column http://www.proactiveinvestors.co.uk Proactiveinvestors column RSS feed en Wed, 13 Dec 2017 09:02:07 +0000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) Today's market view - Copper holds despite China credit growth data and FOMC meeting http://www.proactiveinvestors.co.uk/columns/sp-angel/29099/today-s-market-view-copper-holds-despite-china-credit-growth-data-and-fomc-meeting-29099.html Anglo American (LON:AAL) – De Beers diamond sales remain firm
Gem Diamonds (LON:GEMD) – Ghaghoo sale discussions ended – further negotiations underway
Premier African Minerals (LON:PREM) –Latest drilling from Zulu and RHA update
Rainbow Rare Earths Ltd (LON:RBW) – Raising £2.8m for growth plans at Gakara
Savannah Resources (LON:SAV) – Savannah commissions small 20tph pilot plant on Mutamba mineral sands project in Mozambique
W Resources (LON:WRES) – Potential US$30m term loan for La Parilla

Electric Vehicle sales may lose power as China scales back sUBSidies
• Even as long term confidence in role of electric cars grows a great deal of uncertainty remains for raw material producers as China scales back its car sUBSidies and technology that powers the vehicles evolves potentially slashing demand for some battery materials
• Carmakers are already planning to use less cobalt shifting ratios in favour of nickel due to supply chain risks and higher price levels

Dow Jones Industrials  +0.23% at 24,386
Nikkei 225   -0.32% at 22,866
HK Hang Seng   -0.63% at 28,782
Shanghai Composite    -1.25% at 3,281
FTSE 350 Mining   -0.25% at 16,808
AIM Basic Resources   +0.97% at 2,579

Economics
US – The US$ index and precious metals are little changed this morning as the FOMC are holding the last policy setting meeting for this year.
• Both Dow (24,386) and S&P500 (2,660) closed at record levels on Monday led by gains in energy stocks and tech sector.
• The US Treasury latest economic growth projections show that tax cuts may generate around $1.8bn of extra tax revenue over 10 year period.
• The review says the economy will grow at 2.9% per annum over 10 years which is 0.7pp stronger compared to previous predictions.
• The Treasury expects half of the pick up in growth rates to be attributable to a reduction in corporate tax rate (20% down from 35%) with the balance of gains coming from changes to individual and pass-through businesses taxation, regulatory reform, infrastructure development and welfare reform.

Germany – CDU representatives are meeting with the SPD for initial talks over the potential to from the “grand coalition” this Wednesday.
• SPD leaders will decide on Friday whether to launch the process of formal negotiations.

UK – Inflation continued to accelerate through November hitting the strongest level in more than five years.
• The data marginally exceeded market estimates and latest BOE projections for 3.0% in Q4/17.
• Inflation is expected to level off once the effect of the 18% depreciation in the sterling since late 2015 falls away with the BOE guiding for CPI at 2.4% in Q4/18 and 2.2% in Q4/19 and 2.1% in Q4/20.
• Additional pressure came from higher energy prices.
• Input prices are reported to have climbed 7.3%yoy with manufacturers absorbing some of the increase forced by industry competition passing through less than a half of the increase to consumers.
• Mark Carny will now need to write a letter to Chancellor of the Exchequer explaining why inflation is running more than 1pp above the target 2% rate.
CPI (%mom/yoy): 0.3/3.1 v 0.1/3.0 in October and 0.2/3.0 forecast.

South Africa – The National Prosecuting Agency (NPA) extended the deadline for President Zuma to make representations to prevent the corruption charges being brought against him to 31 January.
• The 783 charges against Zuma relate to a R30bn government arms deal arranged in the late 1990s which were then dropped by the NPA before Zuma ran for the presidency.
• The High Court reinstated charges last year with the Supreme Court upholding the decision in October, rejecting an appeal by Zuma and calling NPA decision to set aside the charges as “irrational”.
• Additionally, the High Court ruled that the appointment of the chief state prosecutor by Zuma in 2015 should be considered invalid and should be replaced immediately.
• The President filed an appeal with Abrahams, the chief prosecutor, to remain in office until the appeal is determined.

Currencies
US$1.1788/eur vs 1.1746/eur yesterday.  Yen 113.40/$ vs 113.54/$.  SAr 13.676/$ vs 13.683/$.  $1.337/gbp vs $1.351/gbp.
0.753/aud vs 0.751/aud.   CNY 6.617/$ vs 6.617/$.

Commodity News
Industrial cuts boost Chinese metals
• Effective supply cuts linked to China’s environmental crackdown are leading to great import demand and boosting Shanghai base metal futures. The pollution action plan devised in 2013, which includes the 2+26 plan forcing the closure of aluminium, steel and other industries during the winter heating season from mid-November to March, aims to curtail concentrations of hazardous airborne particles (PM2.5) by 25%.
• UBS see China’s focus on reducing air, land and water pollution to be a major driver for commodities, boosting the importance of higher-quality product and enhanced imports.

