa will probably expand 5% - 6% a year over the next 5 years. Additionally FDI in the region will continue to increase proportionally. 

Commodity News 

Precious:

Gold US$1,532/oz vs US$1,555/oz yesterday – Gold is off for a 4th consecutive day now on the back of Euro zone crisis.

• India set the benchmark price for imported gold at US$507 per 10g (US$1,577/oz), the Finance Ministry said.

• Gold is down 8.7% since Mar and is set to record the biggest quarterly loss since 2004.

• Prices increased 6.7% in Q1 amid speculation the Fed might embark on a new round of quantitative easing.

• Filings to the US Securities and Exchange Commission suggest Soros and Mindich’s Eton Park added to their holdings in the SPDR Gold Trust in Q1 while Paulson kept its investment at 17.3m shares.

• SPDR gold trust holdings remained at 1,277t (41.060moz) value US$63.872bn. 

Platinum US$1,424/oz vs US$1,443/oz yesterday

• Major Japanese trading houses are forecasting surging demand for PGMs as stricter rules on auto pollutants and rising car sales should lead to a rise in autocatlysts production.

• Itochu, the 4th largest trading company in Japan, said Platinum used in catalytic converters in diesel engines will increase 50-90% by 2020 from 3.22moz in 2010.

• Demand for Platinum will exceed supply from 2017 and market will slip into big supply shortage in 2020 on strong demand from automakers.

Palladium US$592/oz vs US$597/oz yesterday

Silver US$27.33/oz vs US$28.20/oz yesterday

Rhodium US$1,335/oz vs US$1,390/oz yesterday

Base metals:

Copper US$ 7,643/t vs US$7,835/t yesterday – Prices are driven by the news that Greece failed to form a new government and are set to hold another round of elections exacerbating worries the nation may not stick with austerity plans and quit the Euro zone. 

• Copper held in Chinese bonded warehouses dropped to 550,000-570,000t from 640,000-650,000t at the end of Apr, Goldmand Sachs estimates suggest.

• Codelco expects prices to remain at current levels this year.

Aluminium US$ 2,014/t vs US$2,027/t yesterday

Nickel US$ 16,785/t vs US$16,962/t yesterday

• Japan, the third world’s biggest producer of refined nickel, may seek new sources of supply or cut output after Indonesia banned exports of nickel ore in May with an exception that plan to build local refining facilities and that have to  pay 20% tax of exported ore for now.

• More ore is expected to be sourcesd from the Philippines and New Caledonia.

• Japan imported 3.65mt of ore in 2011 with Indonesia supplying 53% of the total, followed by New Caledonia with 27% and the Philippines with 19%.

• Nickel prices are down 9.9% so far this year following a 24% decline in 2011 amid weakening demand in China and uncertainty in the Euro zone.

• While ban and 20% tax on shipped ore from Indonesia may temporarily help prices, large Chinese stockpiles are expected to limit short-term volatility, the China International Capital said.

• Chinese nickel ore imports surged 73% yoy to 3.67mt in Mar ahead of the proposed Indonesian ban.

Zinc US$ 1,907/t vs US$1,925/t yesterday

Lead US$ 1,990/t vs US$2,038/t yesterday

Tin US$ 19,620/t vs US$20,150/t yesterday

Energy:

Oil US$110.04/bbl vs US$110.57bbl yesterday- Oil declines reflecting concerns over the Euro and Greeks possible collapse coupled with U.S. stockpiles rising.

• Brent for June settlement expires today, the more actively trading July contract is at US$109.87 

• WTI crude was  at US$92.16bbl this morning  with US Crude at US$92.51/bbl 

• The reversal of the Seaway pipeline tomorrow should ease partially the glut keeping WTI below brent but is unlikely to make significant ground due to a heavy refinery maintenance.    

• EIA crude oil stock news will be released today, expected to show an increase of 1.8 million barrels. 

• Prices could dip toward US$105bbl next week as we edge closer toward nuclear power talks with Iran scheduled for 23rd May in Baghdad. 

• Iran’s stance is still that it won’t step down its nuclear programme from enriching uranium to 20% 

• A political analyst in Tehran has said that “Insisting on a halt to enrichment is a deal breaker. It’s Iran’s red line.” 

Natural Gas US$2.578/btu vs US$2.596btu yesterday- 

Uranium US$51.60/lbs vs US$51.50/lbs yesterday- 

• UX consulting weekly spot as of 7th May 2012 was at US$52.00/lb (+0.25) 

Coal $94.80/t Richards Bay, Newcastle $98.40/t, Rotterdam $90.65/t

Other:

Iron ore – BHP revised their US$80bn spending programme over the next 5 years amid falling commodity prices.

• The company still forecasts Chinese crude steel production to reach 1.1bn tons per annum by 2025; whereas, seaborne iron-ore demand will fall to 650mtpa from 800mtpa reached in the last 10 years.

• BHP will move forwards with projects that meet the following criteria: low-cost, able to leverage existing development, close and fast to market and located in a competitive and stable fiscal jurisdiction. 

Company News 

Rio Tinto (LON:RIO) to ask shareholders to approve a name change for Ivanhoe Mines 

• Rio Tinto intends to rename the company Turquoise Hill Resources (

• Oyu Tolgoi translates directly into Turquoise Hill

• Rio Tinto never bothered to change its name to Red River so why should the company ask for Oyu Tolgoi to change to equivalent Turquoise Hill

Ferrex Plc (LON:FRX) – Scoping Study at Malelane Iron Ore Project

• Ferrex has reported positive economics with an IRR of 39% and NPV of US$513m from a scoping study on their iron ore project in South Africa. 

• The scoping study projected a 3 Mtpa operation over a 16.6 year life based on a JORC inferred resource of 154 Mt at 35.17% Fe. 

• Capex is projected at US$297m and opex at US$59/t FOB. 

• The scoping study is based on using a third party mining contractor with the bulk of capex 51% to be used for the plant. 

• The project does not require much of a spend on infrastructure as there is a rail siding 6 km away from the process and the iron ore concentrate is expected to be hauled by train to Maputo port in Mozambique 170 km away from the Malelane project. 

• 44% of the operating cost at US$59/t FOB is related to logistics costs with opex/t of $14.46 for mining cost and $25.74/t of processing cost. 

• The operation would produce a magnetic product at the initial stage of processing which would need to be upgraded due to its high silica content. 

• The company have not modelled the DSO potential at the mine which could provide a couple of years of initial production. 

• The company plan to proceed to PFS which is targeted for completion in late 2012. 

Conclusion: While this is a scoping study stage, the parameters of this project are promising. The existing infrastructure enables product to get to market and makes capex to get the project off the ground more affordable. Opex excluding transport at $40/t is realistic with management hoping to get these down as the project progresses. We like the Ferrex management team and this is a project well worth following.

Namakwa Diamonds (LON:NAD)– Trading Update

• Namakwa Diamonds announces sales achieved from the Kao Mine in Lesotho. 

• Prices achieved were 17% above expectation at an average selling price of US$395/ct for 16,388 carats with an average diamond size of 0.36 carats. 

• The larger stones achieved some high prices with the largest diamond 38 carats achieving US$6,668/ct and a 11 carats selling of US$15,020/carat. 

• As at 13 May 2012 the mine had produced 61,977 carats from 600,110 tonnes processed at an average grade of 10.33 cpht. 

• The processing plant is running at 250 tph producing 635 carats per day. 

• The company has changed the plant configuration and removed a 300 tph scrubber from the circuit and has been processing predominantly hardrock kimberlite. 

• Running the plant in this way has reduced process water usage by 40%. 

• Water could act as a constraint to plant production beyond July 2012 as the dam which provides water for the process plant is below capacity. 

• The company is looking at alternative sources of water such as building a pipeline directly from where the Kao and Malibamotso rivers meet. 

• The capital cost of this would be US$1.75m and subject to receiving the necessary water permits construction should be completed by July 2012. 

• Without sufficient water supply the mine will not be able to operate at a rate in excess of 100 tph – 40% of the current rate or may not be able to run at all. 

Conclusion: Diamond prices seem to be still strong with large diamonds particularly attracting good prices. The company is facing some operational challenges in terms of water shortage which could potentially impair operations significantly highlighting the challenges of operating in this terrain.

Westminster Group (LON:WSG) said the new academy opened in central England by its subsidiary Longmoor offers ‘tremendous potential’ for the expansion of its training services.

Longmoor, which is the close protection (CP) and risk assessment division of Westminster, has opened the academy in response to the increasing demand for its CP courses.

The new academy will enable it to further expand the range and scope of its courses, both residential and non-residential.

“I am delighted to be announcing the opening of the Longmoor Training Academy which we believe is the best training facility of its type in the country and offers tremendous potential for the expansion of Longmoor's training services,” said chief executive of Westminster Peter Fowler.

“The market in personal protection has grown significantly with the much publicised increase in kidnap, hostage taking, ransom demand and targeted theft of wealthy and high profile individuals.”

The group added that the Longmoor Security Industry Authority (SIA) accredited course provides enhanced career options to military and police veterans as they cannot work within the UK private security industry without such accreditation.

In addition, Westminster is receiving enquiries for its courses from its governmental clients.

According to the group, the unrestricted access to the facilities will result in significant operational efficiencies with a wider range of courses offered at better potential profit margins.

The academy has been secured on a leasehold basis of an initial 12 month term with the option to extend for a further four years.

Range Resources (LON:RRL, ASX:RRS) is “extremely” pleased with the progress it is making in Texas and Trinidad, while awaiting the spudding of the Shabeel North well in Puntland following Shabeel-1.

In Texas, the Smith No.2 well was recently placed into production, while the Albrecht No.1 is unloading fluid following fracture stimulation and has already produced one million cubic feet of gas and 150 barrels of oil, which was in line with expectations.

With these two wells now online, around 60 percent of Range’s North Chapman Ranch reserves can now be classified as proved and 80 percent as proved and probable.

The company said it was pleased with the results and will now work on monetising the North Chapman Ranch interests.

“Range is fully funded with respect to all its operations which are progressing extremely well,” said executive director of Range Peter Landau.

“Clearly there will be short term frustration with our current share price and world markets but nothing has changed with regards to our development program for 2012 with the added bonus of the landmark results to date of the Shabeel-1 well in Puntland and the spudding of the second Shabeel North well shortly.”

In the East Texas Cotton Valley interest in Texas, Range and its joint venture partners have started fracture stimulation operations on the Ross 3H well to increase production.

The company also updated investors on the development programme on its Morne Diablo field in Trinidad, where the three drilling rigs are now progressing on schedule with the fourth rig due to be added next month.

Eight future well sites have been prepared with expectations to extend the producing trent to the east of the existing field.

Also in Trinidad, work continues to prepare the rig No.8 for June spudding of the Middle and Lower Cruse formations, which Range expects to add significant production and reserves to Range’s operations.

Based on drilling results to date as well as planned development drilling throughout the Trinidad acreage, Range expects to certify additional reserves in 2012 along with steady progress in production and cash flow.

Beowulf Mining (LON:BEM) is set to resume drilling on its Kallak north iron ore project in Sweden after the local mining inspector approved its 2012 programme.

Drilling at Kallak was suspended in December after the programme was found not to have been filed with the mining inspectorate.

Objections were also raised by the local Saami community, who said it could interfere with reindeer herding.

The mining inspector’s approval now stipulates Beowulf must give the Saami community at least ten days notice prior to drilling operations.

The company must also set the location of the drill rigs, intended equipment utilisation, staffing numbers, envisaged routes and estimated duration. The Saami community’s consent is also required for exploration during November and December 2012.

Beowulf added that as the mining inspector's decision is effective immediately it intends to issue a formal notice to the Saami community to recommence drilling Kallak north towards the end of May.

The company added it also intends to file a new drilling plan for Kallak south.

Clive Sinclair-Poulton, executive chairman said: "We welcome the Mining Inspector's approval of our Kallak nr1 work plan and look forward to recommencing drilling operations on the northern part of Kallak towards the end of this month, where we initially intend deploying two drill rigs.”

African Minerals Ltd (LON:AMI) confirms that, following receipt of relevant regulatory approvals, China Railway Materials Company Limited ("CRM") has completed its subscription for $50M of the Company's 8.5% convertible bonds due 2017. These Bonds have been issued today, and are on the same terms as the $350M of convertible bonds issued on 10 February 2012.

Ferrex Plc (LON:FRX) announced the results from an initial Scoping Study on its Malelane Iron Ore Project in the Mpumalanga Province of South Africa. The scoping study focuses on the development of a 3Mt per annum operation over a 16.6 year life of mine and shows an IRR of 39% with an NPV of US$513 million (pre-tax) at a discount rate of 10%. Operating costs are approximately US$59/t FOB and capital expenditure is estimated to be US$297M.

Ferrum Crescent Limited (LON:FCR) announced the completion of the mineral resource estimate update for the Moonlight iron ore deposit in South Africa.The update incorporates the results of a further 11 holes totalling 990m of diamond core drilling and 13 holes totalling 1,600m of RC drilling. The updated mineral resource is now estimated to total 307 Mt at 26.9% Fe, 50.3% Si, and 4.2% Al2O3, of which 172.1 Mt at 25.3% Fe are in the Inferred category.

Minera IRL Limited (LON:MIRL) announced commencement of the permitting process for the Don Nicolas Project located in the Santa Cruz Province of Argentina. The Environmental Impact Assessment (EIA) has been completed and presented to the Secretary of Mining. Permitting is expected to take approximately 6 months.

Namakwa Diamonds Limited (LON:NAD) announced that it has closed its sale of diamonds from the Kao kimberlite mine in Lesotho. The sale was conducted in Antwerp and achieved prices 17% higher than expectation. 16,388 carats were sold at an average selling price of US$395/ct, with an average diamond size of 0.36cts. The largest diamond sold was 38cts at US$6,668/ct, with an 11ct diamond selling for US$15,020/ct and four diamonds with sizes varying between 6 and 14 carats selling for an average of US$7,100/ct. The sale realised revenues of c.US$6.47 million.

The Company also announced that capacity levels in the mine's freshwater dam are currently significantly lower than anticipated for the time of year, and that without an alternative source of process water, it is likely that there would be insufficient flow to allow the mine to operate at a rate in excess of 100tph (if at all). To address such alternative source requirements, the Company has initiated the installation of a pipeline from the confluence of the Kao and the Malibamotso rivers at a capital cost of c.US$1.75M. 

Serabi Gold  (LON:SRB) published its unaudited financial results for the three month period ending 31 March 2012. The Company recorded an operational loss for the quarter of US$1.31 M due to exploration activities, and has cash and cash equivalents of US$3.4 M.

Horizonte Minerals (LON:HZM) has released its 1Q'12 financial results. During the period the NI 43-101 compliant resource update released for the Company's flagship Araguaia nickel laterite project in Brazil gave an Indicated Resource of 39.3Mt @ 1.39% nickel and an Inferred Resource of 60.9Mt @1.22% Ni. High grade zones defined within the Indicated category at a 1.20% Ni cut-off grade account for 24.2Mt @1.6% Ni. The first phase metallurgical test work completed at Araguaia gave 93% nickel extraction in atmospheric tank leach tests. The Company expects the Preliminary Economic Assessment for Araguaia to be released at the end of the current quarter. The Company ended the quarter with £4.87M in cash having spent £5.9M in the past year. We therefore expect the Company to look at additional financing options before the end of the year.

Premier Gold Resources (LON:PGR) has released the sampling results for the 2011 exploration work carried out at the Company's Cholokkaindy licence in Kyrgyzstan. Cholokkaindy is an early stage gold exploration project where four target prospects have been identified, of which Talbaital is the most advanced. The Company believe they have evidence of multiple mineralised structural zones and the latest results, although not as good as previous results, do extend the target area to 1.2km N-S, with a width in the central area of 400m. Trenching produced results of 5m @1.9 g/t gold, 3m @ 2.5 g/t, 3.4m @ 2.07g/t and 5m @ 0.24g/t. For the current season, exploration will also include the Jarkonush prospect, 1.5km to the SE of Talbaital.

African Barrick Gold (UNDER REVIEW) (LON:ABG) has agreed with the Tanzanian Government to pay an additional "voluntary" 1% royalty, in addition to the 3% rate stipulated in the Mineral Development Agreements ABG has with the government. The additional royalty is being made in light of the current gold price environment and the fact that over the past two years ABG has been "delivering strong financial returns" and the company feel that "it is important that our broader stakeholder base see the benefit of that". Over the past two years the ABG share price has fallen 45% from £6 per share to the current £3.28 so we are slightly bewildered to whom ABG has been delivering these strong financial returns over the past two years.

Connemara Mining Company (LON:CON) has completed a magnetic, very low frequency (VLF) and radiometric airborne survey over the block of five licences held by the Company in Wicklow/Wexford, Ireland. The work is part of an ongoing joint venture between Connemara Mining and Hendrick Resources of Canada whereby Hendrick will earn 75% interest in the licences by spending €1M. The survey is being processed by Terraquest in Canada and initial analysis carried out on the raw data by Hendrick in Canada indicates the presence of previously undetected blind targets. Final results are due within six weeks.