Precious metals:         
Gold US$1,244/oz vs US$1,250/oz yesterday
• Gold price climbs from yesterday’s five-month intraday low of $1,240.81/oz, with market participants seeing the key $1,240 support level a short-cover position ahead of the Federal Reserve meeting. However, support for the metal maybe short lived as outgoing Chair Janet Yellen is set to signal that more interest rate increases are due in 2018 after raising the Fed’s benchmark by a quarter of a percentage point.
• Further interest rate increases would steadily grind gold lower, with hawkish comments drawing the metal down toward $1,205-$1,210 forecast INTL Fcstone analyst.
• Market analyst at Oanda linked yesterday’s decline in gold price to increased access to cryptocurrency trading as the CBOE Bitcoin futures went live, suggesting “it is no coincidence that the day that Bitcoin futures officially started trading, gold prices dropped in an otherwise sideways overnight session in most markets”.
   Gold ETFs 71.7moz vs US$71.7moz yesterday
Platinum US$886/oz vs US$892/oz yesterday
Palladium US$1,010/oz vs US$1,011/oz yesterday
Silver US$15.76/oz vs US$15.87/oz yesterday
           
Base metals:   
Copper US$ 6,648/t vs US$6,573/t yesterday
• Subdued investor digest banks’ view on outlook for 2018 draws metals lower. Nickel led the fall with 1.3%, while LME copper contracted 0.4% on subdued demand with an average $6,382/t in 2018.
Barclays and Goldman Sachs are outright bullish concerning supply volatility as labour negotiations could trigger disruptions at mines producing 40% of the world’s raw material. 7.8 million tonnes of annual production could be at risk as a swathe of labour contracts are due for renewal, with labour renegotiations surrounding the 20% rally in copper price this year. Copper surged to a three-year high in October on supply cuts, better-than-expected demand and waning long-term supply concerns. Elevated prices have already attracted strikes and widespread industrial action across Chile and Peru as unions focus on fairer wages.
• Planned winter closure of smelting operations to combat air emissions are ramping up imports of intermediate copper products as unwrought copper and copper-fabricated products were up 42.4% mom, or 24.7% yoy.
Aluminium US$ 2,010/t vs US$2,011/t yesterday
Nickel US$ 11,130/t vs US$10,900/t yesterday
Zinc US$ 3,120/t vs US$3,098/t yesterday - Zinc prices rising in China as top producing areas start environmental checks
• Zinc futures rose 0.8% to 24,910 yuan a tonne amid growing concerns about supplies of zinc concentrate after Huayuan county warned it will carry out more environmental inspections
• As much as 3,000 tonnes – 5,000 tonnes of zinc could be affected by the checks
Lead US$ 2,496/t vs US$2,458/t yesterday
Tin US$ 19,405/t vs US$19,360/t yesterday
           
Energy:           
Oil US$65.4/bbl vs US$63.3/bbl yesterday
• Britain’s largest oil pipeline could shut down for unscheduled repair work as routine inspection works revealed a small leak. The Forties Pipeline System, which carries 450,000 barrels per day of Forties crude from the North Sea to the Kinneil processing terminal in Scotland, has been operating at reduced capacity since December 7. sending the price of crude to new two-year highs.
• Hedge fund managers begin profit taking from strong rally in crude oil and refined product prices, with portfolio managers cutting their combined net long position in the five major futures and options contracts linked to petroleum prices by an equivalent of 34 million barrels last week.  
Natural Gas US$2.833/mmbtu vs US$2.830/mmbtu yesterday
Uranium US$25.00/lb vs US$25.00/lb yesterday
Lithium – new study links trace levels of lithium in drinking water to lower Altzheimer death rates

Bulk:   
Iron ore 62% Fe spot (cfr Tianjin) US$67.8/t vs US$67.8/t
Chinese steel rebar 25mm US$758.0/t vs US$752.1/t
Thermal coal (1st year forward cif ARA) US$88.4/t vs US$87.4/t - China coal prices soar as gas shortages spur unexpected demand
• Coal futures jumped to record high on Monday as natural gas shortages across the north spurred an unexpected demand for the fuel from utilities
• State media reported Beijing would be forced to restart coal fired power plant to help ease the gas shortage
Premium hard coking coal Aus fob US$236.1/t vs US$236.1/t
           
Other:  
Tungsten APT European US$293-300/mtu vs US$291-300/mtu last week
Cobalt LME 3m US$74750/t vs US$74500/t yesterday
• Revision of the mining code in the Democratic Republic of Congo could do lasting damage to investment in the globally leading cobalt and copper producer. The method of revising the 2002 mining code has been a laborious process extending for over five years, but on Friday the National Assembly approved a bill that would increase taxes and royalties. The measure is set to increase the state’s minimum unpaid share of new mining projects and require that Congolese investors hold at least 10% of shares in large-scale mines.
• The government argues that the proposed 3.5% royalties on precious and base metals are lower than in competitor nations such as Zambia, and revenues could boost the country’s annual budget of only around $5 billion.
• The bill could have devastating impacts on the nation’s economy, representing some 95% of the country’s export revenues, while hampering crucial supply for the developing electric economy, with copper and cobalt playing a fundamental role in electric vehicles and renewable technologies.
• LME’s probe into ethical sourcing of cobalt finds its first victim, as China’s Nanjing Hanrui said it was unable to ascertain that its products did not involve the use of child labour in Africa.
China’s Nanjing Hanrui can’t be sure cobalt didn’t use child labour
• China’s Nanjing Hanrui Cobalt, which sells the metal to a firm approved by the London Metal Exchange, said it was unable to ascertain that its products did not involve the use of child labour in Africa.
• Another LME supplier, Yantai Cash is unable to deliver against the LME cobalt contract as has yet to set up a supply chain verification system.