New World Resources (LON:NWR) released its 1Q'12 results with coal production of 2.4Mt down 7%, and external sales of 2.3Mt down 13%, despite a 10% rise in higher value coking coal to 1.3Mt. Coke production was 175kt with external sales of 155kt. Revenues were down 10% to €347m, with realised coking coal prices down 8% and thermal prices up 12%. EBITDA down 34% to €54m, with mining costs up 8% to €97/t although net profit was up 80% to €6m. Net debt decreased slightly to €385m down 2% since the end of 2011. Revenues should improve as NWR sees the benefit of its improving coal mix. Guidance for the full year remains unchanged with coal production between 10.8Mt-11Mt and 700kt of coke. External sales of coal are projected to reach between 10.25Mt and 10.5Mt of coal, split approximately 52 per cent thermal coal and 48% coking coal and the Company expects coke sales of 600kt. In terms of market outlook, NWR stated that steel mills in its markets are currently running at utilisation rates of between 80% and 90% with steel production up 7% in the quarter. Car production, one of NWR's key end markets is maintaining its momentum in the CEE region. Vehicle production in the Czech Republic alone increased by 14% during the quarter.

Continental Coal (LON:COOL) has issued an update on its South African coal operations and on the development work at Penumbra for April. At Vlakvarkfontein Coal Mine, production was up 6% MoM to 112,281t, with domestic thermal sales rising slightly to 93,180t. Unaudited net profit after tax YTD was ZAR33.6M, 50% above budget of ZAR22.4M. At Ferreira, production was 25% above budget at 55,263t ROM and 4% above the average for the previous quarter. Yields have also increased to 62.3% from 60.4% with sales of export thermal coal 40,864t. Unaudited revenues were 15% below budget at ZAR31.1M with an EBITDA of ZAR1.2M, 50% below the monthly average for the March Q. However, unaudited net profit after tax YTD is ZAR37.1M, 52% above the budget ZAR24.4M. Progress continues to be made at the Penumbra Coal Mine have continued during the month with the primary focus continuing to be the advance of the twin declines. Murray & Roberts continued the twin decline development, with the declines advanced 58m during the month to a combined total length of 135m. The conveyor road has advanced down 79m and the travelling road down 56m. During May 2012, EDF trading, the key off-take partner for Penumbra visited the site.

Oil & Gas News

Tullow Oil (LON:TLW) - IMS; On track to deliver targeted net production of 78- 86 Mboped: The Company has made significant progress across its main assets. The successful completion of $2.9 billion Uganda asset farm down to CNOOC and Total, commencement of Jubilee Phase 1A development has been the key highlight. In a continuous effort to grow at the drill bit, the Company has lined-up a high impact exploration and appraisal campaign on the West African and South American margins of the Equatorial Atlantic Basin including wells in French Guiana, Guyana, Sierra Leone, Côte d'Ivoire. Overall a very positive update; the Company is making good progress across its blocks. We expect some investors to respond positively to this release.

Tethys Petroleum (LON:TPL) - Kazakhstan Oil Resource Upgrade: Today's announcement of significant upgrade in mean unrisked recoverable prospective resources to 1.17 billion bbl of oil bodes well for the share price. The next appraisal/exploration well, AKD07, which is planned to be spud in late 1H-2012, attains more importance as today's resource upgrade was based on the 2D and 3D seismic data. We will be waiting for AKD07 well results as positive data will further validate resources upgrade, which will be a big positive for the valuation. Key Points:

• Mean unrisked recoverable prospective resources of 1.17bn bbl.

• Upgrade due to additional 2D and 3D seismic acquisition and interpretation as well as drilling data

• Chance of Success increased due to drilling success in the area.

• Dyna exploration prospect (128 million barrels mean unrisked recoverable prospective resources) to be tested with the AKD07 well.

• In addition to these oil resources there is additional associated mean unrisked gas prospective resources of 231 BCF and also separate non-associated gas prospective gas resources of 374 BCF

Ophir Energy (LON:OPHR) - Ready to take off: Today's announcement will have a positive impact on the valuation and bodes well for the share price. The potential of the Mzia-1 well to flow at commercial rates, coupled with the prospectivity of the Rovuma Delta, means that all the ingredients for near-term growth are now in place. In the news:

• New discovery with the Mzia-1 well offshore Tanzania with a mean in place resource of 3.5TCF

• Well intersected a 178m gas bearing column and 55m of net pay in the Upper Cretaceous

• Mzia-1 has opened the Rovuma Delta Upper Cretaceous intra slope play, calibrated an inventory of comparable seismic anomalies at this level, and verified both the presence of reservoirs and hydrocarbons

• Mzia was the fifth well to be drilled by the Ophir-BG joint venture offshore Tanzania

• Next target is the Papa-1 well in Block 3, a test of the equivalent Upper Cretaceous section in the Rufiji Delta (3.1TCF mean estimated prospective resource)

• Papa-1 well results expected in July 2012

• 3D seismic acquisition programme nearing completion

Gold Oil (LON:GOO) - Further Progress: Following last week's positive update in Peru, today's announcement that the Company has spudded the La Vega Este-1 well in Colombia is welcome, and with a 34% chance of finding oil, investors can look forward to further news as management look to unlock value within the Putumayo Basin and its wider assets. In the news:

• La Vega Este-1 well spudded

• Will be drilled to a depth of 11,485 feet (MD) and will target the Villeta and Caballos formations

• 34% CoS and could flow at initial rates of about 1,500 bopd

Soco International (LON:SIA) -Interim Management Statement: The Te Giac Trang field remains on track to commence production from the second platform in early August. It lends confidence to the Company's reiteration of meeting ca. 16 Mboepd production guidance for the full year. Overall, a positive update. In this news:

• Production for the first four months of 2012 averaged 11,690 BOEPD net to the Company's working interest, a 358% increase compared with the same period in 2011.

• Entitlements production equalled 13,924 BOEPD and is on track to meet the ca. 16,000 BOEPD guidance for the full year.

• Net cash as at 15 May 2012 equalled $181.8 million (31 December 2011: $113.5 million)

• The Te Giac Trang Field remains on track for production from the second platform commencing in late July/early August, increasing field production to approximately 55,000 barrels of oil per day

Britain’s largest bakery chain reported a dip in like-for-like sales of 1.8 per cent in the 19 weeks to 12 May.

Total sales, however, grew 4.3 per cent, boosted by the launch of 25 new stores.

Chairman Derek Netherton said: “The trading environment for all retailers has remained extremely challenging, and high street footfall has remained relatively weak.”

Netherton also launched an attack on George Osborne’s so-called ‘Pasty Tax’, which he claimed is “unworkable”.

The chancellor announced plans at the Budget in March to extend VAT sales tax to freshly baked savoury products that are sold warm.

But Netherton believes that baked savouries that are sold warm but allowed to cool should be exempt from the tax.

Savoury sales account for more than a third of turnover and the outcome of the tax could have a serious impact on sales and profit, he added.

Netherton was cautious on the company’s outlook given the pressures on consumers’ disposable incomes as a result of high fuel, energy and food costs.

He expects the consumer environment will continue to be tough-going, but hopes that major events in the coming months, including the Queen’s Diamond Jubilee, the Olympics and Euro 2012, will help bolster sales.

Shares reeled on the back of the statement, falling over 20 pence, or 4 per cent, to 475 pence.

*REGISTER YOR ATTENDANCE HERE*

ZincOx Resources has very much delivered on the plan set out by chairman Andrew Woollett when he last joined us.

The zinc recycling specialist has a 10-year off-take agreement with Korea Zinc for its product from the first plant.

Initial testing of the operation, which has now received a start-up permit, delivered very promising results with zinc recovery in the range 87 per cent to 96 per cent.

Woollett said recently: "We are delighted with the results from this first operation which prove that the process works in line with our expectations. 

"We are looking forward to optimising the operating conditions and ramping up to full production over the next few months and at the same time preparing to press ahead with our expansion plans both in Korea and elsewhere".

Caledonia Mining’s first quarter results announced earlier this month charted a period of transition financially and operationally for the gold miner.

And crucially it also marked the implementation of the first phase of a landmark indigenization deal brokered with the Zimbabwe authorities.

Operationally it was a mixed picture. Blanket’s production was down on the previous quarter at 9,164 ounces due to scheduled maintenance on the Number 4 Shaft.

In April, however, it bounced back to 3,722 ounces, or an annualized equivalent rate of 44,664 ounces. Caledonia is targeting a 40,000 ounce annual production rate.

The lower production and certain “anticipated non-recurring costs” meant the cash cost increased to US$648 an ounce from US$521 in the preceding quarter.

However, Caledonia weighed in with a net profit for the quarter of US$7.11 million, up from US$1.36 million in the previous quarter and US$1.89 million at the same point last year.

It now has cash and equivalents of US$16.3 million, up from US$2.2 million a year ago. 

Next on our list is the mining investment company ECR Minerals, which owns the El Abra prospect in La Rioja Province, Argentina

It recently completed its 1,000 metre diamond drilling programme and is awaiting assay results.

However last month ECR confirmed that surface high-grade gold mineralisation at the prospect extends to depth after receiving assay results from seven of the 12 holes.

Chairman Patrick Harford said at the time: “It is apparent that further drilling to follow on from this first programme is merited in order to more fully appraise the economic potential of El Abra in the context of ECR's high grade, low tonnage production strategy.” 

Finally, we will be joined by ASX-listed explorer New Guinea Energy, owner of petroleum licences in Papua New Guinea.

Mitsubishi Corporation recently farmed into two of its licences, which is obviously exciting news. 

It also gave an objective benchmark valuation for NGE stake in the acreage which is well above the company’s current market cap

“The valuations help for us to demonstrate that this is really the value of the licences even if our market cap isn’t representing that. It helps our ability to raise funds,” chief executive Grant Worner said.

The company told investors today that the environmental impact assessment (EIA) has now been completed and presented to the secretary of mining of the Santa Cruz province of Argentina, marking the start of the permitting process.

According to the company, permitting, which is expected to take six months, should proceed expeditiously given the “outstanding” support from the authorities in Santa Cruz.

“The completion of the EIA and commencement of permitting marks another significant milestone in the development of the Don Nicolas Project in Patagonia,” said executive chairman of Minera Courtney Chamberlain.

“The future Don Nicolas Mine promises to be an attractive investment with considerable upside potential in a number of areas.

“We remain confident that we will have our first gold pour from Don Nicolas in late 2013.”

Don Nicolas will be a 350,000 tonne per year open pit mining operation producing 52,400 ounces of gold and 56,000 ounces of silver each year. 

It will cost around US$55 million to build and operating costs are estimated at US$528 an ounce, giving a margin of more than US$1,000 an ounce at current gold prices.

The mine is currently estimated to have a relatively short 3.6 year mine life but the company expects future exploration to extend this significantly.

This week: Angel spreads its wings, a healthy announcement for Fitbug and Corero secures new business wins A very tough week in the financial markets with the FTSE 100 closing the week almost 100 points lower at 5,560 and the AIM All Share closing 25 points lower at 740 points. The most junior market in London, PLUS Markets, this week announced that it has now ended the formal sale process which was announced in February and that it intends to start a process of orderly closure. The Greek crisis continued to worsen with the political uncertainty there exacerbating the continuing difficulties (also heightening questions over whether Greece will leave the Euro), whilst US retail sales are said to have faced a slowdown in April, rising at 0.1 per cent compared to 0.7 per cent in March. The week ahead sees BoE economic forecasts and outlook, together with trade, unemployment and average earnings data from the Office for National Statistics and a BoE Inflation Report.

ABH Acquisition and Contract, ATC Preliminary Results, AVN Interim Management Statement, CNS Business Wins, CRG Interim Management Statement, DDD TriDef 3D sales top 1m, EDEN Admission to trading to AIM, ENEG Operational update, FITB Appointed partner to Healthrageous, Inc., GOLDPLAT Progress update, JDG placing, LID Technologies endorsed, MSYS New Agreement, OMP Acquisition and Comment on plus, OXB Announced Clinical data, PYM Update on preclinical study, PMG ended formal sale process, PRX FDA Positive, PVR Barryroe update, SID Contract Wins, TRS Interim Management Statement, THAL RSI Response, VAL Potent Approval, VIY Business Update, XEN Appointment of VP and ZCGP on PLUS.

Angel Biotechnology Holdings (LON:ABH)*

Angel Biotechnology this week made two announcements; an acquisition and a first contract since the acquisition was made. Angel acquired the assets of an established biomaterial and collagen manufacturing business, through its newly formed and wholly owned subsidiary, Angel Biomedical Ltd (LON:ABL). ABL has been formed to enable the Group to become an active service provider and manufacturer of collagen products in the medical device, in-vitro diagnostic and regenerative medicine markets. The formation of this subsidiary also heralds a significant expansion of Angel's capabilities by supplying specialised high value products and services that will allow access to new clients, whilst synergising with Angel's existing GMP bio-manufacturing business. The assets of the business have been acquired under favourable terms for a total cash consideration of £200,000. ABL will take ownership of the manufacturing plant, equipment and raw material stock based in premises in Glasgow. This, as well as a separate five year property lease on the premises which has also been negotiated on advantageous terms. ABL, coupled with Angel's expertise and knowledge of the stem cell market, will also seek to identify opportunities to develop its own products. The opportunities within ABL's target market can be quicker to realise than Angel's core business and it is therefore anticipated that ABL will make a positive contribution to the Group's earnings withinthe short to medium term. The Group is already in discussions with a number of companies who recognise the potential in ABL's extended value offering and looks forward to communicating these in due course. Dr Paul Harper, Executive Chairman, Angel Biotechnology Holdings, said: "The formation of ABL provides significant strategic advantages to the Group, and the distinctive competencies offered will provide a one-stop shop for companies in the regenerative medicine space....ABL will also provide access to a range of new markets by offering customers the means by which to convert advanced biologics and cell therapies currently being manufactured by Angel into formulated, finished products such as medical devices and in vitro diagnostics." Separately, Angel today announced that this new subsidiary, ABL, has signed an agreement with Cardium Therapeutics (NYSE Amex: CXM). The contract value will be in excess of £400,000 over the initial twelve month period, and will cover the manufacture of formulated collagen for Cardium’s Excellagen® product, which has recently been cleared for marketing by the FDA. Excellagen is a professional-use high molecular weight fibrillar bovine Type I topical gel (2.6 per cent) specifically engineered as an adjunct to debridement for the management of diabetic foot ulcers and other dermal wounds. In addition to the manufacturing of Excellagen’s formulated collagen, Angel Biomedical will assist Cardium to facilitate filing for a CE Mark for Excellagen for marketing and sale in the European Union and in other countries recognising CE Mark approval. Additionally, Angel Biomedical will assist Cardium in establishing its own Device Master File with the FDA’s Center for Devices and Radiological Health covering the process for manufacturing the Company’s Excellagen formulated fibrillar collagen gel.

Atlantic Coal (LON:ATC)

Atlantic Coal, an open cast coal production and processing company, announced unaudited preliminary results for the year ended 31 December 2011 in which it saw an increase in revenue to $13,991,971 (2010: $10,720,103) and a reduced pretax loss of $3.15m (2010: loss of $5.09m). Significant episodes during the period include the purchase of a Komatsu PC2000 Hydraulic Excavator and a Reichdrill blasthole drill rig and shares being admitted to trading on the OTCQX Market International platform of the Pink Sheets LLC in New York to broaden the investor base.

Production and sales at Stockton increased during 2011 to 207,005 tons of run-of mine coal mined and sales of 106,403 tons were reached (2010: 207,873 and 97,342 respectively). Post period end, in January 2012, the Company announced it had entered into a lease option agreement with Pennsylvania based Reading Anthracite Company which holds a permitted 410 acre anthracite mining property- the acquisition would see a consideration of c. $6m in cash and shares being paid to Reading Anthracite Company along with the grant of $3.0m of warrants in Atlantic at 0.75 pence per share. An additional option agreement has been entered into for further anthracite mining assets in Pennsylvania which has an exercise price of US$35m for the period ending on 31 October 2012.

Avanti Communications (LON:AVN )

The broadband satellite provider provided an interim management statement for the four months to 30th April 2012 stating that revenue is currently in-line with house broker estimates for the financial year to 30 June 2012. £42.3m of order backlog has been added taking the Company to £213m in total, with a pipeline of potential sales standing at £529m. This excludes £170m of options on HYLAS 2, which remains on target for a launch in the 30-day window from 30 June 2012 having successfully completed one of its last key technical milestones - thermal vacuum testing - during the period. 