Company News
Anglo American (LON:AAL) 1376 pence, Mkt Cap £17.8bn –De Beers diamond sales remain firm
• Anglo American reports that De Beers achieved sales of US$450m for its 10th diamond sale of 2017. Equivalent sales in 2016 amounted to $422m.
• The sales represent a modest, 3% reduction on the $466m sales achieved during the previous sales cycle, which has been adjusted upwards from the provisionally reported $455m to $466m.
• Commenting on the sales, De Beers CEO, Bruce Cleaver, said that “the sales saw the continuation of good demand for De Beers rough diamonds as we head towards the end of 2017 … with sales slightly ahead of the equivalent period in 2016“.
Conclusion: The upgrading of the provisional value of the 9th sales cycle and the maintenance of this level of demand into the 10th cycle suggests a firming of the demand for rough diamonds in the run up to Christmas and the New Year.

Gem Diamonds (LON:GEMD) 76.3p, Mkt Cap £106m – Ghaghoo sale discussions ended – further negotiations underway
Gem Diamonds reports that the earlier proposal by a third party to acquire 100% of the mothballed Ghaghoo diamond mine has not resulted in agreement and that the offer has been withdrawn.
• The company does confirm, however, that it is “presently in discussions with other parties interested in acquiring 100% of the Ghaghoo asset and will update the market as and when appropriate.”

Premier African Minerals (LON:PREM) 0.4p, Mkt Cap £26m –Latest drilling from Zulu and RHA update
• Premier African Minerals has announced the assay results of the upper portion of its latest drillhole at the Zulu Lithium project near Fort Rixon, Zimbabwe.
• Hole ZDD-45, which is a step-out hole located approximately 220m south of the Main Zone where the company has a maiden resource estimate of 20.1m tonnes grading 1.06% Li2O, has encountered 68m of mineralised pegmatite from a depth of 101m down hole.
• “Assay results from the first 38.84m analysed contains an average of 1.55% Li2O in Multiple intersections including:
o 8.22m at 1.96% Li2O from 101.24m
o 3.53m at 1.06% Li2Ofrom 111.70m
o 1.20m at 2.08% Li2O from 124.40m
o 11.47m at 1.90% Li2O from 126.77m
 Including 0.95m at 4.24% Li2O from 138.96m
• 8.48m at 1.25% Li2O from 138.96m”
• Results from the rest of the hole are still pending.
• The drilling so far adds a further 24 holes (3683.54m) to the 2500m of drilling which was incorporated in the maiden resource estimate of June 2017. “The currents drilling programme is focussed on expanding as well as upgrading the resources in the Main Zone and to delineate further the Li mineralisation in the new south-eastern zone.”
• The company notes that all of the holes in the current programme have intersected mineralisation but that today’s results in Hole ZDD-45 are the best to date and are located at the junction of three zones and that the lithium mineralisation is spodumene rich with only scarce petalite and lepidolite.
• In a separate announcement, the company provides a progress report on its RHA tungsten project in Zimbabwe. A bulk sample of some 8,300 tonnes of open pit ore has been taken and of this around 7,250 tonnes have been processed in order to provide data which “will guide future open pit operations and cost effectiveness”. The remaining ore from the bulk sample will be processed “when the mining contractor has completed fragmentation of large boulders”, suggesting that the initial mining was perhaps not overly efficient.
• The company’s underground operations at RHS are reported to be progressing well although the monthly production remains below the 6000 tpm target projected for profitable operations though the company indicates that this target may have been overstated it expectes to achieve the 6000tpm target rate in December. Plant performance is “encouraging” with throughput at around 700tpd “and plant performance is primarily constrained because of high fine particle percentage in the open pit ore.” The company expects this problem to be alleviated by the blending of underground ore into the plant feed.
Conclusion: Drilling at Zulu appears to be extending the footprint of the mineralisation and offering the possibility of an upgrade to the existing 20mt resource. We await the assays from the lower portion of the current hole with interest. At RHA, it appears that there are continuing operational challenges. Despite a number of improvements relatively high levels of fine ore in the plant feed constricts plant throughput while the underground operation is only expected to reach its target production rate this month.

Rainbow Rare Earths Ltd (LON:RBW) – 15.1p, mkt cap £23.4m – Raising £2.8m for growth plans at Gakara
• Rainbow Rare Earths reports plans to raise between £2.6-2.8m in order to “bring forward its growth plans at its producing Gakara Rare Earth Project in Burundi … including an exploration campaign and the expansion of the mining fleet”.
• The company identifies the principal uses of the proceeds as:
o “Acceleration of the production ramp-up by fast-tracking the development of new mining areas at Gakara
o Purchase of additional mining fleet
o Drilling campaign to investigate recently identified anomalies at Gakara
o Strengthening balance sheet during ramp up.”
o The company confirms that the minimum price at which the funds are to raised is 14p/share.
o Conclusion: Rainbow Rare Earths is raising funds to accelerate the expansion of the Gakara Rare Earths project in Burundi.