Corero Network Security (LON:CNS)

Corero Network Security, the network security and business software provider, has announced a number of key business wins and the appointment of Ashley Stephenson as Executive Vice President. CNS has secured twenty two customers during the four months to 30 April 2012 with sales order intake up 25 per cent on the comparative period in 2011. CNS is also seeing an increase in orders and opportunities for its DDoS Defence System (DDS) launched in Q4 2011, as awareness and the number of DDoS attacks increases. New customer wins include material orders from Agarik (a leading French web hosting and managed service provider). In addition, CNS has received material orders from several existing customers including the world’s leading online gaming company, the global leader in gases for industry,health and the environment, a leader in online payment processing with offices in the United States, Canada and Europe, and Moneysupermarket.com. CNS has also appointed veteran IT industry expert and entrepreneur, Ashley Stephenson, as Executive Vice President of the Network Security division with responsibility for CNS’s product and solutions strategy. Mr Stephenson has co-founded or led several IT companies including Reva Systems (acquired by ODIN) and Xedia Corporation (acquired by Lucent).

Corin Group (LON:CRG 44.5p/£19.04m) 

Corin Group, a manufacturer and supplier of orthopaedic devices, published an Interim Management Statement for the period from 1 January 2012 to 10 May 2012. Corin has made a strong start to the 2012 financial year. For the four months ended 30 April, constant currency sales growth was 24 per cent. This strong growth was helped by the final phase of stocking orders to Mako in the US. Excluding these stocking orders, constant currency sales growth was 10 per cent. This growth continues to be led by sales of the Group’s new hip products. Knee sales, which have in recent years declined, were broadly flat in the period LARS sales have shown good growth in the UK, but have in aggregate declined on the back of weaker Australian sales. There has been double digit sales growth in the UK, US, Japanese and German and Austrian markets, with only the Australian business among Corin’s direct markets declining compared to the prior year. The order book for export markets is strong, and there has been no material change in the financial position of the group since 31 December 2011. Looking forward, initial implantations of the new Unity Knee have gone well and the product remains on track for commercial launch early in 2013. 

DDD Group (LON:DDD)

The 3D solutions company today announce that sales of TriDef®3D for PCs and TriDef 3D Mobile have each topped one million units. TriDef 3D is DDD’s solution for automatic 2D to 3D conversion of games, videos and photos on 3D PCs, TVs and mobile phones. Sony, Intel, LG, Samsung and HP are among the leading manufacturers that have licensed TriDef 3D for their PC products. Total shipments of TriDef 3D for PCs exceeded 1.3 million licenses as of March 31 2012. In mobile phones, LG uses the TriDef 3D Mobile Android™ app for 2D to 3D video conversion on its Optimus 3D range of handsets. As of March 31 2012, shipments of TriDef 3D Mobile have exceeded one million within the first nine months of launch. 

Eden Research (LON:EDEN) 

Eden Research announced the successful admission to trading on AIM on 11th May 2012 with the withdrawal from trading on PLUS. The market capitalisation of the Company at Admission is approximately c. £21.65m, based on the middle market price of 19.5p at the close of business on 10 May 2012. The Company has a number of patents and has a pipeline of products at differing stages of development targeting specific areas of the global agrochemicals industry and has invested in the region of £12m in development and now has modest revenues (2011: £91,000; 2010: £172,000) whilst the Company has concentrated on securing patent protection for its intellectual property, identifying suitable industrial partners and entering into licence agreements. Given the recent news from PLUS Markets Group PLC, Eden made a good move at the right time. 

Enegi Oil (LON:ENEG)

Enegi Oil, the independent oil & gas company focused on Canada and Ireland, has announced that the latest test results confirm that the connected oil in place associated with Garden Hill South is in excess of those stated in Enegi’s 2007 Competent Persons Report. McCaffrey Consulting Services Ltd., an independent consultant engaged by the Company, has advised that results from the last series of testing indicate that the Well is in contact with a larger than anticipated reservoir. Despite producing from the Well since commencement of a flow test on 3rd February 2012, there are no signs of pressure depletion in the reservoir. To accurately assess the reserves associated with Garden Hill South, signs of pressure depletion at the reservoir are required. Therefore, the Well will be flowed further to provide the required data. The management believes the latest results, the presence of a live petroleum system, and the size of the Green Point Shale justify further development activity in the Company’s acreage.

Fitbug (LON:FITB) 

Fitbug Holdings has signed a supply partnership agreement of three years with leading US digital health engagement and management company, Healthrageous, where Fitbug will supply Healthrageous customers with its proprietary activity tracking technology. Both businesses are now seeing strong and growing interest in connected health capability across the US health market. This supply partnership will better position both Fitbug and Healthrageous to play a bigger part in this growing market. Goldplat (LON:GDP 11.88p/£19.93m) Goldplat yesterday provided a positive operations update on its three main gold projects: the Kilimapesa Gold operating mine in Kenya; the Nyieme gold development project in Burkina Faso; and the Anumso gold exploration project in Ghana and its two gold recovery operations in South Africa and Ghana. Goldplat CEO Demetri Manolis said: “With the commencement of production of mining at Kilimapesa and gold recovery performing strongly in South Africa and ahead of management’s expectations in Ghana, we expect to easily exceed our production of 28,185 ounces gold last year. This is against a current market cap of circa £19 million. We were delighted to report our first gold pour and sales at our high grade quartz vein project at Kilimapesa earlier this month, and we look forward to continuing underground and surface development to bring the resource to in excess of circa 500,000 ounces of gold”. 

Judges Scientific (LON:JDG)

Aim listed company engaged in the design, manufacture and sale of scientific instruments, announced a £3m placing at a price of 600p per share. The Placing was almost three times subscribed, and net proceeds enable the Company to make further acquisitions, having financed the March acquisition of Global Digital Systems (GDS) entirely via debt (GDS was acquired for a cash consideration of £7.65m with an additional payment to be made to reflect the working capital available at completion in excess of the ongoing requirements of the business). Back in March,the Company announced results for the year ended December 31 2011 in which revenues increased by 15 per cent to £21m and pre-tax profits of £2.89m (2010:£16m) were achieved. 

LiDCO Group (LON:LID)

 The cardiovascular monitoring company this week announced that its technologies are highlighted in the latest NHS report, published on 8 May, on the adoption of Intraoperative Fluid Management Technologies. The report, which highlights LiDCO’s fluid management technology among others, informs all NHS organisations of the steps they need to take in order to start using or increase their use of these technologies. The report reiterates that full adoption across the NHS is forecast by NICE to benefit 837,000 patients and generate net financial savings of £400m per annum. Of the 800,000 patients a year in the UK who are applicable for such advanced monitoring, less than 10 per cent are currently monitored. This illustrates the potential size of the UK market and the very substantial opportunity available to LiDCO. 

Microsaic Systems (LON:MSYS)

Microsaic Systems last week announced the signing of a significant agreement to provide its miniature mass spectrometer – the Microsaic MiD –to an international supplier of laboratory equipment. Eric Yeatman, Chief Executive of Microsaic Systems, commented: “One of Microsaic’s key strategic aims is to grow sales of our innovative products as an OEM partner with leading international suppliers of scientific instruments in specified application areas of chemical separation and purification.” 

One Media Publishing Group (LON:OMPP)*

The listed consolidators and acquirers of music and video rights yesterday announced that it has acquired the rights to an audio catalogue and a deal to create new tracks for its growing library of popular music. The USD$33,000 deal willdeliver up to 3000 music tracks in the 'easy listening', 'instrumental' and 'TV & Film' music genres. Whilst some of the music library already exists, One Media will retain the additional right to select new tracks (not yet recorded) over the forthcoming 36 months. This allows One Media to keep its library populated with new tunes as required at a fixed price. One Media also today announced that following the announcement by PLUS Markets Group plc yesterday at 7am, the Board of One Media would like to reassure its shareholders that they have been reviewing their position on the PLUS markets for some time now. Following yesterday’s announcement, the Directors believe that additional advantages can be achieved through being listed on another market; notably in the areas of share liquidity, visibility of the business within its industry and greater investor interest. Michael Infante CEO/Chairman said: "We have always been committed to shareholder communication and the delivery of solid results, as evidenced by our recent communication only yesterday of yet another acquisition. We have made 19 acquisitions over the past 18 months and I am increasingly of the view that there would be advantages to remaining on a market, although we are undertaking a full review of all alternatives." One Media Publishing still intends to release its unaudited half yearly report on Monday 11th June 2012. 

Oxford Biomedica (LON:OXB)

xford BioMedica announced that data from its ocular programmes partnered with Sanofi (EURONEXT: SAN and NYSE: SNY) were presented at the 2012 Annual Meeting of the Association for Research in Vision and Ophthalmology (ARVO) in Florida (USA). Dr Stuart Naylor, Chief Scientific Officer of Oxford Biomedica, said: "The RetinoStat(R) Phase I study is the first US clinical study to directly administer a lentiviral vector-based treatment to patients, and we believe this is the first time that therapeutic protein expression has been directly demonstrated in the eye following the administration of a gene therapy.”

Phytopharm (LON:PYM)

Phytopharm announced that a study in an animal model of glaucoma was inconclusive. The study did not yield a valid result because of a failure to induce sufficient neuronal cell death in both treatment and control groups. The study was designed to evaluate the neuroprotective effects of treatment with Myogane(TM) in an established model of glaucoma. Mr Tim Sharpington, CEO, Phytopharm, said: "It is disappointing that this study did not produce a definitive result which would have given us further insight into the potential of Myogane(TM) in glaucoma. We will analyse the results from this study in consultation with our scientific advisors before deciding on the next steps for this programme. "The share price fell from 7.75p to 7.125p on the news.

PLUS Markets Group (LON:PMK)

PLUS Markets this week announced that it has now ended the formal sale process which was announced in February as it has been unable to agree any potential deal, adding that due to the ongoing operating costs of its business in the context of its regulatory status, the Company's cash balance has reached a level at which the Board has informed the FSA that it intends to start a process of orderly closure. Activities undertaken by the Group are to be wound down over the next six months in order to minimise market disruption and PLUS Markets will continue to explore all possible avenues including any offers for the Company's remaining assets.

Proximagen Group (LON:PRX)

Proximagen Group, whose focus is on the treatment of disorders of the central nervous system and inflammatory diseases, welcomed an announcement by Arena Pharmaceuticals, Inc. that the US FDA Endocrinologic and Metabolic Drugs Advisory Committee had voted in favour of the available data demonstrating that the potential benefits of Lorcaserin outweigh the potential risks when used long-term in a population of overweight and obese individuals. The committee voted 18-4 in favour of Lorcaserin, which is a 5-HT2c agonist intended for weight management, including weight loss and maintenance of weight loss, in patients who are obese or overweight and have at least one weight-related co-morbid condition. Proximagen owns the worldwide rights to PRX00933, an oral 5-HT2c agonist for treating obesity. In Phase II trials, PRX00933 showed a dose-dependent and statistically significant decrease in body weight that falls within FDA guidelines for this condition. PRX00933 has been shown to be safe and well tolerated and has been administered to approximately 400 patients. The Company will continue to evaluate the commercial opportunities that PRX00933 presents, whilst awaiting the final decision of the FDA on Lorcaserin which is due next month.

Providence Resources (LON:PVR)

Providence Resources, the Irish oil and gas exploration and production Company, has provided a technical update on the Barryroe oil discovery in the North Celtic Sea Basin. Providence operates Barryroe on behalf of its partner Lansdowne Oil and Gas plc. The area lies in around 100 metre water depth and is around 50 kms off the south coast of Ireland. Geokinetics, a US based seismic processing company, has carried out an evaluation of the seismic response of the main basal hydrocarbon bearing reservoir interval. This modelling has confirmed that the basal reservoir sandstone package has a defined seismic response which can be detected clearly within the inverted 3D seismic volume. A preliminary review of the inverted 3D seismic volume indicates that the reservoir sequence is widely developed in the Barryroe area. Detailed interpretation of the inverted seismic data has now commenced and will be used to better define the static oil in place estimates for the Barryroe accumulation. The results from this work are expected later this summer. 

Silverdell (LON:SID)

Silverdell, the Specialist Environmental Support Services group, has been awarded a number of contracts in May totalling £3.58m, including a contract in Canada for an International Specialist Material Company which will deliver £1.25m of revenues in the second half of the current financial year. This contract is expected to be an important step in Silverdell’s broader strategic initiative to penetrate a number of regulated international markets. Under the terms of the contract the Company will

carry out asbestos removal works as sole provider to a major decommissioning project. In addition, the Company has confirmed that the £0.5m of major rail infrastructure works in the South East, announced on 3 April 2012 is likely to be for a materially higher contract value and is now anticipated to form part of a larger framework contract to include up to 72 stations over the next 7 years. These contracts have boosted the Company’s order book to a record high of £133m as of 31 March 2012. 

Tarsus Group (LON:TRS)

The international business-to-business media group today published its Interim Management Statement for the 8th March to 14th May 2012. Trading for the period has been in line with the Board’s expectations and forward bookings for the year to end December 2012 now stand at 65 per cent of anticipated full year revenues, compared to 61 per cent at the same time in 2010.

Bookings are tracking 15 per cent ahead of last year (as adjusted for biennial events). Revenues are heavily weighted towards the second half of the year owing to the timing of exhibitions. The Group’s growth prospects have been transformed over the last 12 months. A number of lower growth businesses have been sold whilst the Group has made key acquisitions in China and Turkey. Tarsus has developed a high quality portfolio of international fast growth events in emerging markets and the Board is confident of reaching its 50/13 target to derive 50 per cent of revenues from emerging markets in 2013. The Group’s emerging markets businesses continues to gain momentum through a combination of strong revenue growth and the successful integration of recent acquisitions. IFO in Turkey, acquired in June 2011, is performing well. The integration of Life Media in Turkey, acquired in March 2012, is on track. Trading in the Chinese business continues to be very strong. The Group’s exposure to China will be increased significantly by the acquisition of 50 per cent of the China International Automotive Aftermarket Industry and Tuning (Guangzhou) Trade Fair and other associated business assets, which is expected to complete in the next three months. The Group’s largest event in Dubai in 2012 is MEBA (business aviation). Forward bookings for this event are tracking ahead of the previous event. In the US, the Medical division continues to grow strongly. Trading in the Group’s French division has been slightly better than expected. However, given the current economic and political uncertainty in Europe, Tarsus remains cautious for the full year, particularly given the occurrence of the largest French shows in the second half of 2012 and the current weakness of the Euro.

Thalassa Holdings (LON:THAL) 

On 23 April 2012, Thalassa posted a Partial Cash Offer to RSI Shareholders to acquire approximately 25.89 per cent. of the share capital of RSI. If the Partial Offer is accepted in full, Thalassa, together with its existing shareholding, will hold approximately 29.90 per cent. After evaluating various factors in relation to the Offer, the Directors of RSI have made no recommendation to their Shareholders to accept or decline the Offer. However they point out that the Cash Offer price appears opportunistic given that it represents a discount of approximately 52.0 per cent to 1.0 pence, being the closing price on AIM on 30 March 2012, and in their opinion, the trading price of the Ordinary Shares on AIM did not reflect the true value of the Company and its business. The Directors of RSI also noted that their Company needs to raise further capital, though they have yet to conclude on how much, and consequently terms have not been agreed with potential providers of this capital. These terms, once agreed and approved would determine the extent of any future dilution of the interests of existing RSI shareholders. RSI Shares can no longer be traded on a recognised stock exchange although a matched bargain platform for RSI shares is provided by BritDAQ. 

ValiRx (LON:VAL)*

AIM listed life science Company with a focus on cancer diagnostics and therapeutics for personalised medicine today announced that a method for cancer screening, using specific gene biomarkers in the field of genetics and oncology, has recently received patent approval by the United States' patent office. The granting of this latest patent means that ValiRx now has biomarker patent protection in both the US and across Europe, alongside granted and pending patents for its therapeutic technologies across Europe, the US, Canada and Australia. This latest patent concerns the method or process by which gene biomarkers can be used in thedetection or identification of a patient’s susceptibility to cutaneous T-cell lymphoma (a type of non-Hodgkin’s lymphoma) and also for improving treatment methods.

ViaLogy (LON:VIY)

ViaLogy issued a positive business update. The last two months have marked a major progress milestone in their development, with new commercial contracts signed with three of the largest global Exploration and Production (E&P) firms, including two Supermajors. All are focused on putting the Company's technology, QuantumRD, to operational use in some of the world's most important development fields, and aim to improve significantly on industry-standard techniques now in use. The named contracts include the Oil and Natural Gas Corporation of India (ONGC), and Chevron. The contracts also mark the Company's move into the global geophysical services marketplace, with the objective that success in work underway will lead to widespread use of QuantumRD. The Company is at work on winning other large operators and supermajors as clients, for some of whom difficult pilot projects have been completed. ViaLogy also continues to work with some of its smaller clients.

Xenetic Biosciences (LON:XEN)

Xenetic Biosciences, a bio-pharmaceutical company specialising in the development of high-value differentiated biological and vaccines and novel cancer drugs, announced that Dr Henry Hoppe IV has been appointed as Vice President of Drug Development for the Company. Dr Hoppe is a leading biotechnology drug development executive with over 20 years' experience in recombinant protein, monoclonal antibody and stem cell expression for clinical therapies. His is a key appointment for Xenetic that is a pivotal step in establishing the Company's new Drug Development Centre in Boston. Dr Hoppe's principal expertise lies in the processes surrounding regulatory submissions, IND filings and clinical trials, especially in the orphan and rare disease arena, exemplified in his 17 years at Genzyme Corporation where he was instrumental in the development and launch of many of their leading products. The management expects his contribution to be a key driver in unlocking the huge therapeutic potential of Xenetic's three current patent-protected enabling and platform technologies which, in turn, will generate shareholder value that fully reflects the inherent worth of this Company. 

Zeta Compliance Group (LON:ZCGP)*

Zeta announced, following the announcement by PLUS Markets Group plc, that the Company is evaluating its options for the future trading of Zeta's shares. Having achieved approximately £300,000 per annum of cost savings since last year when it took action to ensure that costs were reduced wherever possible, and a new more focused company structure was implemented, the Company intends to communicate further on its options for the future trading of Zeta’s shares in the near future. *A corporate client of Hybridan LLP

In today’s interim management statement, the company highlighted the Ntorya-1 gas discovery made in the Ruvuma basin of Tanzania, which is now ready for flow testing.

Aminex noted that two giant discoveries have recently been made within only 22 kilometres of the Ruvuma block – Anadarko’s 20 trillion cubic feet (tfc) Golfinho and the 4.6 tcf Jodari-1 discovery made by Ophir Energy (LON:OPHR).

New geological and seismic studies have been commissioned to establish the extent of the discovery and the first resource estimate as well as to identify further prospects.

With new pipeline infrastructure currently being planned to deliver gas from Ruvuma to Dar es Salaam, the Ntorya discovery clearly has the potential to be commercially viable, said Aminex.

“These developments highlight the potential of Aminex's East African portfolio to deliver significant value as the exploration programme progresses,” Aminex said in the statement.

“With a new African gas discovery, divestiture of non-African assets and a robust investment programme targeted on our Tanzanian properties, it has been an exciting beginning to 2012 and the rest of the year is expected to be similarly active.”

At the Nyuni area, Aminex plans to shoot 500 kilometres of 2D seismic in the deep water in the second half of 2012 to investigate the potential of the deep-water zone.

An additional 350 kilometres of 2D seismic is planned to begin in the transition zone in the coming weeks.

The company also noted that Ophir is acquiring 3D seismic across the adjoining East Pande block including a large feature with multi-tcf potential that appears to extend into the deep water sector of Nyuni.

Elsewhere in Tanzania, Aminex has completed the engineering design for the Kiliwani North-1 (KN-1) tie-in to the Songas Processing plant. The line pipe to connect KN-1 to the processing plant is expected to be delivered by the end of June.

The Tanzanian government is finalising financing arrangements with the Chinese Exim Bank for new pipeline and processing plant infrastructure that will include additional processing and transportation capacity from Songo Songo Island.

“Aminex looks forward to resuming investment in Kiliwani North when the new processing plant and gas pipeline plans have been finalised,” said Aminex.

Outside of Tanzania, Aminex has sold the Somerset Field in Texas for US$701,600, which was the first step in the programme to divest its assets in the US, and has decided to withdraw from its exploration programme offshore North Korea to focus on its African assets.

The company also said today that it is reviewing both corporate and licence acquisition targets to further grow its presence in Africa.

E.U.'s woes are rooted in its solutions - This is an informative article by Paul Taylor of Reuters, also published by the NYT and IHT. I have used the IHT's headline and here is the opening, posted without further comment:

PARIS - Americans call it a Rube Goldberg machine, Britons a Heath Robinson contraption and the Danes a Storm P machine.

The European Union's policy making system often resembles one of those cartoon designs of an implausibly convoluted system for achieving a simple task - held together by adhesive bandage, string, frequent tinkering and plenty of wishful thinking.

What is striking when you compare Europe's policies on agriculture, monetary union and climate change is the way the Union keeps bolting on patches and extra wiring to try to fix problems created by its own solutions.

Over the past five decades, the Union has set out to achieve a set of worthy goals by regulating markets - self-sufficiency in food, currency stability, resistance to climate change.

Each of these policies created perverse incentives or what economists call "moral hazard" - unintended consequences like an oversupply of food, real estate bubbles and debt overhangs.

When things go off the rails, the Union's reflex is never to question or scrap the policy, since political dogma, vested interests and institutional inertia rule out going back on what in Eurospeak is called the "acquis," or European achievements.

The default response is always "more Europe," without insisting upon the most straightforward solution, which is often blocked by the threat of political vetoes.

"In political science, it's called 'path dependency,"' said Helen Wallace of the London School of Economics, an authority on European governance. "You are so locked in by what you have done before that you end up doing a version of it again and again."

While similar behavior exists in national governments and private businesses, the European Union is special - not just because of the number of veto holders who can block change, but also because supporters of the European integration project are reluctant to be critical when policies go wrong, she said.

Furthermore, E.U. policies are enshrined in law and treaties, making them harder to amend, said an adviser to President José Manuel Barroso of the European Commission.

Europe Rejects Austerity; ECB Warming Up Its Printing Press - My thanks to Michael Jones of RiverFront Investment Group for this excellent report. It is posted in the Subscriber's Area but here is a brief sample:

By contrast, we believe that the election of Socialist candidate Francois Hollande as President of France is likely to have more profound and long-lasting effects on financial markets and the global economy. If Hollande's party receives a majority in June's parliamentary elections, as polls currently suggest, then his election is likely to mark the end of austerity policies in Europe. Specifically, Hollande is likely to push for a far more activist monetary policy by the ECB ("stealth" quantitative easing).

Contrary to the hopes of his electorate, we do not think that Hollande's policies will improve France's economic prospects and his retreat from structural economic reform may keep French equity markets depressed (as well as any other European markets that follow France's lead). However, a more aggressive ECB could greatly improve growth prospects for Germany and developed economies outside of the Euro bloc (especially the US and the UK). In addition to its economic impact, ECB quantitative easing should ultimately prove supportive of the global equity markets and "weak" Europe's bond markets.

My view - Advocates of Austrian school economics will deplore this approach but I think it is the only way Europe can hold the single currency together for another decade with most of its present member states.

Michael Jones provides an excellent, logical analysis and I commend this issue of his letter to you.

What projections can we make for Europe's markets?

This chart-illustrated item continues in the Subscriber's Area.

Tide Turning in Japan Deflation Fight, BoJ's Top Economist Says - Here is the opening from this report from Bloomberg today:

The Bank of Japan could reach its 1 percent inflation goal in two years as brighter growth prospects spur prices, the central bank's top economist indicated.

"Growth in prices will be closer to the 1 percent inflation goal at or after the end of fiscal 2013 unless the economy gets thrown off course," Eiji Maeda, 50, the BOJ's chief economist, said in an interview in Tokyo yesterday, referring to the year ending March 2014. "In the long term, there are signs that the tide is turning in price trends."

The remarks signaling that the target could be met in the year starting April 2014 are the strongest yet from the central bank, which last month forecast prices would increase 0.7 percent in fiscal 2013. BOJ Governor Masaaki Shirakawa has pledged "powerful" monetary easing until the goal is in sight and has already added stimulus twice this year.

Companies have improved Japan's growth outlook by targeting an aging population, which could spur demand and help lift prices, Maeda said. Higher labor costs in countries like China,Japan's largest trading partner, have reduced pressure on Japanese firms to lower prices, which has also helped ease deflation in Japan, he said.

My view - Central banks have not exactly distinguished themselves in the realm of inflation forecasts in recent years, although the errors have mainly been underestimates of inflation, not least by the Bank of England.

Japan has been different, remaining mired in deflation to the considerable angst of the ruling National Diet of Japan, not to mention long-suffering corporate exporters who have seen their profit margins eroded by the yen's strength. I last wrote about this in my lead item and review on 1st May 2012, pointing out once again that Bank of Japan Governor Masaaki Shirakawa seemed determined to preserve purchasing power for Japan's increasingly elderly savers. While laudable, this was not helping the economy and stock market to recover. Therefore I take the BoJ's latest forecast above with a proverbial grain of salt, although I hope it proves to be accurate.

Two weeks can be a long time in stock markets so what can we say about Japan's indices today?

This chart-illustrated item continues in the Subscriber's Area.

More on shale gas: Ukraine's windfall offers freedom from Russia - My thanks to a subscriber for this informative article from The Washington Post. Here is the opening:

VIKTOR YANUKOVYCH deserves no reward for his heavy-handed rule as president of Ukraine. His term has brought increasing corruption, a concentration of power in the presidency and show trials of political opponents. The most worrying has been the case of Yulia Tymoshenko, a former prime minister who now languishes in prison on a seven-year sentence.

Yet those concerned about Ukraine's future have some reason for hope about a deal that will give Chevron and Royal Dutch Shell the rights to develop unconventional natural gas fields in the country. The arrangement could lead to $370 million in investment and result in Ukraine producing up to 10 percent of the gas it uses by 2020. If handled well, it could prove more impetus for good behavior than reward for bad.

True, the contract seems to undercut the West's recent approach toward Ukraine, which involves rebuking Mr. Yanukovych's regime following Ms. Tymoshenko's sentencing. The European Union has put wide-ranging trade talks on hold, and there is talk of European leaders boycotting a soccer tournament in Kiev this summer. For now, relations between the Russian government and Mr. Yanukovych are also cool, which, combined with the lure of lucrative future economic ties, gives the West some leverage to push Ukraine back from authoritarianism. The E.U. is right to use that leverage.

What's more, Anders Aslund, an expert on Eastern European economies, warns that Chevron and Shell's natural gas projects could very easily become ensnared in official corruption, benefiting a small circle of oligarchs surrounding Mr. Yanukovych and producing little fuel.

Yet by the same token, the new gas deal provides Ukraine an opportunity to demonstrate that its government can insulate critical economic affairs from that corruption, letting Chevron and Shell conduct their work free from unnecessary hindrance. Bringing Western corporate efficiency into Ukraine's energy sector would also help remove one of the largest long-term obstacles to the country's westernization: Russia. Ukraine's dependence on Russian natural gas has been the primary tool used by Russian President Vladimir Putin to manipulate Kiev. More freedom from Russia would enable Ukraine to chart its own course, including, potentially, liberalization that would allow deepening ties with the European Union. Much will depend on details of the relationship between the government and the companies yet to be spelled out.

My view - It has long been known that Ukraine and Poland have Europe's largest reserves of shale gas. The country which stands to lose the most from the development of these energy resources, in terms of pricing power for gas and political influence, is Russia.

By offering Chevron and Royal Dutch Shell - the biggest and most experienced players in gas - the rights to develop shale fields in Ukraine clearly indicates that Viktor Yanukovych is determined to exploit this valuable resource. He may be a ruthless authoritarian but shale gas could bring Ukraine closer to the west.

The alternative is to drive Yanukovych closer to Vladimir Putin. The last thing Europe needs, I suggest, is a Russia-Ukraine gas cartel. However, competition between the two suppliers would increase energy supplies for Europe and possibly lower the price.

Email of the day - On support:

"The following unattributed quote may not have the right tone for Comment of the Day, but I thought it might supply your private amusement:

"The Financial Markets are currently like a strapless bra. Half the people are wondering what's holding it up whereas the other half are waiting for it to drop so that they can grab the opportunity with both hands."

"Simple basic economics.

"With warm regards and eternal appreciation for your wonderful, educative service,"

My comment - I think the Collective can handle it.

Thanks for a very amusing quote and also for your kind words.

Additional commentary by Eoin Treacy

The US Dollar The received wisdom is that the US Dollar is a weak currency. There have been heated arguments among investors for a number of years about the likelihood of a Dollar crisis. We have never been supportive of the crisis idea. However, there has been no denying that the US Dollar has declined considerably against a wide range of currencies over the last decade, not least some of those in Asia and Latin America. The USA's deficits, unfunded future liabilities and rampant money supply increases have all contributed to deteriorating investor sentiment towards the currency.

However, the US Dollar also reflects the stability of the world's largest most liquid capital market and continues to attract adherents during times of financial stress. Over the last three years it has tended to hold onto more of its strength on pullbacks than has been the case over the preceding decade.

One of the defining characteristics of the 1990s was that not only did the USA have one of the most vibrant stock markets but also one of the strongest currencies. This was powerfully attractive for foreign investors in US assets. Between 2002 and 2008 the Dollar Index dropped by over 40% and the trend reversed. Asian currencies in particular but also the Brazilian Real outperformed from 2000 until 2008 which made investing outside of the US Dollar more attractive.

This section continues in the Subscriber's Area.

Email of the day on a Yen denominated gold ETF:

Does the collective know of an instrument that invests in gold in Yen? And your comment?

My comment Thank you for this question which others may also have an interest in. Thanks also for you participation at the New York venue for The Chart Seminar last month.

There are at least two Japanese listed gold ETFs denominated in Yen. The Mitsubishi UFJ Japan Physical Gold ETF appears similar to other physical gold ETFs. I do not know if there are any Yen denominated gold ETFs listed in the USA.

Depending on the size of one's account it may be possible to ask a broker to create a structure which allows you to take a position in gold and hedge it against the USD/JPY exchange rate. Alternatively one could buy the Gold SPDR (GLD) and short a commensurate amount of the CurrencyShares Japanese Yen Trust (FXY).

This section continues in the Subscriber's Area.

Email of the day on private hospitals:

I have noticed that your chart of Woolworths in South Africa ends at 1st March 2012. Could this be updated please? You might also want to remove Dimension Data which was delisted some time ago.

Finally, please would you add Mediclinic to the South African list; and, are you aware of any non-SA companies that are listed and that offer similar clinic/hospital services in the private sector? The big US companies seem mostly to offer health insurance rather than medical services. SA private sector clinics have been very successful but are under threat of government interference. With aging populations in the OECD countries, this seems a sensible avenue of investment.

My comment Thank you for alerting us to these data issues which have been corrected. I have also added Mediclinic to the Chart Library. The medical clinic and elderly care sectors, as you point out, are growth areas. Funeral services benefit from the same trend. I have highlighted Australia's Ramsay Healthcare on a number of occasions not least for its high yield and because it is an S&P Pan Asia Dividend Aristocrat. The most recent was in Comment of the Day on May 2nd.

This section continues in the Subscriber's Area.

The Chart Seminar 2012 - Following a well-received tour of the USA I am looking forward to our next venue in London which now only three weeks away. Anyone interested in securing a place at any of our events should contact Sarah Barnes at: sbarnes@fullermoney.com.

The remaining dates and venues for The Chart Seminar in 2012 are:

London - May 24th & 25th 2012 at the Radisson Edwardian Hampshire

London - November 22nd & 23rd 2012 at the Radisson Edwardian Hampshire

The full rate is £950 + VAT. (Please note US delegates, as non EU residents are not liable for VAT). The early booking rate of £875 for non-subscribers expires on January 30th for the US seminars. Paid-up Fullermoney subscribers are offered a discounted rate of £850. Anyone booking more than one place can also avail of the £850 rate for the second and subsequent delegates. 