Savannah Resources (LON:SAV) 5.4p, Mkt cap £34m – Savannah commissions small 20tph pilot plant on Mutamba mineral sands project in Mozambique
• Savannah Resources report the commissioning of a 20tph pilot plant on the Mutamba mineral sands project in Mozambique.
• The plant, which was opened by the Governor of the Inhambane district, was built by a local subsidiary of the Mutamba consortium is small by most standards but should be sufficient to provide samples for metallurgical work and for testing by potential consumers
• The consortium is made up of Savannah Resources, it’s local subsidiary and Rio Tinto plc with which Savannah has a consortium agreement.
• A scoping study by TZMI, experts in mineral sands, indicates a potential 30 year mine life based on a 451mt resource grading 6.0% Total Heavy Minerals.
• This is based on a very conceptual ‘dry mining’ mine plan utilising 33% indicated resource and 67% inferred resource.
• Production was modelled at 15mtpa with negligible waste to ore ratio for 456,000tpa of ilmenite and 118,000t of non-magnetic concentrate starting in 2020
• The plan shows base case sales of US$3.53bn forecast
• Capita cost, pre-production, are for US$152m + US$74m contingency for an EPCM contract +/-35%.
• Ilmenite prices are currently at around $173/t of 54% TiO2 concentrate FOB Australia according to the Metal Bulletin though this does not reflect premiums paid for better quality material.
• Ilmenite prices are said to have, unusually, continued to rise towards the year end. Anti-pollution action in China should reduce the amount of titanium produced from non-ilmenite sources at a time when demand is expected in the industry to rise.
Conclusion: The modelled project has an IRR of 19% on the base case ilmenite price of $185/t rising to 23% on $204/t and 27% pm $222/t. We do not consider these rates of return should be acceptable to Savannah or its consortium particularly given the +/-35% capital cost variability. We have to wonder why Savannah are spending time and money on the project although speculation indicates that Savannah are warehousing the project for Rio Tinto who are less than popular in Mozambique since the Riversdale disaster. The potential returns may not be good enough for Rio Tinto either.

W Resources (LON:WRES) 0.4p, Mkt Cap £20.4m – Potential US$30m term loan for La Parilla
• The Company reports that the investment committee of an un-named US based fund has granted preliminary approval to provide a US$30m loan to fund the La Parilla tungsten mine development in Extremadura, Spain. If the loan is forthcoming, it “fully funds the development of the 2 million tonnes per annum … La Parilla mine development”.
• The company confirms that development is progressing and that “Engineering is on schedule for completion in Q1 2018 and orders for all long lead items have been placed”.
• W Resources also comments that it “has submitted the environmental approval documentation to expand the mine from 2mtpa to 3.5mtpa”.
Conclusion: The possibility of loan finance for La Parilla should help the company deliver its plans to expand from 2mtpa to 3.5mtpa and comes at a time when the price of the benchmark intermediate product, ammonium paratungstate has recovered by around 50% this year to around $300 per metric tonne unit.
 

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Tue, 12 Dec 2017 11:07:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29099/today-s-market-view-copper-holds-despite-china-credit-growth-data-and-fomc-meeting-29099.html
Breakfast News - Erris Resources, CIP Merchant Capital, Panthera Resources... http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29098/breakfast-news-erris-resources-cip-merchant-capital-panthera-resources-29098.html What’s cooking in the IPO kitchen?

AIM

Erris Resources PLC—a mineral exploration and development company currently focused on two geographic areas. Offer TBC, expected 21 December 2017

CIP Merchant Capital—Closed ended investment Company. Sector focus oil & gas, healthcare, pharma, and real estate. Offer TBA. Due 21 Dec

Panthera Resources— The Company was established to act as a holding company for Indo Gold Limited, an unlisted Australian registered company. The Company aims to explore and develop gold assets in India and West Africa. Offer TBC, expected 20 Dec

Sumo Group—one of the UK's largest independent developers of AAA-rated video games providing both turnkey and co-development solutions, including initial concept and pre-production . Offer TBC. Due late Dec

Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017

Fusion Antibodies—contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications.  Offer TBA. Due Mid Dec.

Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m.  Due 19 Dec.

Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine.

Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with mkt cap of £17.4m. Acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago  with extensive drilling capabilities.

Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity.  Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec.

Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT

Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native in-video advertising. 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 19 Dec.

OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.

 

Main Market Specialist Fund Segment

Sure Ventures –Raising  up to £50m at £1. Focus on FinTech, IoT and Augmented/Virtual Reality. Due 22 Dec.

Tufton Oceanic Assets  -  intends to invest in a diversified portfolio of secondhand commercial sea-going vessels . Aiming to raise over $100m. Due 20 Dec

Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA.

 

Main Market Premium Listing

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

Greensphere Capital -$500m raise.  Aims to provide Shareholders with an attractive yield from a portfolio of sustainable infrastructure assets diversified by geographies and sectors and to realise long-term growth  capital value.  Due 20 Dec

Vivo Energy—The Africa-focused company, which operates around 1,800 Shell forecourts across 16 countries  reported by City A.M. to be preparing for a London float next year

Aberdeen Standard European Logistics Income—Investment Trust targeting £250m raise. Investing in a high quality portfolio of European logistics assets. Due 15 Dec.

Aviva Investors Secure Income REIT  - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due 15 Dec.

 
 
Breakfast buffet

Premier Veterinary Group (PVG.L) 33.1p £5.08m

“Wholly-owned subsidiary, Premier Vet Alliance (US) Limited ("PVA"), has signed a co-operation agreement with MWI Animal Health, one of the largest distributors in the US serving companion animal, equine and livestock markets. Through this new partnership, PVA's preventative healthcare program for pets, "Premier Pet Care Plan" ("PPCP"), will be made available to MWI's client hospitals across the Mid West and South East regions of the US ensuring enhanced compliance and pet wellness across independently owned practices. This co-operation agreement is the fifth such agreement entered into in the US, allowing PVG to access a further segment of the available US market.” FYSep18E rev £3.9m and Pre-tax loss £3.2m

Tristel (TSTL.L) 250p £107.46m

AGM Statement from the manufacturer of infection prevention, contamination control and hygiene products. "We are delighted that once again we expect to report period-on-period profit growth for the six months to 31 December 2017.

"We expect unaudited pre-tax profit for the first half to be no less than £1.9m, compared to £1.7m for the same period last year. Both figures are before share-based payments. Tristel continues to perform in line with management's expectations and our strategic financial goals.