ASIA

Nikkei share average closed lower by 1.1% as Japanese banking profit forecasts fell and flat lending data from China fuelled risk-aversion. (Sources)

Top performing sectors in the Nikkei 225: Health Care (+0.14%), Financials (-0.71%), Technology (-0.79%)

Worst performing sectors in the Nikkei 225: Telecommunications (-1.78%), Utilities (-1.56%), Industrials (-1.34%)

US

US equities finished in minor negative territory yesterday as Greek woes continued to weigh on the market after the Greek political parties formally concluded discussions to form a coalition government without success. Social media stocks were the one bright-spot in equities as Linked-In, Zynga and Groupon were been amongst the strongest stocks, following Groupon’s earnings Monday night and news that Facebook increased their guidance price for their IPO which is due this coming Friday. Finally the DJIA finished down 0.50% at 12632.00, the S&P 500 finished down 0.57% at 1330.66 and the Nasdaq 100 finished down 0.37% at 2580.75. (RANsquawk)

Top Performing Sectors in S&P 500: Consumer Services (-0.06%), Consumer Goods (-0.26%), Telecommunications (-0.37%)

Worst Performing Sectors in S&P 500: Basic Materials (-2.10%), Oil & Gas (-1.41%), Utilities (-0.58%)

JC Penney – Co. reported a Q1 adjusted loss per share USD 0.25 vs. exp. loss per share USD 0.08; cuts forecast, Q1 same store sales down 18.9%, Q1 net sales USD 3.15bln vs. Exp. USD 3.43bln, co. ended their USD 0.20 a share quarterly dividend, co. sees missing year gaap EPS of USD 1.59 on charges and write-downs, co. sees incurring added restructuring charges and co. says may incur added merchandise write-downs and exits certain lines of merchandise. (Sources)

GE – Co. has accelerated its growth in mining with the acquisition of equipment makers Industrea Ltd for AUD 700mln and Fairchild International with terms undisclosed. (Sources)

Safeway – Co. boosted their quarterly dividend to USD 0.175 per share from USD 0.145 vs. Exp. USD 0.175. (Sources)

Research In Motion – Facebook and Vodafone are rumoured to be eyeing the Co. for a takeover. (Daily Mail)

Amylin Pharmaceuticals - Pfizer, AstraZeneca and Sanofi are among companies to have signed confidentiality agreements with co. on its sale process. (Sources)

Kraft Foods - Ackman's Pershing Square significantly reduced its stake in Kraft Foods. (Sources)

UK

UK Banks - Adam Young of Rothschild has told MPs the government should consider selling part of its stakes in RBS and Lloyds at a loss in order to kickstart the disposal process. In other reports, high profile bankers have urged the government not to conduct a sweetheart deal with a sovereign wealth fund and said if the government is prepared to be patient, they will not have to give the taxpayers’ money to such a fund. (Daily Express/Times)

Royal Dutch Shell - The Brazilian unit of co. is calling for a system of incentives to help companies reach local-content requirements in Brazilian oil & gas production project. (Sources)

Rio Tinto – Co. CEO says the co.’s belief in long-term demand remains unchanged and shortages are returning for capital and operating supplies. (Sources)

BHP Billiton – Co. CEO plans to continue to optimise the co.’s asset portfolio and remains ‘largely committed’ for financial years 2013/14. Co. Chairman has said Australia remains one of the higher-cost countries for miners, adding that the Co. will redirect capital if any product or geography does not suit. Co. Chairman says he no longer expects USD 80bln in investments over the next five years. (Sources)

Diageo – Co. is rumoured to have made significant progress in negotiations for the acquisition of Jose Cuervo, currently believed to be valued at USD 3bln. (Independent)

Compass Group – Co. reports H1 revenues of GBP 8.6bln vs. Exp. GBP 8.54bln. Co. says their H1 underlying operating profit was GBP 617mln vs. Exp. GBP 602.3mln. Co. says acquisitions are making a meaningful contribution and H1 expectations for the full year are remaining unchanged. Co. proposes an interim dividend of GBP 0.072 per share, previously GBP 0.065 per share. (Sources)

Land Securities – Co. reports full year EPS of GBP 0.674, previously GBP 1.622. Co. reports its revenue profit was up 9% to GBP 299.4mln. Co. proposes a full year dividend up 2.8% at GBP 0.29 per share. (Sources)

ICAP – Co. reports full year revenues of GBP 1.68bln vs. Exp. GBP 1.715bln. Co. says its full year pretax profit stands at GBP 217mln, previously GBP 233mln. Co. proposes a full year dividend of GBP 0.22 per share, previously GBP 0.1995. (Sources)

SSE – Co. reports a full year adjusted profit after tax of GBP 1.12bln, previously GBP 1.04bln. Co. sees full year capex of GBP 1.71bln, previously GBP 1.4bln and proposes a full year dividend of GBP 0.801 per share, previously GBP 0.75 per share. (Sources)

Companies going ex-dividend: HSBC (USD 0.1000), Glencore (USD 0.1000), Sage Group (GBP 0.0386), Whitbread (GBP 0.3750), J Sainsbury (GBP 0.1288), WM Morrison (GBP 0.0836), Inmarsat (USD 0.2773)

OTHER UK

Tullow Oil – Co. reports it is on track to deliver a net output of 78-86,000 BOEPD in 2012. Co. also sees 2012 capex at USD 2bln. (Sources)

Wessex Exploration – Co. reports its first well will appraise Zaedyus-1 in French Guiana. (Sources)

FRENCH

EADS - Q1 EPS EUR 0.16, Q1 sales EUR 11.4bln vs. Exp. EUR 10.7bln, up 16%. Q1 net income EUR 133mln vs. Exp. EUR 239.5mln. Co. also raised their EPS pre-items guidance to more than EUR 1.85. In other comments, Airbus A38- delivery plan for 2012 is more challenging, however is still targeting 30 A380 deliveries in 2012. Co. sees potential for further charges related to future A380 deliveries until a long-term win-repair system is implemented. Co. remains increasingly confident on their outlook for 2012. (Sources)

Bouygues – Co. reported a Q1 net EUR 35mln vs. exp. EUR 45.2mln, Q1 revenue EUR 6.99bln vs. prev. 6.69bln, co.’s construction order book is at a record level and the co. raised its 2012 sales target to EUR 32.7bln. (Sources)

Companies paying dividend: Air Liquide (EUR 2.5000), Schneider Electric (EUR 1.7000)

GERMAN

Siemens – Qatar have taken a stake of just over 3% in the Co., continuing a phase of investments in a series of European blue-chip companies. (FT-More)

ThyssenKrupp - Co.'s chief says will seek buyers or partners for its US and Brazilian steel-making operations. (Handlesblatt)

PAN EUROPEAN

European Banks – Up to twenty of Europe’s largest banks will today discuss plans to curb the dominance of the three largest credit rating agencies at a private meeting of finance directors in Frankfurt. Some of the banks want to change the culture of information disclosure to level the playing field for potential new entrants to the market. One person familiar with the situation has said the ratings agencies should get a standard package of information in order to place all banks on equal footing. (FT-More)

European Companies – Shareholders in Europe’s listed companies will be given a binding vote on pay while those who invest in banks will gain powers to set a cap on bonus levels, under plans being drawn up by EU officials. (FT-More)

Santander – Co.’s UK arm has been forced to stress its independence from the Co. amid nervousness about the vulnerability of the Spanish economy. (FT-More)

Banca Monte dei Paschi – Co. reported Q1 net income EUR 54.5mln vs. exp. EUR 69.1mln, Q1 revenue falls to EUR 1.33bln, core Tier 1 ratio rises to 11.3% at the end of March, co. said they are reviewing their business plan. Co.'s risk-weighted assets fell to EUR 103bln as of the end of March, co. also had around EUR 25bln Italian govt. bonds at the end of March. (Sources)

Banco Popolare – Co. reported Q1 net loss EUR 109mln vs. exp. loss EUR 74.7mln, co. says there was a EUR212mln negative impact from creditworthiness changes, Q1 core Tier 1 ratio at 7.1%, co. increase Italian government bond holdings by EUR 1.3bln in Q1. (Sources)

SMI

Richemont – Co. reports full year sales of EUR 8.867bln vs. Exp. EUR 8.59bln. Co. says FY net profit of EUR 1.54mln vs. Exp. EUR 1.368bln. Co. announces a programme to buyback up to 10mln preferred shares in the Co. and proposes a dividend of CHF 0.55 per share. (Sources)

BROKER MOVES

BARCLAYS RAISED TO BUY VS NEUTRAL AT UBS GLENCORE CUT TO NEUTRAL VS BUY AT UBS XSTRATA CUT TO NEUTRAL VS BUY AT UBS G4S UPGRADED TO OUTPERFORM FROM NEUTRAL AT EXANE MORRISON UPGRADED TO NEUTRAL FROM UNDERWEIGHT AT JPMORGAN CREDIT AGRICOLE RAISED TO 'BUY' AT SOCIETE GENERALE INFINEON RAISED TO HOLD VS SELL AT SOCGEN SANTANDER CUT TO NEUTRAL FROM OVERWEIGHT AT HSBCTOTAL RAISED TO EQUALWEIGHT FROM UNDERWEIGHT AT MORGAN STANLEY

Barclays’ (LON:BARC) share price has suffered in recent weeks due to concerns over its exposure to Spain, says Swiss bank UBS.

Since it reported first quarter results last month, the share price has plunged around 20 per cent, which the broker says makes it an attractive investment.

As a result, it is upgrading its recommendation to ‘buy’ from ‘neutral’.

However, UBS has also cut its target price for UK bank to 215 pence from 272 pence.

UBS analyst John-Paul Crutchley said: “Recent share price retrenchment has largely been driven by concerns over Barclays exposure to Spain where we think a more realistic approach to impairment over the last few years should limit the impact of higher provisioning from the proposed Royal Decree to between £50-£70m.”

Barclays has a network of more than 450 branches across Spain and employs nearly 4,000 people.

Crutchley also reckons that recent moves at Barclays’ AGM to link CEO/CFO pay directly to return on equity performance “should be a positive for shareholders”.

At the company’s AGM at the end of April, 32 per cent of shareholders failed to back Barclays’ remuneration report.

Shares were down 2 pence in early trading to 184 pence.

The President of the CBI will today urge business leaders to confront some of the hard truths to deliver their side of the bargain to get the UK economy moving again. (FT)

The agreement struck in Brussels yesterday between EU finance ministers will allow the UK to implement key policies recommended by the Independent Commission on Banking last year, such as retail ring-fences and 10% capital buffers, designed to protect the country from another financial crisis. (Telegraph)

The Chancellor fought off stiff opposition from France in particular, which wanted to strip national supervisors of authority by centralising banking regulation in Brussels.

UK exporters are curbing their reliance on Euroarea markets and boosting sales of cars and other products in countries including China, according to Citigroup analysis. (Times) The share of British exports destined for the Eurozone slipped to its lowest level on record in Q1, at 45.3% as exports to China surged by nearly 18% compared with a year earlier, but that still left China a less important customer for British goods than the Netherlands or Belgium and Luxembourg.

Manufacturers have delivered a withering judgment on the Government’s industrial policy, accusing the coalition of empty rhetoric that has delivered stagnating economic growth. (Times) According to one of the largest studies of Britain’s engineers and manufacturers, an overwhelming majority believe that the Government is not delivering the right policies to support industry. In the survey of 1,500 employers by the consultancy BDO, only 26% believe the coalition is adopting the right strategies to support and develop UK manufacturing.

Adam Young of Rothschild has told MPs the government should consider selling part of its stakes in RBS and Lloyds at a loss in order to kickstart the disposal process. In other reports, high profile bankers have urged the government not to conduct a sweetheart deal with a sovereign wealth fund and said if the government is prepared to be patient, they will not have to give the taxpayers’ money to such a fund. (Daily Express/Times)

Ophir Energy (LON:OPHR) and its partner BG have made another major gas discovery offshore Tanzania, the fifth consecutive hit on their blocks in the region.

The Mzia-1 well in Block 1 intersected a 178m gas bearing column and 55m of net pay in the Upper Cretaceous, Ophir said.

The mean average resource was estimated at 3.5 TCF with "significant" potential upside.

BG (LON:BG.) and Ophir had already discovered an average 7 TCF of gas from their first four wells of the offshore Tanzania programme, but said today the Mzia-1 result will add substantially to this total as well as opening the Rovuma Delta Upper Cretaceous intraslope play.  

Ophir holds 40 per cent of Blocks 1, 3 and 4; BG operates the blocks with a 60 per cent stake. 

The Mzia-1 well was located 45km off the coast of Tanzania and 45km north of the Mozambique maritime border, spudded in 1,639m of water and drilled to a total depth of 4,858m subsea.

Drilling will now move north to Block 3 to drill the Papa-1 well, a test of the equivalent Upper Cretaceous section in the Rufiji Delta.

Papa-1 has a pre-drill mean estimated prospective resource of 3.1 TCF and a 40 per cent chance of success. Results from the Papa-1 well are expected in July 2012. 

Separately, the 3D seismic acquisition programme to explore a potential continuation of Tertiary basin floor fan prospectivity from Mozambique into the eastern portion of Block 1 is nearing completion, with preliminary processing, mapping and interpretation expected by the third quarter of this year.

Nick Cooper, Ophir’s chief executive said: "Mzia-1 was the first definitive test of the Upper Cretaceous in Tanzania, and Ophir's highest risk East African well to date.

"This play-opening result, and other recently announced drilling, have now proven the Upper Cretaceous slope play on the Tanzanian side of the Rovuma Delta and de-risked an inventory of adjacent prospects of similar age.

"The success at Mzia-1 is a major step towards a Tanzanian LNG hub development in Block 1. We will now test the equivalent deeper play in the Rufiji Delta in Block 3 with the Papa-1 well."

ASIA

JGBs prices were seen up sharply heading into the European session, 10-yr JGBs were up 25 ticks at 143.50. Market participants continue to seek safe-haven assets due to the ongoing Greek concerns. Last price taken at 0628BST. (RANsquawk)

According to unsourced reports, the BoJ could cut their interest rates on reserves. (Financial Facsimile Service)

The Vice-Chairman of the Chinese banking watchdog has said regulators do not plan to change the country’s RRR, and policymakers are now studying a regulatory system in which banks would extend loans at a steadier pace. (Sources)

New lending by China’s four largest state-owned banks was flat for the first two weeks of this month, and total deposits continued the decline from April to fall by approximately CNY 200bln. (Shanghai Securities News)

US

T-notes settled close to flat for yesterday in a volatile and directionless session. Risk appetite was observed early on following stronger EU GDP data from the likes of Germany and Portugal. However uncertainties regarding the Greek political situation after the Greek parties were unable to form a coalition ensured the benchmark 10y note found buyers on the dips. At the pit close, t-notes settled at 133.12+, down 1 tick. Finally the DJIA finished down 0.50% at 12632.00, the S&P 500 finished down 0.57% at 1330.66 and the Nasdaq 100 finished down 0.37% at 2580.75. T-notes were trading marginally higher up 3+ ticks at 133.15+ heading into the European open, extend on this week's gains, concerns surrounding the political situation in Greece continue to force investors to purchases safe-haven assets. Last price taken at 0635BST. (RANsquawk)

The Republican leader of the House of Representatives has set the stage for a new fiscal showdown with the Obama administration; reviving memories of the standoff last summer which saw the US lose its ‘AAA’ rating. (FT-More)

The Federal Housing Financing Agency has expressed concern on the potential Californian anti-robosigning laws, saying that the new ruling could have a chilling effect on lawful foreclosures. The FHFA added that the ruling could lead to a reduction in credit availability and could create significant risks for the housing markets. (Sources)

EU

Greece is now heading for a second wave of elections, most probably on June 17th, after party leaders failed to form a stable governing coalition. (ekathimerini)

Portugal is preparing for the possibility of a disorderly Greek exit from the Eurozone by reaffirming an unwavering commitment to austerity and a determination to see through tough economic reforms according to sources. (FT-More)

According to unsourced reports, Germany is demanding that the ECB return EUR 35bln to the EFSF. (FTD) The EFSF had extended the EUR 35bln as a risk guarantee during the recent exchange of Greece's government debt, according to the report.

EU’s Barnier has sought to distance himself from the new socialist president Hollande by contrasting one of the President’s headline pieces of campaign rhetoric. Barnier has said the enemy is not finance, but unregulated finance. (FT-More) The Barnier-Hollande relationship will be closely watched as it could be pivotal to further reining in Europe’s financial sector after a decade of perceived abuse.

The Greek President said that Greeks have withdrawn EUR 700mln in savings since the May 6 election and admitted that the Greek banking sector is weak. (Sources)

French President Hollande reiterated that he wants to renegotiate the recent EU treaty, adding that he is committed to meeting budget targets but also needs growth. (Sources) In his first meeting as President with the German Chancellor he stated that all possible measures that would support growth should be considered.

German Chancellor Merkel has said Germany and France want Greece to stay in the Euro-zone and are ready to help Greece with structural and growth-boosting measures wherever possible although Merkel added that Greece must hold to Troika terms of aid. (Sources) The German Chancellor said during the joint press-conference that it is important that France and Germany present ideas on growth in Europe at the June summit.

FX

Australian Westpac Consumer Confidence SA (May) M/M 0.8% (Prev. -1.6%)

Australian Westpac Consumer Confidence Index SA (May) M/M 95.3 (Prev. 94.5) (Sources)

The deputy of India’s central bank has said the bank will be closely observing the INR, and will take all steps to curb unnecessary volatility. (Sources)

GEOPOLITICAL

A former top US general has said Washington and Moscow should agree to an 80% cut in nuclear arsenals over the next decade to help encourage smaller atomic powers to engage in multi-lateral arms control negotiations. (FT-More)

COMMODITIES

WTI crude futures were seen down USD 1.35 at USD 92.63 heading into the EU session, hitting its lowest levels in almost five months. Last price taken at 0633BST. (RANsquawk)

US API Crude Oil Inventories (May 11) W/W 6571K vs. Prev. 7781K

US API Gasoline Inventories (May 11) W/W -2637K vs. Prev. -4963K

US API Distillate Inventory (May 11) W/W -1570K vs. Prev. -2726K

US API Cushing Crude OK Inventory (May 11) W/W 2799K vs. Prev. 1208K. (Sources)

Under mounting pressure from the US, India are to cut their crude imports for refiners by 11% from Iran over the next fiscal year, according to the Indian junior oil minister. (WSJ)

BHP Billiton’s Chairman has said he expects commodity markets to cool further, with tailwinds of high commodity prices assisting growth in sector now slowing down. As such, easing in the market will now occur over a long period of time. (Sources)

Ophir Energy (LON:OPHR) stole the limelight this morning as it announced its fifth consecutive gas discovery offshore Tanzania, revealing that the Mzia-1 well in Block 1 intersected a 178 metre gas bearing column and 55 metres of net pay.

Mean in place resource is estimated at 3.5 trillion cubic feet with significant potential upside.

Further technical work will determine the recoverable resource of this substantial, commercial gas discovery, the company said.

“Mzia-1 was the first definitive test of the Upper Cretaceous in Tanzania, and Ophir's highest risk East African well to date,” said chief executive of Ophir,” said chief executive of Ophir Nick Cooper.

“The success at Mzia-1 is a major step towards a Tanzanian LNG hub development in Block 1. We will now test the equivalent deeper play in the Rufiji Delta in Block 3 with the Papa-1 well.”

Tethys Petroleum (LON:TPL) also had positive news to report this morning.

The group told investors that it has received an updated oil resource report for its Kazkahstan assets, which estimates its  gross unrisked recoverable prospective oil resources at 1.17 billion barrels of oil.

In addition to the oil resources, there are unrisked gas prospective resources of 231 billion cubic feet and separate non-associated prospective gas resources of 374 bcf.

The next appraisal/exploration well, AKD07, is expected to spud mid-year 2012 to test the Dyna exploration prospect, which has recoverable prospective resources of 128 million barrels.

Sticking with oil and gas, Tullow Oil (LON:TLW) has contracted a drill ship to begin work on further exploration of the Zaedyus discovery in French Guiana next month following the drill success late last year.

The plan initially is to appraise the Zaedyus-1 well and explore for deeper objectives, to be followed by an exploration wildcat well.

Small caps Northern Petroleum (LON:NOP) and Wessex Exploration (LON:WSX) have a combined 2.5 percent stake in the project.

Peer Aminex (LON:AEX) released an interim management statement, covering the year to date, in which it highlighted the Ntorya-1 gas discovery in prolific Ruvuma Basin, which is ready for flow testing.

Geological and seismic studies are expected to provide initial resource estimates for Ruvuma and updated resource estimates for the Nyuni area.

The company also noted that gas exploration infrastructure planned by the Tanzanian government will serve all three of its properties, providing existing and future discoveries a clear route to monetization.

“These developments highlight the potential of Aminex's East African portfolio to deliver significant value as the exploration programme progresses,” the company said in the statement.

“With a new African gas discovery, divestiture of non-African assets and a robust investment programme targeted on our Tanzanian properties, it has been an exciting beginning to 2012 and the rest of the year is expected to be similarly active.”

In the mining sector, Connemara Mining (LON:CON) said it has completed the airborne survey targeting gold deposits over the block of five licences in Ireland and Ferrex (LON:FRX) reported positive results from an initial scoping study on its Malelane iron ore project.

The work is part of an ongoing joint venture between Connemara Mining and Hendrick Resources of Canada whereby Hendrick will earn 75 percent interest in the licences by spending €1 million.

“Dale Hendrick, an acknowledged expert in evaluating airborne survey results has done some work on the raw data from the survey,” said chairman of Connemara John Teeling.

“He believes that he has identified previously unknown 'potential' targets for gold deposits.  These are targets that could not be identified from conventional ground based exploration.”

Final results are due within six weeks following which the next stage of exploration will be decided, said Connemara.

The study for Ferrex’s malelane project, which focused on the development of three million tonnes (3 Mt) per annum based on an inferred resource of 154 Mt), estimated the project’s net present value (NPV) at US$513 million with operating costs of around US$59/t FOB.

Capex was estimated at US$297 million with a significant reduction expected in revised study.

“The robust economic results from the scoping study are a result of the low capital cost of constructing a three million tonne per annum operation at Malelane with a 16.6 year mine life, placing it in the lowest quartile for capital intensity of new iron ore projects globally,” said managing director of Ferrex Dave Reeves.

Fellow mining group Horizonte Minerals (LON:HZM, TSE:HZM) said it expects to announce the results of the preliminary economic assessment for its Araguaia nickel project in Brazil at the end of the current second quarter. 

The prefeasibility study will follow, and is expected to be released in the first half of 2013.

The group today reported results for the first quarter to end-Mach 2012, a period which saw, among other milestones, a 30 per cent upgrade to the flagship project’s NI 43-101 resource to more than 100 million tonnes and metallurgical tests revealing good recoveries from Araguaia ore.

In the meantime, Continental Coal (LON:COOL) said the twin declines at the Penumbra coal mine were advanced 58 metres in April to a combined total length of 135 metres and the conveyor road has advanced down 79 metres and the travelling road down 56 metres.

During the month minor problems with the soft floors impacted decline advance rates, however measures have been put in place to address this, said Continental.

Meanwhile, the Vlakvarkfontein coal mine achieved above budget run of mine (ROM) coal production of 112,281 tonnes in April, up six percent from March, while ROM coal production at the Ferreira coal mine rose four percent to 55,263 tonnes.

Elsewhere in the sector, Minera IRL (LON:MIRL) has started the permitting process for the Don Nicolas project in the Santa Cruz province of Argentina following the completion of an environmental impact assessment (EIA).

Permitting is expected to take around six months.

“We continue to receive outstanding support from the authorities in Santa Cruz and are confident that the permitting process will proceed expeditiously,” said executive chairman of Minera Courtney Chamberlain.

“The future Don Nicolas Mine promises to be an attractive investment with considerable upside potential in a number of areas.

“We remain confident that we will have our first gold pour from Don Nicolas in late 2013.”

Namakwa Diamonds (LON:NAD) also released an update this morning, reporting that it has closed its first sale of Kao diamonds in Antwerp with 16,388 carats sold at an average price of US$395 per carat.

The largest diamond sold was 38cts at US$6,668/ct, with an 11ct diamond selling for US$15,020/ct and four diamonds with sizes varying between 6 and 14 carats selling for an average of US$7,100/ct.

Revenues reached US$6.47 million with achieved prices topping estimates by 17 percent, resulting in an additional income of US$1 million.

Sales will continue through Fusion Alternatives for at least the next six months.

“The significant improvement in achieved price reflects both the increased parcel size on comparative diamond sales in Johannesburg, as production ramps-up at the Kao Mine, and the international exposure provided by our tender partner, Fusion Alternatives,” said chief executive of Namakwa Richard Collocott.

“We look forward to regular monthly sales in Antwerp for the foreseeable future.”

In biotech, Angel Biotechnology (LON:ABH) has signed a new contract with ReNeuron (LON:RENE) to provide GMP cell manufacturing services to support the final part of the PISCES Phase 1 clinical trial of its ReN001 stem cell therapy for stroke.

“We are pleased to continue our manufacturing partnership with Angel to serve the needs of the ongoing PISCES stroke clinical trial, and we look forward to seeing the higher dose cohorts in the study treated with our ReN001 stem cell therapy over the coming months,” said chief executive of ReNeuron Michael Hunt.

In other news, technology investor Angle (LON:AGL) said its 31 percent owned portfolio group Geomerics, which specialises in computer games middleware, has successfully completed the third and final milestone in its corporate partnership with a major technology company and has received a milestone payment.

The deal included investment in Geomerics of up to £2.3 million, of which £1 million was subject to certain milestones.

The total investment of £2.3 million has now been received.

Finally, Westminster Group (LON:WSG) has opened the new Longmoor Training Academy, which it said was in response to the increasing demand for Longmoor close protection (CP) courses.

“The market in personal protection has grown significantly with the much publicised increase in kidnap, hostage taking, ransom demand and targeted theft of wealthy and high profile individuals,” said chief executive of Westminster Peter Fowler.

Stem cell specialist ReNeuron Group (LON:RENE) has extended its cell manufacturing contract with Angel Biotechnology (LON:ABH) to help complete its stroke patient therapy trial.

ReNeuron is currently in the second dose cohort of its PISCES study, which is trialling its stem cell therapy ReN001 for stroke patients in Scotland.

Angel will provide the manufacturing services needed for the final stages of the PISCES phase I clinical trial. The value of the contract was not disclosed.

Angel Biotechnology’s acting chief executive Dr Stewart White said: "Angel is very proud to be providing ReNeuron with additional manufacturing support to complete this ground breaking phase I clinical trial.  

“This contract is further recognition of the strong partnership between Angel and ReNeuron, and also reaffirms both companies commitment to provide solutions for a real clinical need."

The final patient in the second dose cohort of PISCES was treated last month and the Glasgow site has also identified potentially eligible patients for all of the remaining high dose cohorts in the study.

ReNeuron said the phase II clinical study of ReN001 will follow successful completion of the remaining high dose cohorts in the PISCES study within the next 12 months.

Connemara Mining (LON:CON) said this morning it had completed an airborne survey over a block of five licences in the Wicklow and Wexford areas of Ireland which may have uncovered previously unknown potential gold targets.

The work is part of a joint venture between Connemara and Hendrick Resources of Canada under which the latter will earn a 75 per cent interest in the licences by spending €1 million.

The magnetic, very low frequency and radiometric survey is being processed by Terraquest in Canada. 

Initial analysis carried out on the raw data by Hendrick in Canada indicates the presence of previously undetected blind targets.  Final results are due within six weeks.

Connemara chairman John Teeling: "Gold in the Wicklow hills has been known for over 200 years but finding commercially viable deposits is a far more complicated issue.  

“Dale Hendrick, an acknowledged expert in evaluating airborne survey results has done some work on the raw data from the survey.  

“He believes that he has identified previously unknown 'potential' targets for gold deposits.  

“These are targets that could not be identified from conventional ground based exploration.  

“Final results from Terraquest are due within six weeks following which the next stage of exploration will be decided."

Geomerics, the computer games software associate of ANGLE (LON:AGL), has received the final milestone in a £2.3 million corporate partnership deal.

Geomerics’ speciality is Enlighten, a special effect for computer games that enables real-time games to be shown with realistic lighting.

Customers include industry giant Electronic Arts, which used Enlighten in its best seller Battlefield 3.

In March, ANGLE said three new customers had also signed up to use the product, which is generically known as middleware.

ANGLE, which has a 31 per cent stake in Geomerics, said the corporate partner and Geomerics continue to work closely together.

The name of the Corporate Partner and some of the terms of the deal, which was first announced in July 2010, remain subject to strict confidentiality, it added. 

The partnership deal included an investment in Geomerics of up to £2.3 million, of which approximately £1.0 million was subject to the achievement of certain milestones. 

The partnership has resulted in the development of new capabilities to make Geomerics products 'next generation technology ready,' ANGLE added today. 

Andrew Newland, chief executive of ANGLE, said:  "We are pleased to see the completion of the third and final milestone and the widening recognition and adoption by the computer games market of Enlighten.”

Last month, ANGLE said it was to re-position itself as a specialist medical diagnostics company that will showcase Parsortix, its cancer cell screener product and which is the jewel in the crown of the ANGLE intellectual property portfolio.

Tullow Oil (LON:TLW) this morning confirmed that a drill ship has been contracted to begin work next month on further exploration of the Zaedyus discovery in French Guiana.

It follows the drill success late last year. The plan initially is to appraise the Zaedyus-1 well and explore for deeper objectives. This will be followed by an exploration wildcat well.

“Planning is also ongoing to acquire two large 3D seismic surveys,” Tullow added in a statement this morning. 

Shell (LON:RDSB) with a 45 per cent stake in Zaedyus is taking operatorship of the breakthrough discovery, which is a facsimile of the producing Jubilee field off the coast of Ghana.

Tullow is the next biggest shareholder with 27.5 per cent and Total has 25 per cent. 

Zaedyus is likely to make a material impact on the prospects of the two smallest shareholders, Northern Petroleum (LON:NOP) and Wessex Exploration (LON:WSX), which have a combined 2.5 per cent.

The Zaedyus update was contained in a broader progress report from Tullow in which it said it expects daily oil production to be in the range of 78-86,000 barrels for the full year. 

The Times

Tiddler to Watch: DDD Group rose 7.7% to 24p, after an encouraging sales update. It has sold more than 1.3 million licences for its software to convert two-dimensional games, videos and photographs on computers into 3-D to the likes of Sony, Intel and Samsung. More than a million copies of the mobile phones version have been bought in nine months.

Bet of the Day: Takeover rumours about Invensys have grown more shrill of late. Some of the biggest industrial companies in Europe and America supposedly are weighing bids. Thus far, Invensys has kept silent. Spread-betters bought the controls group on hopes that it may say more alongside annual results.

Gilts: U.K. Government bonds marked time. Early losses after the Eurozone just avoided recession were recouped when Greece failed to form a government, taking it closer to bankruptcy and an exit from the Eurozone. The June gilt future settled 5 ticks lower at 118.26. In the cash market, the yield on ten-year gilts rose 2 basis points to 1.90%.

Eurozone ready for life after Greece: Greece was served notice that the Euro can survive without it as Athens prepared for another general election that could end the countrys membership of the single currency. Europe must prepare for Greece to return to the drachma if voters return a left-wing government bent on ripping up the terms of the countrys international bailout, politicians warned.

Angry employers tell coalition empty words are not enough: Manufacturers have delivered a withering judgment on the Governments industrial policy, accusing the coalition of empty rhetoric that has delivered stagnating economic growth.

Time to look away from the Eurozone: Exporters are curbing their reliance on Euro area markets and boosting sales of cars and other products in countries including China. The share of British exports destined for the Eurozone slipped to its lowest level on record in the first quarter of 2012, at 45.3%, according to analysis of official figures by Citigroup.

Tesco Managers to have bonuses trimmed: Thousands of Tesco stores Managers are paying the price for the supermarkets disappointing trading by having their annual bonus cut by more than 80%. Philip Clarke wrote to 5,000 of its most senior staff warning that their performance-related bonuses would be slashed from an average of 12,000 last year to as little as 2,000 this year.

Heavy April showers have affected building suppliers: Marshalls has blamed the five and half inches of rain in April and weaker post-Easter demand for reduced sales in the first four months of the year. The building materials company, which supplies natural stone and concrete products to the construction sector, said that revenues had fallen to 106 million, from 109 million last year.

Councils take their cash out of Santander: Councils have been taking millions of pounds out of British Santander branches because of fears about the weakening Spanish economy. Arlingclose, an investment adviser to a fifth of Britains 450 councils, said that deposits with Santander U.K. had fallen from 600 million to 400 million since 2010.

Redrow Boss steps in after damp response to fundraising: The Founder and Chairman of Redrow was forced to increase his stake in the housebuilder he founded more than 35 years ago. Steve Morgan, who also owns Wolverhampton Wanderers FC, lifted his holding to 40.4% after Redrow investors took up only a quarter of the 60.2 million of new shares on offer through a fundraising exercise.

Apple and publishers to face trial over price-fixing: Apple and five book publishers have failed to persuade a judge in the United States to throw out a lawsuit by consumers accusing them of conspiring to raise e-book prices two years ago. The main allegation is that the publishers worked together to reduce competition, with Apple co-ordinating the agreement.

The Independent

Campari bounces back in home market despite Italian woes: Recession-weary Italians raised a few more glasses of Camparis trademark red aperitif in the first three months of the year, helping the group to post a 2.8% rise in underlying sales. Gruppo Camparis sales in Italy, which accounts for more than a third of total revenues, had disappointed investors in the final quarter of 2011, falling 1.6% as the Eurozone deBT crisis depressed consumption in the Eurozones third largest economy.

Ronald Cohens boost for Cloud.IQ: Sir Ronald Cohens Bridges Ventures invested in the technology company Cloud.IQ. Bridges Ventures, the private equity firm which is behind businesses including The Gym, invested in the marketing technology business through its sustainable growth fund. Cloud.IQ was founded seven years ago and is part of a cluster of digital businesses based in east London around the so-called Silicon Roundabout.

Slough takes over as fraud hotspot: Slough is officially Britains identity fraud capital, overtaking London for the first time. The Berkshire commuter towns residents are targeted about four times more than the national average, according to the credit checking group Experian.

900 jobs at risk as administrator seeks deal to rescue Essex refinery: Up to 900 jobs at the bankrupt Coryton oil refinery in Essex are hanging in the balance. The Thames estuary refinery which supplies a fifth of the petrol sold in London and the South-east ran into trouble in January when its Swiss parent company, Petroplus, filed for insolvency.

Italys banks stung by mass downgrade: Italys banking and business community responded angrily to a mass downgrade of Italian banks by the credit rating agency Moodys, calling the move irresponsible and an assault on the austerity-hit country as it struggles with an economic crisis.

Wonga to open in Africa: The short-term loans provider Wonga has chosen South Africa for its first step in international expansion after trials showed that the countrys consumers liked its online service. Wonga provides short-term loans online to tide customers over until payday. It said it would offer loans of between R100 and R2,000 (7.50 to 150) for periods of up to a month to South African customers.