"The additional data requested by the United States EPA was submitted by the agreed deadline of 15 November 2017. The North American regulatory programme continues to progress in line with our project plan." FYJun18E rev £22.4m and PBT £4.4m.

 

Weatherly (WTI.L) 0.83p £8.75m

Binding agreement to purchase 100% of the Kitumba copper project in Zambia from ASX-listed Intrepid Mines Limited. Up-front consideration of AU$4.75m in cash plus deferred consideration of AU$0.5m upon a Decision to Mine and a further AU$0.5m upon achieving Commercial Production.  The transaction is subject to certain Conditions. Weatherly has obtained a waiver from Orion Mine Finance to use part of the uncommitted US$10m loan announced on 28 July 2017 to fund the transaction. The advanced Kitumba copper development project hosts a JORC-compliant measured and indicated resource of 24.9Mt at a copper grade of 2.32% containing 578,000 tonnes of copper.  Includes within this resource is a JORC-compliant reserve of 21.9Mt at a copper grade of 2.20%Cu containing 492,000 tonnes of copper.

 

Oilex (OEX.L) 0.23p £3.94m

Agreement  to secure equity funding of up to A$2.35m with a ‘new cornerstone investor’ Republic Investment Management Pte Ltd in two tranches at 0.215p and 0.283p respectively.

Funds raised from the placement are intended to primarily be applied to initiate the delivery of a targeted 2018 work programme within the Cambay PSC and for ongoing working capital requirements. The 2018 work programme includes up to nine workover candidates and two vertical wells at Cambay in India.

 

PCG Entertainment (PCGE.L) 0.07p £2.29m

HYSep17 results from the  Asia-Pacific online gaming and media company. “The Company is currently in discussions with its former CEO in an attempt to settle his employment tribunal action. As always, we will update shareholders as soon as we are able to do so on all PCGE's initiatives.

During the Period, the Company had a net loss of US$588,332.  Cash of $1.9m. No revenue in period.

“The gambling license from the Kahnawake Gaming Commission has been renewed for a further year. We continue to examine potential additional deals for the Company across geographies and sectors.”

 

Joules Group (JOUL.L) 263p £230.12m

“Joules, the premium British lifestyle brand, today provides a trading update covering the 26-week period to 26 November 2017, which is the first half of the Group's 2018 financial year (the 'Period' or 'first half').

Group revenue for the Period increased by 18.2% (17.5% in constant currency) to £96.2m (H1 FY17: £81.4m), reflecting the brand's expansion, growing customer base, which is now at more than one million active customers, and the strong performance of both new and core collections.”

 

FY May18E rev £180.1m and £11.6m PBT, yield c. 0.8%.

 

Synectics (SNX.L) 205p £36.48m

FY Nov 17 trading update from the specialist in the design, integration, control and management of advanced surveillance technology and networked security systems. Consolidated profits are anticipated to be in line with market expectations. This represents growth of over 10% in underlying profits before tax compared with the year ended 30 November 2016, on revenues that were broadly flat. The Group's consolidated operating margin increased primarily as a result of better than anticipated performance in the higher-margin gaming surveillance sector, which was offset by weaker performance in the lower-margin UK on-vehicle market. Net cash at the year end was approximately £3.9m, up from £2.2m at 30 November 2016.   FYNov17E rev £73.04m, and PBT £3m, divs 4p.

 

Eden (EDEN.L) 8.38p £17.34m

The “company that provides breakthrough natural microencapsulation technologies to the global agrochemicals, animal health and consumer products industries, announces that its distribution partner, Eastman Chemical ("Eastman"), has announced the submission of the regulatory dossiers for its new nematicide, CedrozTM. Cedroz will be a new tool for farmers to control a wide range of economically important nematodes. 

The first product dossiers were submitted to the authorities in Israel, Europe, and Mexico for the use in fruit and vegetable farming against root knot nematodes. The first sales are expected towards the end of 2019.” FYDec17E rev £1.7m and £1.5m pre-tax loss.

 

President Energy  (PPC.L) 9.88p £105.85m

The “the upstream oil and gas company with a diverse portfolio of production and exploration assets focused primarily in Argentina, is pleased to announce that the Rio Negro Provincial Legislature has approved the 10 year Extension Agreement for the Puesto Flores and Estancia Vieja Concession in that Province in Argentina.

President looks forward to working with the Rio Negro Province and Ediphsa, the Provincial Energy Company, being the 10% participant in the Concession.”

 

Plant Health Care (PHC.L) 15p £22.17m

The provider of novel patent-protected biological products to global agriculture markets, has updated about its New Technology business.  5th major agricultural/seed company now signed agreement to evaluate Innatus™ 3G; all five of the top agricultural/seed corporations now testing Innatus 3G. -Four of these companies have now started field trials of Innatus 3G in Brazil for the control of Asian Soybean Rust, a devastating disease of soybeans. Exclusive rights for use in South American soybeans due to be auctioned  mid 2018, before start of  growing season. Focusing resources on delivering successful auctions in 2018.  Closing a licensing event in 2017 has been de-prioritised to focus on the larger 2018 goals. FYDec17E rev £6.1m, loss £4.2m.