Financial Times

Lufthansa loss brings change in the air: Christoph Franz is seeking to bring some order to the sprawling empire created by his predecessors. Lufthansas Chief Executive is busy selling assets and cutting costs at Europes largest airline by revenue after it slipped to a 13 million net loss in 2011, his first year in charge.

Bankers focus on reform-minded French duo: Michel Barnier is eager to advertise his independence from Frances new Socialist President. The enemy is not finance, Mr Barnier states, bluntly rejecting one of Franois Hollandes most arresting pieces of campaign rhetoric.

Worldspreads and FSA alerted to alleged fraud: Worldspreads board and the Financial Services Authority were alerted to an alleged fraud at the groups former Irish unit three months before Worldspreads filed for administration in March, citing accounting irregularities. The board of Marketspreads, formed by a 2009 buyout of Worldspreads Irish business, wrote to the Worldspreads board in December 2011 and January 2012 to alert them to the discovery of apparent fraud and false accounting at the division before its sale.

Laird names David Lockwood as new Chief: Laird, the FTSE 250 electronics group, which supplies companies such as Apple, has completed its five-month search for a Chief Executive by hiring David Lockwood from BT Global Services. Mr Lockwood, who has previously worked at BAE Systems, Thales and Marconi, will succeed Peter Hill, who stepped down suddenly in November because of ill health.

AstraZeneca among suitors eyeing Amylin: Amylin Pharmaceuticals, the U.S. maker of diabetes-focused medicines, has attracted a string of potential suitors, including Anglo-Swedish group AstraZeneca, people close to the situation said. U.S. drugmakers Pfizer, Bristol-Myers Squibb and Merck, Frances Sanofi, Japans Takeda, and Switzerlands Roche have also signed up to participate in a sales process for the group, requesting information and signing non-disclosure agreements, the people said.

Big find boosts Mozambique gasfield: Mozambiques ambitions of becoming a major exporter of liquefied natural gas have been boosted by the announcement of another large find off its coast by a consortium led by Anadarko Petroleum of the U.S. The discovery could add up to 20 trillion cubic feet (Tcf) of recoverable gas to a resource base previously estimated at more than 30tn recoverable units.

Lex:

Coty / Avon: loss of face: Lawyers, analysts and journalists were kept busy. And in the end, Cotys limp bid for the flailing cosmetics seller Avon ended with a pouty letter. We received a two sentence email indicating, without explanation, that Avons board would need another week to consider our request, Coty complains. Avon may seem the obvious choice. Investigations into bribe-paying abroad and inappropriate contact with analysts at home are the garish lipstick on the pig of the companys falling profitability. In the two years before Cotys offer became public, Avons shares trailed the wider market by 65%. Coty, for its part, never secured committed financing, never made a firm offer and never showed any willingness to go hostile, even if pushed. Avons operational struggles and legal issues make it a hard company to value, unless Avon was willing to allow non-public information to be scrutinised. If Avons management cannot get its shares moving up, then its shareholders will need to mention only one number $24.75, Cotys final offer to prove that they have been badly used.

Bank capital rules: one step at a time: Brussels and compromise go hand in hand. No surprise, then, that EU Finance Ministers have finally backed new bank capital rules implementing internationally agreed Basel III standards within the bloc which no one thinks ideal. The most publicised compromise is the U.K.s acceptance of rules which set fixed, rather than minimum, standards. In return, though, it has secured the right to impose additional systemic risk buffers of up to 5% on top of the 7% core tier one ratio demanded under Basel without too much EU interference. This will not end arguments over whether it is preferable to let countries set their own higher bank capital standards or to have a uniform rule-book. But at a practical level, the compromise does give national governments reasonable flexibility. Less satisfactory is the temporary sidestepping of double-counting challenges posed by the bancassurance model. And while Basels strict criteria for determining what counts as core tier one capital have been followed, the language may yet allow for some silent participations hybrid capital favoured by Germany to count.

Germany: model citizens: It is easy to sympathise with those Germans who look at their floundering Eurozone brethren and say, Why cant you be more like us? Data on Tuesday showed that the German economy expanded 0.5% quarter on quarter in the first three months of 2012. It was the only big Eurozone economy to grow, and helped the bloc to avoid a technical recession. The growth was driven by net trade, the traditional strength of corporate Germany. The Dax index is up 10%, compared with a fall of 2% for the FTSE 100 and the CAC 40. Only the S&P 500 provides any competition up 6%. German companies have been quietly globalising for years, and now have a strong and growing presence in markets outside both Germany and Europe. Siemens generates only 15% of its global revenues in Germany, for example. Household products group Henkel generated 40% of its 4 billion of first quarter revenue in emerging markets. The cosmetics group Beiersdorf makes at least half of its nearly 6 billion in annual revenue outside Europe.

Lombard:

Barnier outsources dirigisme on bank pay: Members of the European Parliament have proposed a crude 1:1 cap on the ratio of bankers bonuses compared with their salaries. Inspired by the U.K.s so-called shareholder spring, Michel Barnier, head of internal markets at the commission, has cooked up something cleverer. The suBText of such Owner empowerment is as ideological as anything MEPs could dream up. The earnings differential between a bank Boss and a counter clerk about 75 times in the U.K. worries the bystander in proportion to their belief in money as a measure of social equity. For the investor, compensation ratios are more meaningful. One should add that the usual terms and conditions apply to this, as to other EU proposals. It may be diluted or shot down at any point in a bewildering round of votes, summits and trialogues. The EU has traditionally steered clear of pay regulation. This would be an odd place to start, even by proxy. Still, such political flourishes should not be dismissed too casually.

Plainer sailing: Sir Francis Drake, whose statue surveys the sea from Plymouth Hoe, was an adventurer to the end. But full year results from Babcock International, the group that runs the dockyard in nearby Devonport, suggest that the buccaneering days of Chief Executive Peter Rogers may be over. Since Mr Rogers took over in 2001 he has transformed a forgettable small-cap engineering services group into a big presence on the FTSE 250. Babcock bought the dockyard, where it maintains nuclear submarines, for 350 million in 2007. The high-risk 1.36 billion purchase of VT, another maritime group, followed in 2010. A full years contribution from VT lifted statutory profits before tax 56% to 173 million. Net deBT is 1.8 times earnings, compared with 2.8 times at peak, creating scope for acquisitions. Mr Rogers is more interested these days in bidding for contracts and diversifying out of defence.

The Daily Telegraph

RBS investors say Stephen Hester not paid enough: Royal Bank of Scotlands Chief Executive, Stephen Hester, is not being paid enough for his work, according to some of the taxpayer-backed lenders largest shareholders. Despite receiving a compensation package this year worth 3.3 million, the investors said Mr Hesters pay did not represent the commercial rate for the job he is doing.

George Osborne wins battle for tougher rules on U.K. banks: The agreement struck in Brussels between European Union Finance Ministers will allow the U.K. to implement key policies recommended by the Independent Commission on Banking (ICB) last year, such as retail ring-fences and 10% capital buffers, designed to protect the country from another financial crisis.

Builders report paltry sales under NewBuy: Britains top builders say they have so far sold less than one home apiece under the Governments flagship scheme to boost the housing market, two months after its launch.

New U.K. nuclear plants threatened by EU state aid rules: A new generation of U.K. nuclear plants is in jeopardy because of EU regulations that are inflating costs and may deter investment, MPs and energy suppliers warned.

The Questor Column:

Petrofac growth on track: In the current year, management still expects net profit growth of at least 15%. Most of the growth over the next few years is expected to come from the groups integrated energy services (IES) unit, which provides production services to national oil companies (NOCs). The business aims to provide the technological know-how to oil-rich countries that lack these skills. The unit is headed by Andy Inglis, BPs former head of exploration and production. IES, which last year won the groups first contracts in Mexico, is applying for two further production enhancement contracts in the country. The unit recently signed a partnership agreement with U.S. giant Schlumberger, and it is possible the two groups will ultimately bid together for the contracts. First tipped at 468p in March 2009, the shares were last recommended as a buy on 14 December last year at 14.43, and they are up 8% since then, compared with a FTSE 100 up 1%. Since that time analysts have also been marking up the share price. In December the average price target of analysts monitored by Bloomberg was 17.40. It now stands at 19.38. Petrofac at 15.63 -32p. Questor Says Hold.

Avanti orbit looks inviting as satellite launch approaches: Things have been going reasonably well at the group as a trading update released showed but the shares took a bath last year on negative sentiment. The company was subject to what is known as a bear raid. A high profile City player took a significant short position in the shares and then proceeded to make this fact known to the market. Avanti confirmed that in the four-month period to 30 April it had added 42.3 million of backlog. These are contracts signed for bandwidth on both HYLAS 1 and 2. This brought the total backlog to 213 million and Avanti said its pipeline of potential sales stood at 529 million. The company is currently loss-making, but it is expected to move into profit next year, with earnings rising quickly thereafter. The 2013 multiple is a very heady 163 times, but this falls to 9.3 in 2014 and just 4.4 in 2015. Avanti Communications at 3133/4p -14 1/4p. Questor Says Buy.

The Guardian

Selling taxpayer stakes in RBS and Lloyds could take years: Selling off the taxpayer stakes in Royal Bank of Scotland and Lloyds Banking Group could take years, according to financial experts who also told a committee of MPs that banker bashing needed to stop to help the shares prices recover.

Avon shuns suitor Coty after total lack of engagement: The mass-market perfume maker Coty has dropped its $10.7 billion (6.65 billion) takeover bid for Avon Products, saying the U.S. beauty company missed a deadline to respond to its offer. Coty had been stalking the cosmetics company since March, when it made an unsolicited bid of $10 billion which had the financial backing of the veteran U.S. investor Warren Buffett.

Ferrari to launch its first hybrid car a snip at 527,000+: The Enzo hybrid will be the carmakers most powerful model and will cut fuel consumption by 40%. From horsepower to battery power, Ferrari is joining the growing ranks of green carmakers by launching its first ever hybrid vehicle at the end of the year.

Facebook raises float price after being swamped by investors: Price hiked to $34-$38 a share valuing social network at $104.2 billion and the most expensive U.S. Company to go public. The new price range is above the previous $28 to $35 guide, and makes Facebook the most valuable company ever to go public in the U.S. when it begins trading on the Nasdaq stock exchange on Friday.

Exports close U.K. trade deficit: The trade deficit in the U.K. shrank in March as exports to the U.S., China and Russia grew strongly, official figures show. The U.K.s trade deficit on goods and services was 2.7 billion in March, compared with 2.9 billion in February, while the deficit on goods alone was flat at 8.6 billion.

Daily Mail

Engineering support services group Babcock finds way to profit from austerity: Engineering and technology companies delivered some much-needed cheer to investors. Babcock International, the engineering support services group, rose 69.5p at 868.5p, after saying it is benefiting from austerity as governments sought to cut military spending and outsourced more work.

Superhero film Avengers Assemble set to take 624 million in box office receipts just three weeks after release: Superhero film Avengers Assemble, made by Disney and Marvel, is set to take $1 billion (624 million) in box office receipts just three weeks after its release. The movie, which stars Robert Downey Jr as Iron Man and Scarlett Johansson as the Black Widow, took in a record 129.5 million in its opening weekend in the U.S.

Broker Views:

Mariana Resources Ltd: Fox-Davies Capital maintained a Buy rating on the stock, with a target price of 22.00p

Minera IRL Ltd: Kallpa Securities SAB maintained an Overweight rating on the stock, with a target price of 144.10p

IQE: Canaccord Genuity Corp maintained a Buy rating on the stock, with a target price of 65.00p

French Connection Group: Oriel Securities Ltd upgraded the stock to Buy and increased the target price to 82.00p

BT Group: Espirito Santo Investment Bank Research upgraded the stock to Neutral and increased the target price to 210.00p

International Consolidated: JPMorgan downgraded the stock to Neutral and decreased the target price to 183.58p

Daily Express

Euro turmoil threatens the U.K.s exports: The Eurozones narrow escape from sliding back into recession failed to prevent further falls in the single currency and European stock markets as Greek political turmoil intensified. The gulf in Europes two-speed economy is widening as a 0.5% expansion in German output in the first quarter offset falls of 0.8% in Italy and 0.3% in Spain as the sovereign deBT crisis tightened its grip on peripheral economies.

Investors rescue JP Morgan Boss: Shareholders in investment bank JP Morgan backed embattled Boss Jamie Dimon by throwing out plans for a shake-up after a 1.2 billion trading loss. Investors rejected proposals to split Dimons joint Chairman and Chief Executive roles after he said the losses were self-inflicted and pledged change.

BA Owner is hit by turbulence: British Airways parent IAG went into a tailspin amid concerns over weakening Spanish trading and higher losses from its bmi airline acquisition. JP Morgan Cazenove caused the companys shares to lose altitude as it cut its rating from overweight to neutral, with brighter longer-term prospects overshadowed by the worsening commercial performance at its Iberia airlines Madrid hub.

G4S looks ahead to the next Olympics: More business from miners in Africa, Asia and Latin America plus oil companies are fuelling revenue at security firm G4S. G4S is risk-assessing new pipelines and refineries and protecting offshore rigs in oil, gas and mining projects in places such as Angola, Mozambique and Nigeria.

The Scottish Herald

Fresh criticisms over Cairns executive pay: Cairn Energy is facing fresh controversy about executive pay after a corporate governance specialist voiced renewed criticisms of the oil and gas firms executive pay policies.

Lees Director bans The Herald from meeting: The Director leading the controversial 5.6 million management buyout bid for Lees Foods banned The Herald from a shareholder meeting connected to the proposed takeover in an attempt to limit publicity about it.

F&C Edinburgh office key to fund managers fightback: F&C Asset Managements Edinburgh office has been positioned at the heart of a fightback by the troubled fund manager as it vowed to expand its investment trust business and increase its direct sales.

Anti-bank sentiment in politics hitting share prices: Standard Lifes Investment Chief Keith Skeoch has warned that the share prices of the part-nationalised banks are being hit by an anti-bank tone at the highest levels of politics.

Hi-tech Amor still on course to double turnover: Amor Group, one of Scotlands biggest home-grown technology survivors, is on course to double turnover in two years and has increased staff by 100 to 580 since last year, with 480 of them in Scotland.

The Scotsman

City big guns warn it may take five years to clear bank bail-out: Top City figures warned MPs it will take at least five years for taxpayers to break even on the 64 billion state bail-out of Royal Bank of Scotland and Lloyds Banking Group. The Treasury select committee also heard predictions that selling down the holdings may be done in up to ten stages.

Small firms bear brunt of big businesss failure to pay bills on time: Britains big companies are facing calls to sign up to a prompt payment code as it emerged that they owe smaller firms a record 35 billion in unpaid invoices. New research from Bacs Payment Schemes, the company behind direct debit, showed the average small firm was owed 45,000 at the end of 2011, against 39,000 six months earlier.

Retail: April showers wash away hope on the beleaguered high street: April was a washout for Scotlands retailers, with high street stores reporting their worst fall in sales for 13 years as the wet weather took its toll. Both total sales and like-for-like sales, which strip out newly-opened or extended stores, posted their largest year-on-year declines since 1999 when the Scottish Retail Consortium (SRC) began compiling its monthly sales monitor.

Eurozone crisis could widen U.K. trade deficit: Britains trade deficit could widen over the coming months as the Euro zone crisis stifles demand for exports, economists warned. Although the overall trade deficit on goods and services narrowed to 2.7 billion in March, exports to EU countries were virtually unchanged at 13.2 billion.

Shareholders win 16 million Cattles compensation: Shareholders who refused an offer of 1p a share for their stakes in sub-prime lender Cattles were celebrating a 16 million settlement. The group of 60 claimants has been locked in a legal battle with Welcome Financial Services, a subsidiary of Cattles, since its shares were suspended in 2009.

Norwegian group creates 300 Aberdeenshire jobs: Norwegian energy services firm Aker unveiled plans to create 500 jobs in Aberdeenshire over the next two years, swelling its headcount in the region beyond the 3,000 mark. The jobs boost, announced as part of First Minister Alex Salmonds visit to Norway, will filter through over the next two years and comes on top of 350 posts unveiled in August.

H&M hit by worst sales for three years: Budget fashion retailer H&M reported its worst monthly sales figures since 2009 as inclement weather and worsening economies in Europe hit demand for spring clothing. Total sales in April fell 1%, while like-for-like sales dropped 10% in the year, in both cases the biggest drop since August 2009.

Signs of light at last in CAP reform saga: Significant progress was made on the environmental proposals for the next Common Agricultural Policy with concessions being made but for U.K. politicians and farming leaders any moves were but a first step in achieving much more flexibility.

Enterprising move on pubs: Enterprise Inns, the U.K.s biggest pub landlord, has largely completed plans to dispose of a large chunk of its estate after raising 264 million from the sale of more than 1,000 venues over two years. The group, which had 6,143 leasehold and tenant pubs at 31 March, said it will continue to sell underperforming pubs but at more normal levels.

City A.M.