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Tue, 12 Dec 2017 10:36:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29098/breakfast-news-erris-resources-cip-merchant-capital-panthera-resources-29098.html
Beaufort Securities Breakfast Alert - Ferrum Crescent, Premier African Minerals and Evgen Pharma http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29097/beaufort-securities-breakfast-alert-ferrum-crescent-premier-african-minerals-and-evgen-pharma-29097.html • Ferrum Crescent (LON:FCR)
• Premier African Minerals (LON:PREM)
Evgen Pharma (LON:EVG)



Markets
Europe
The FTSE-100 finished yesterday's session 0.80% higher at 7,458.48, whilst the FTSE AIM All-Share index was up 0.38% at 1,017.20. In continental Europe, the CAC-40 finished 0.23% lower at 5,386.83 whilst the DAX was 0.23% down at 13,123.65.
Wall Street
Last night in New York, the Dow Jones closed 0.23% higher at 24,386.03, the S&P-500 added 0.32% to end the day at 2,659.99, and the Nasdaq finished 0.51% higher at 6,875.08.
Asia
In Asian markets this morning, the Nikkei 225 was down 0.39% at 22,850.03 and the Hang Seng was 0.38% lower at 28,855.58.
Oil
In early trade today, WTI crude was 0.74% higher at $58.42 per barrel and Brent was up 1.45% at $65.63 per barrel.

Headlines
Fears grow across the Atlantic over Brexit fallout
Nearly all the possible trading relationships between Britain and the European Union following Brexit would be less favourable than staying in the European Union, according to an influential US think tank. The Rand Corporation study said the worst option would be a "no deal". That would leave the UK economy 4.9% poorer by 2029. "No deal" would also have a negative effect on the EU economy, but it would be "relatively minor". The report said that even a "soft Brexit" involving staying in the free market would not be as positive economically as staying in the EU. Rand plays a significant role in America, with half of its funding coming from the US government. In Europe it has advised the UK government on policy issues such as mental health, as well as the European Parliament and the European Commission.
Source: BBC News

Company news
Ferrum Crescent (LON:FCR, 0.07p) – Speculative Buy
FCR, the European lead-zinc explorer, announced an update on its Toral lead-zinc project in Spain. Mining consultants, Addison Mining Services of London, have been to site to verify and validate the project’s database for use in the JORC (2012) compliant resource estimate. Following a review of mineralised intersections, the presence of silver has been noted. Silver mineralisation is typical of carbonate hosted, structurally controlled Pb-Zn deposits such as Toral. The company is undertaking further verification and analysis to verify the silver grades within the mineralised system.

Our view: The above announcement is good news for FCR as it continues to develop the Toral lead-zinc (and potentially silver) project. The presence of silver could help with the overall economics of the project. We look forward to verification of the silver contents and an upgraded JORC (2012) compliant resource. In the meantime, we maintain our Speculative Buy on the stock.

Beaufort Securities acts as a corporate broker to Ferrum Crescent plc

Premier African Minerals (LON:PREM, 0.42p) – Speculative Buy
Premier African Minerals, the South and Western Africa focused mineral explorer and developer, announced today an update on its RHA tungsten mine and drill results from its Zulu lithium project, both are in Zimbabwe. PREM has completed the mining phase of a bulk sample containing 8,272t from the open pit to confirm the in-situ resource grade, stripping ratio and concentrate recovery. To date, 7,247t have been processed and results will be used to guide future open pit operations. Underground mining and development are progressing well with 3,700t of ore stockpiled and this is expected to reach 6,000t during December. Processing of stock piled ore commenced on 6th December 2017. Plant throughout is 700t per day and plant performance is primarily constrained by fine particles in the open pit ore. Blending of underground and open pit ore should help improve plant performance and recoveries of concentrate. PREM does not expect to provide any significant finance for future RHA operations after 31 December 2017. Additional working capital, if required, will only be provided to bridge time between concentrate availability and date of payment. PREM also announced that it has issued 59.8M new ordinary shares to African Mining and Exploration (Afmine), the principle mining contractor at RHA, for services related to the ongoing mining operations at RHA. PREM also announced further assay results from its Zulu lithium project. Hole ZDD-45 intersected 38.84m grading 1.55% Li2O including 0.95m grading 4.24% Li2O. Assay results are still pending for a further 30m of pegmatite. Zulu has a current resource estimate of 20.1Mt grading 1.06% Li2O with an exploration target of 60-80Mt. The purpose of the current drill programme is to expand and upgrade current resources from Main Zone.

Our view: Its good to see progress being made at the RHA mine. The bulk sample should provide important information for pit parameters such as resource grade, stripping ratio and concentrate recovery. Underground operations are projected to be 6,000t per month. We note that PREM does not intent to provide any further financing to RHA for normal operations or capital unless RHA is trading profitably. We continued to be encouraged with the recent improvement in tungsten prices. We also note the exceptional lithium grades, up to 4.24% Li2O from the Main Zone and look forward to further updates. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Premier African Minerals plc

Evgen Pharma (LON:EVG, 15.25p) – Speculative Buy
Evgen Pharma on Friday announced its interim results for the 6 months ended 30 September 2017 (‘H1 FY18’). During the period, total comprehensive loss was £1.7m (H1 FY17: loss £1.7m), net cash outflow (before short-term investment movements) was £1.7m (H1 FY17: £1.6m) and cash position (including short-term deposits) at the period-end amounted to £2.2m (H1 FY17: £5.5m). On the operational front, Evgen continue to progress its two Phase II clinical trials of SFX-01 for STEM (metastatic breast cancer) and SAS (subarachnoid haemorrhage stroke). STEM now has 7 sites opened for recruitment and commenced compassionate use programme for patients who have reached week 24 without disease progression so that they can continue to receive SFX-01. For SAS, it completed site initiation at Birmingham with a further three sites under consideration. On the separate announcement, the Group said it has conditionally raised £2.3m before expenses through placing of 19,166,667 new ordinary shares at a price of 12p. The proceeds will be used to progress clinical trials and for working capital purposes.

Our view: Evgen’s financial performance was in line with expectations, while made good progress on its two Phase II clinical trials. STEM is on course to release an interim data analysis in the first half of calendar year 2018, and the data read-out in the second half of calendar year 2018, while for SAS, the Group is on track for the data read-out before the end of calendar year 2018. With estimated monthly cash burn of c.£275k in FY18, the successful raise of £2.3m (subject to General Meeting) will support the Group’s operations towards the end of calendar year 2018. Considering its two Phase II assets targeting multi-billion dollar market opportunity each, the current valuation of just £10m, does not appear to have fully recognised the value Evgen might deliver over the coming 13 months or so. Beaufort reiterates its Speculative Buy rating on the shares.

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Tue, 12 Dec 2017 09:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29097/beaufort-securities-breakfast-alert-ferrum-crescent-premier-african-minerals-and-evgen-pharma-29097.html
Forties helps Brent crack the mid-sixties http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29096/forties-helps-brent-crack-the-mid-sixties-29096.html FTSE 100 Index called to open +10pts at 7465, with yesterday’s rally having found resistance at late November’s 7475 highs overnight. Bulls need a break above this to open the door for another leg higher towards November’s 7590 peak (bullish flag?). Bears are eager for any hints at a retrace towards yesterday’s 7415 breakout. Watch levels: Bullish 7480, Bearish 7455.


Calls for opening gains come after Brent Crude Oil hit a 2yr high of $66 as a hairline crack results in the unscheduled closure of the main Forties North Sea pipeline, potentially for weeks. This is buoying sentiment towards at least 14.3% of the FTSE 100 index (oil majors), potentially more with the knock-on benefit to Miners et al, which may also benefit from Glencore upgrading FY guidance.


More M&A within commercial property also helps, with France’s Unibail-Rodamco buying Australia’s Westfield so soon after last week’s Hammerson-INTU announcement. Furthermore, GBP holding around yesterday’s lows versus both USD and EUR limits the currency drag on the index.

In corporate news, Ashtead expects FY results ahead of prior expectations; 18-month share buyback of £500m-£1bn; dividend increased by +15.8%; Chairman retiring next year.

Glencore upgrades FY Marketing EBIT guidance to c.$2.8bn, at top end of prior range $2.6-2.8bn range. Carpetright issues profits warning.

GlaxoSmithKline presents promising new data from DREAMM-1 study of GSK2857916 for multiple myeloma blood cancer.

Balfour Beatty trading in line with expectations, anticipates FY order book in line with first half, restructuring to help achieve industry standard margins in H2 2018.

Aggreko appoints Heath Drewett as CFO.

US equity markets notched yet more record highs on Monday, with both the Dow Jones and S&P 500 reaching fresh highs, while the Nasdaq outperformed on Tech sector strength. Apple and Disney led the Dow higher, offsetting Boeing weakness, while Energy names helped the S&P to a fresh record close.

Brent Crude has edged back marginally from a fresh two and a half year high traded overnight ($66.1), however remains a distance above yesterday’s dual breakout from $64.2 and $65 after a major North Sea pipeline closed for repairs. US Crude remains more muted, trading a 1-week high of $58.4 overnight.

Gold has recovered from yesterday evening’s fresh 5-month lows as the US dollar retreats from yesterday’s highs, however remains under pressure ahead of multiple central bank updates over the coming two days. The US Federal Reserve (Wednesday), the ECB and the Bank of England (both Thursday) all provide monetary policy updates, with the former expected to hike interest rates.

In focus today will be a UK Inflation data barrage at 9:30am with expectations for a slight pick-up in Consumer Price Inflation (CPI) in November, keeping the headline annual rate at an uncomfortable 3.0% YoY and Core at 2.7% for a third and fourth consecutive month, respectively. Whilst this data may impact Retailers, the UK House Price index may move Housebuilders.

Thereafter, ZEW Surveys (10am) for both Germany and the Eurozone are forecast to show slight pullbacks. US data comprises NFIB Small Business Optimism (11am), expected to continue recovering from September’s 10-month low, before US PPI (1:30pm) rounds off the day’s major releases, potentially cooling monthly whilst accelerating to a 5-year high annually.

Events and Speaker-wise, the sixth day of the Commons committee debate on Brexit (11:30am onwards) will be closely watched, especially with the opposition Labour party beginning to lean towards a softer exit from the EU. ECB President Mario Draghi (7pm) participates in an official ECB event, the evening before tomorrow’s latest two-day policy meeting. However, don’t expect anything monetary policy related due to the policy blackout period.

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Tue, 12 Dec 2017 09:08:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29096/forties-helps-brent-crack-the-mid-sixties-29096.html
Nikkei Climbs to 26-Year High as Global Growth Optimism Returns http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29095/nikkei-climbs-to-26-year-high-as-global-growth-optimism-returns-29095.html Eoin Treacy's view

A link to today's video is posted in the Subscriber's Area.

Some of topics covered include: Japan breaks out, China bounces, S&P500 posts new closing high, Brent crude hits new recovery high, commodities steady but precious metals weak.

A section from the report is posted in the Subscriber's Area.