U.S. dollar soars to highest level since January: The longest greenback rally in over two and a half decades saw the dollar climb to its strongest level since January, as the U.S. currency is increasingly seen as a quick safe haven investment.

Worries for American GDP as retail sales stagnate in April: Sales at U.S. retailers barely rose in April as the boost from an unseasonably warm winter faded, official data showed, pointing to some loss of momentum in consumer spending early in the second quarter. Commerce department figures recorded a 0.1% rise in the month the smallest gain since December, held back by a decline in receipts from building materials and clothing stores.

Carlyle starts new era with profit decline: The co-head of Carlyle Group sought to play down the significance of quarterly reporting as the U.S. private equity firm posted a 26% decline in quarterly profit. Co-Founder and Co-Chief Executive David Rubenstein urged investors not to focus disproportionately on its quarter-to-quarter results after a disappointing first earnings report as a public company.

Hedge funds celebrate as Greece pays up: Opportunistic hedge funds were celebrating the trade of the century as Greek authorities agreed to pay out 435 million (346 million) of bonds that were not included in recent haircuts.

Senate renews Ex-Im Bank charter: The Senate voted to renew the U.S. Export-Import Banks charter through September 2014 and raise its lending cap to $140 billion, overcoming objections from conservative Republicans who wanted to shut the bank down.

Permira fund grew by a fifth last year: Private equity house Permira saw the value of its 9.6 billion (7.65 billion) fourth fund jump by more than a fifth last year despite global economic turmoil. The value of investments made so far in Fund IV rose 21% in 2011, according to the annual review, published. The fund began in September 2006 although not all of the cash has been spent.

Allianz profits jump despite Eurozone fears: German insurance giant Allianz reported a 40% jump in operating profit to 2.3 billion (1.8 billion) for the first quarter, but warned that its financial health depended on a successful outcome to the Eurozone crisis.

UK Market Snapshot

UK markets ended lower yesterday, as Greek leaders called new elections after the nations political leaders failed to form a coalition government heightening fears that it would face ejection from the Euro bloc. International Consolidated Airlines Group dropped 6.0%, after a broker downgraded its rating on the stock to Neutral from Overweight. Mining sector stocks, Kazakhmys, Vedanta Resources and Rio Tinto retreated between 2.9% and 4.1%, in line with the movement in base metal prices. Banks, Royal Bank of Scotland, Barclays and Lloyds Banking Group lost between 1.8% and 2.3%, as the risk appetite among investors dropped amid concerns about the banks exposure to the Euro zone debt crisis. The FTSE 100 shed 0.5% to close at 5,437.6, while the FTSE 250 fell 0.8% to settle at 10,722.5.

US Market Snapshot

US markets closed lower yesterday, amid reports that Greece would hold new elections in June after politicians failed to agree on a coalition government offset upbeat US economic data. Technology sector stocks, Hewlett-Packard and Intel retreated 2.5% and 0.5%, respectively. Home Depot lost 2.4%, after the company reported first-quarter sales that trailed market projections. Banks, Citigroup, Morgan Stanley and Bank of America fell between 0.7% and 1.2%. Avon Products tumbled 10.7%, after Coty withdrew its $10.7 billion bid to buy the company. Chesapeake Energy dropped 5.6%, after ratings agency, Standard & Poor's, downgraded the company's credit rating to BB- from BB. Freeport-McMoRan Copper & Gold, Alcoa and Chevron declined between 1.0% and 4.8%, tracking declines in commodity prices. The DJIA fell 0.5% to settle at 12,632.0, while the NASDAQ slid 0.3% to close at 2,893.8. The S&P 500 slipped 0.6% to settle at 1,330.7.

Europe Market Snapshot

Other European markets finished lower yesterday, amid concerns about the situation in Greece after it failed to form a government overweighed reports of a stronger-than-forecast first quarter GDP growth in Germany. FLSmidth & Co declined 8.4%, after reporting first-quarter net income and revenue that missed market estimates. Julius Baer Group fell 6.1%, as revenue from its assets under management fell in the first four months of the year. Banks, Commerzbank, Societe Generale and Deutsche Bank retreated between 1.7% and 5.2%, due to a rise in risk aversion among investors. Merck lost 2.8%, after the company reported a 49.0% decline in its first-quarter profit. Auto stocks, Daimler, Renault and Volkswagen fell between 0.8% and 1.5%. The FTSEurofirst 300 index declined 0.7% to close at 997.7. Among other European markets, the German DAX Xetra 30 fell 0.8% to close at 6,401.1, while the French CAC-40 shed 0.6% to settle at 3,039.3.

Asia Market Snapshot

Markets in Asia are trading lower this morning, tracking overnight losses in the US markets, amid news that Greece would be facing fresh elections next month after a failed attempt to form a government. Additionally, reports showing Japanese machinery orders fell in March also weighed on investor sentiment. In Japan, Nichii Gakkan is trading 11.2% lower, after its full-year operating profit forecast missed market estimates. In Hong Kong, Renhe Commercial Holdings is trading 4.6% lower, amid reports that the companys stock would be removed from one of the MSCI indexes. Energy stocks, PetroChina and Cnooc are trading 2.9% and 2.1% lower, respectively, in line with a fall in crude oil prices. In South Korea, Samsung Electronics and LG Electronics are trading 3.9% and 0.9% lower, respectively, on concerns over demand outlook. The Nikkei 225 index is trading 0.9% lower at 8,820.8. Hang Seng index is trading 2.5% down at 19,394.3, while the Kospi index is trading 1.3% lower at 1,873.5.

Commodity, Currency and Fixed Income Snapshots

Crude Oil

At 0331GMT today, Brent Crude Oil one month futures contract fell 0.84% or $0.94, to trade at $111.30 per barrel, after the American Petroleum Institute reported that crude-oil inventories rose 6.6 million barrels for the week ended 11 May 2012. Additionally, fears about the escalating Euro-zone debt crisis, after the Greek Presidents attempt to form a coalition government failed weighed on market sentiment. Yesterday, the contract gained 0.60% or $0.67, to settle at $112.24 per barrel, on better-than-forecast German first-quarter growth data.

Gold

At 0331GMT today, gold futures contract lost 1.27% or $19.80, to trade at $1,537.30 per ounce, after a second Greek election was called for as attempts to form a government failed. Yesterday, the contract fell 0.25% or $3.90, to close at $1,557.10 per ounce, as the dollar strengthened against other major currencies, decreasing the appeal of the precious metal.

Currency

At 0331GMT today, the EUR weakened against the USD, marginally losing 0.05%, to trade at $1.2729, after Greeces political leaders failed to form a coalition government, deepening speculation that the country would have to leave the Euro bloc. Yesterday, the EUR fell 0.74% versus the USD, to close at $1.2735, after retail sales in the US rose 0.1% in April, following a revised 0.7% increase recorded in March. Market had expected retail sales to increase 0.1% in April.

At 0331GMT today, the GBP weakened slightly against the USD, losing 0.07%, to trade at $1.5973, after the Federal Reserve Bank of New York reported that its General Business Conditions Index rose to 17.1 in May, compared to 6.6 in the previous month. Yesterday, the GBP lost against the USD, falling 0.71%, to close at $1.5985, after the US Housing Market Index jumped to 29.0 in May, compared to a downwardly revised reading of 24.0 recorded in April. Market had expected the index to rise to 26.0 in May.

Fixed Income

In the US, long term treasury prices rose yesterday, pushing the yields on 30-year bond lower, amid concerns over the future of Greece's austerity steps on reports that the nation would face fresh election after it failed to form a coalition government. Yesterday, yields on 10-year notes lost 2 basis points to 1.76%, while yields on 2-year notes remained flat at 0.29%. Meanwhile, 30-year bond yields decreased 4 basis points to 2.91%.

Key Economic News

UK trade deficit narrowed in March

On a seasonally adjusted basis, the UKs trade deficit in goods and services shrank to 2.74 billion in March from 2.95 billion in February. Market had expected the trade deficit to narrow to 2.90 billion in March. The goods trade deficit inched down to 8.56 billion in March from 8.59 billion in February. Market had expected a deficit of 8.40 billion in March. Meanwhile, the visible trade deficit with non-EU countries fell to 4.11 billion in March from 4.87 billion in February. Market had forecasted a deficit of 4.65 billion in March.

German GDP grew more-than-expected in 1Q FY2012

On a seasonally and calendar adjusted basis, the Germanys Gross Domestic Product (GDP) grew 0.5% the first quarter of 2012(1Q FY2012), compared to a drop of 0.2% recorded in the previous quarter. Market had expected Germanys GDP to rise 0.1% in 1Q FY2012.

German economic sentiment fell more-than-expected in May

The ZEW Economic Sentiment Index in Germany fell to a reading of 10.8 in May from a reading of 23.4 recorded in April. Market had expected the index to decline to a reading of 19.0 in May. Meanwhile, the Current Situation Index unexpectedly rose to a reading of 44.1 in May from a reading of 40.7 posted in April. Market had expected the index to decline to a reading of 39.0 in May.

Frances economy stalled in 1Q FY2012

On a seasonally adjusted quarter-on-quarter basis, Frances Gross Domestic Product (GDP) remained flat in 1Q FY2012, compared to a 0.1% growth recorded in the previous quarter, revised down from 0.2%.

Frances consumer prices rose less-than-expected in April

On a year-on-year basis, the Consumer Price Index in France rose 2.1% in April, compared to a 2.3% increase reported in March. Market had expected the index to rise 2.2% YoY in April. On a monthly basis, the CPI rose 0.1% in April, compared to a 0.8% growth recorded in the previous month. Market had expected the index to rise 0.2%MoM in April. Meanwhile, on an annual basis, the Harmonised Index of Consumer Prices (HICP) rose 2.4% in April, slower than the market estimated growth of 2.5% in April. The core inflation rate was 1.4% during the month.

Frances non-farm payroll employment remained unchanged in 1Q FY2012

On a quarterly basis, non-farm payroll employment in France rose 0.1% in the first quarter of 2012 (1Q FY2012), compared to a 0.1% fall recorded in the previous quarter. On a yearly basis, salaried employment remained unchanged in 1Q FY2012.

Euro-zone GDP remained flat in 1Q FY2012

On a quarterly basis, the GDP in Euro-zone remained flat in 1Q FY2012, compared to a 0.3% drop recorded in 4Q FY2011. Market had expected the GDP to drop 0.2% in 1Q FY2012). On a seasonally adjusted yearly basis, GDP remained unchanged in 1Q FY2012, following a 0.7% growth recorded in the previous quarter. Market had expected the GDP to fall 0.2% in 1Q FY2012.

US consumer prices remained flat in April

On a monthly basis, the Consumer Price Index (CPI) in the US remained flat in April, in line with market expectations and compared to a 0.3% increase recorded in March. On an annual basis, CPI rose 2.3% in April, compared to a 2.7% rise recorded in March. Additionally, on a monthly basis, the core CPI, excluding food and energy prices, edged up 0.2% in April, in line with market estimates and compared to a same rate of increase recorded in the previous month.

US business inventories rose less-than-expected in March

On a monthly basis, total business inventories in the US rose 0.3% in March, compared to a 0.6% increase recorded in February. Market had expected inventories to increase 0.4% in March.

US retail sales rose in line with market estimates in April

On a monthly basis, retail sales in the US rose 0.1% in April, following a revised 0.7% increase recorded in March. Market had expected retail sales to increase 0.1% MoM in April, compared to a 0.8% growth originally reported in the previous month.

US homebuilder confidence rose more-than-expected in May

The National Association of Home Builders (NAHB)reported that the US Housing Market Indexjumped to a reading of 29.0 in May, marking its highest level since May 2007 and compared to a downwardly revised reading of 24.0 recorded in April. Market had expected the index to rise to a reading of 26.0 in May, compared to a reading of 25.0 originally reported in the previous month.

New York Manufacturing Index rose more-than-expected in May

The Federal Reserve Bank of New York reported that its General Business Conditions Index rose to a reading of 17.1 in May, compared to a reading of 6.6 posted in April. Market had expected the index to rise to a reading of 10.0 in May.

OECD Unemployment Rate Remains Stable

The unemployment rate in the Organisation for Economic Cooperation and Development (OECD) area remained unchanged at 8.2% in March, as increasing jobless rates in some euro area countries were offset by declines in North America. Unemployed has remained in the current level since February 2011.

Japanese consumer sentiment weakened in April

The Consumer Sentiment Index in Japan dropped to a reading of 40.0 in April, compared to a reading of 40.3 recorded in the previous month. Market had expected the index to rise to a reading of 40.8 in April.

Japan core machineorders fell less-than-estimated in March

On a seasonally adjusted monthly basis, core machine orders in Japan fell 2.8% in March, compared to a downwardly revised 2.8% increase recorded in February. Market had expected machine orders to fall 3.5% MoM in March. On a yearly basis, core machine orders fell 1.1%, compared to a 8.9% increase recorded in the previous month. Market had expected machine orders to rise 4.4% YoY in March.

Japan Tertiary Industry Index fell more-than-expected in March

On a seasonally adjusted monthly basis, the Tertiary Industry Index in Japan fell 0.6% in March, compared to a flat reading reported in February. Market had expected the index to fall 0.4% MoM in March.

Financial bookmakers are expecting another sell-off in London. The FTSE 100 is set to open at 5,383, down 54 points (one percent) from Tuesday’s close.

The UK’s blue chip index shed 27 points yesterday after coalition talks between give parties called by president Karolos Populias failed, forcing the country to hold a new election.

Greek voters will head to polls in June, which means the markets are facing another month of the Greek political turmoil.

It has been reported that the anti-bailout Coalition of the Radical Left, also known as Syriza, has gained support since the last election on May 6 and is likely to win in June, which could put Greece’s membership in the euro zone in jeopardy.

“So for now, the market is starting to accept the current Greek deal is unlikely to survive in its current form and a best case scenario would see more concessions,” said chief market analyst at City Index Peter Esho.

“A worst case scenario is not being priced into the market but a new dangerous level of political discussion is growing – Greece’s elected and increasingly popular left leaning politicians argue the Euro zone is unwilling to let Greece go and so better concessions should be negotiated.

“The market might find this a little too overbearing, putting more pressure on risk assets in the near term.”

Traders will have a raft of US data to digest today including an update on housing starts and building permits for April and minutes form the latest meeting of the Federal Open Market Committee (FOMC).

A Bloomberg poll predicted a 4.7 percent increase in housing starts to an annualised rate of 685,000.

Weekly oil inventories data from the Department of Energy will also be of interest.

In the UK, the Office for National Statistics will release first quarter employment data this morning.

Across the Atlantic, the Dow Jones Industrial Average (DJIA) dropped 63 points (0.5 percent) to end the session at 12,632 and the broader S&P 500 index shed 7.5 points (0.55 percent) to close at 1,330.

Likewise, Asian markets were in selling mode today. Japan’s benchmark Nikkei 225 index tumbled 144 points (1.6 percent) to 8,756 and China’s Shanghai Composite Index was down 17.5 points (0.75 percent) at 2,357 at the end of the session.

Ventnor Resources (ASX: VRX) is on the hunt for deeper copper mineralisation at its Thaduna and Green Dragon copper project below the current drill depth of 300 metres with plans to undertake down hole electromagnetic (DHEM) surveys.

A recent four hole, 1,772 metre deep reverse circulation pre-collared diamond drill hole program was designed to test the depth potential below the stronger zones under the existing Thaduna pit. 

Importantly, mineralisation encountered in the deep drilling justifies additional investigation of the potential for deeper mineralisation.

So far drilling has intersected mineralised structures at a vertical depth of 300 metres at Thaduna and 200 metres at Green Dragon.

Bruce Maluish, managing director, commented:

“From the mineralisation we have seen in the recently drilled diamond core, we are encouraged to survey these holes with DHEM. 

“This technique can target the search for deeper mineralisation below our current drill depth of 300 metres below the surface.”

In combination with the Thaduna program, two holes at Green Dragon will also be DHEM surveyed to test for deeper conductors.

It is expected that this DHEM program will map the conductive mineralised structure in excess of 100 metres away from known mineralisation. 

If successful, Ventnor is planning follow up drilling to increase the known strike length and depth of mineralisation.


Exploration progress

Highlighting the progress being made at Thaduna and Green Dragon, to date a total of 149 reverse circulation drill holes for 19,672 metres and 19 diamond tails for 2,317 metres has been completed at Thaduna.

Meanwhile, at Green Dragon a total of 90 reverse circulation holes for 11,703 metres and two HQ diamond holes for 390 metres has been completed.

Ventnor is targeting a JORC Resource to 200 metres below surface at both prospects by the end of July, following the completion of the current phase four drilling program in mid-June.

Strategically located

The region in which Thaduna and Green Dragon is located is rapidly turning into one of the biggest, if not the best, emerging copper districts in Australia.

Highlighting the prospectivity, Sandfire Resources' (ASX: SFR) massive De Grussa project is just 40 kilometres away, with a group of explorers in the region discovering high grade copper during 2011.


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