 

Nikkei Climbs to 26-Year High as Global Growth Optimism Returns
This article by Min Jeong Lee and Emi Urabe for Bloomberg may be of interest to subscribers. Here it is in full

Japanese shares rose with the Nikkei 225 Stock Average advancing to its highest since 1992 on a weaker yen, as upbeat jobs data from world’s largest economy reignited optimism over global growth.

Japan’s currency slid to a one-month low against the dollar after Labor Department figures Friday showed the U.S. added more jobs than expected in November and the unemployment rate held at an almost 17-year low. Both the Nikkei 225 and the broader Topix index advanced for a third day, with banks and machinery makers providing the biggest boost. Local equities are bouncing back to their highest levels in a quarter century following a pullback in late November on profit-taking.

“The global economic expansion isn’t over yet,” said Tatsushi Maeno, a senior strategist with Okasan Asset Management in Tokyo . As the yen heads lower “investors will anticipate upward revisions to corporate profits ahead of the earnings season in March.”

Both main stock gauges retreated briefly on Monday as technology companies slid in the wake of the sector’s recent global selloff. A measure of electronics makers finished 0.1 percent higher after slipping by as much as 0.6 percent.
“Performance for semiconductor stocks like Tokyo Electron is sluggish with investors torn over whether it’s alright to take an optimal view on the sector again,” said Hideyuki Suzuki, a general manager at SBI Securities Co."

Eoin Treacy's view

The Nikkei-225 has been ranging above 22,000 since early November and closed at an incremental new high today. Upside follow through tomorrow and a sustained move above 23,000 would reassert medium-term demand dominance. The broad Topix Index has now also moved to a new 25-year closing high and importantly these indices are doing so on a much lower valuation than Wall Street.

 

Brent Reaches Highest Since 2015 After Forties Pipeline Shutdown
This article by Jessica Summers for Bloomberg may be of interest to subscribers. Here is a section:

Brent crude in London reached its highest since 2015 as a key North Sea pipeline shut down.

The Forties Pipeline System, one of the most important oil conduits in the world, is to be fully halted after a crack was discovered, the link’s operator Ineos said. The announcement boosted pricing that had been largely muted over the last week following an OPEC-led agreement by major producers to extend output curbs through the end of 2018. The Brent rally pulled New York futures up near $58 a barrel.

At the same time, the U.A.E.’s energy minister said Monday the group may draft a strategy in June to end the curbs if the market is no longer oversupplied. Brent, the global benchmark, rose as high as $64.71 a barrel while West Texas Intermediate climbed to as high as $57.86 a barrel.

“Brent is ripping,” said Bob Yawger, director of futures at Mizuho Securities USA Inc. in New York. “You really don’t have a lot of spare barrels before the supply situation becomes a problem.”

In addition, the WTI-Brent spread will “widen and encourage U.S. exports,” he said.

The pipeline system feeds crude to the Hound Point export terminal near Edinburgh in Scotland. At over 400,000 barrels a day, the supplies that flow through the link are the single largest constituent part of the Dated Brent grade that helps to settle more than half the world’s physical oil prices.

Eoin Treacy's view

The Forties pipeline has more of an effect on pricing than its size merits because Brent is such an important benchmark for the global oil industry. The big question is how long it will take the leak to be sourced, fixed and whether they will then use this opportunity to run other maintenance

A section from the report is posted in the Subscriber's Area.

 

Please invest responsibly an important message from the Coinbase team
I received this email from the team at Coinbase ahead of the opening of futures trading. Here is a section:

We also wanted to remind customers of some of the risks associated with trading digital currency. Digital currencies are volatile and the prices can go up and down. Due to the rapidly changing price of digital currencies, some customers may not have sell limits that are sufficient relative to the value of total digital currency they are storing on Coinbase. Sell limits are one of the many measures Coinbase takes to protect client accounts and assets.

Eoin Treacy's view

At the time of writing the price of bitcoin was $16,614 while the January future was trading at $18,030. That suggests at least a $1400 time premium over spot which is not overly ambitious considering what bitcoin is capable of. So far, the number of contracts traded has been quite small and the circuit breakers were triggered early as the market priced in the time premium on the market. What I found particularly interesting is that an exchange like Coinbase would advise its clients to introduce stops.

A section from the report is posted in the Subscriber's Area.

 

Home Depot just showed who will gain the most from corporate tax cuts

This article by David J. Lynch for the Washington Post may be of interest to subscribers. Here is a section:

Several companies already have indicated that they will use excess funds to pay off debt, increase dividend payments or repurchase their own shares rather than create new jobs or raise wages. On Wall Street, the consensus is that workers will be last in line behind shareholders, creditors and investment bankers when the extra corporate cash is distributed.
“If they’ve got good growth prospects for something, they’re already throwing money at that. I don’t think the world changes because of lower taxes,” said Tim Ghriskey, who manages $1.5 billion in assets as chief investment officer at Solaris Asset Management. “There’s clearly going to be a lot of share buybacks.”

Eoin Treacy's view

With interest rates low and the footprint of online sales continuing to grow the majority companies are likely to continue to proceed on the path of financial engineering they have pursued for much of the last decade. They have every incentive to optimize their weighted average cost of capital by buying back relatively expensive equity, often by substituting it for cheaper debt.

 

Eoin's personal portfolio update December 8th.

One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

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Tue, 12 Dec 2017 08:41:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29095/nikkei-climbs-to-26-year-high-as-global-growth-optimism-returns-29095.html
Oil price, Hurricane, SDX Energy, Pantheon, Genel, Premier And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29094/oil-price-hurricane-sdx-energy-pantheon-genel-premier-and-finally-29094.html WTI $57.36 +67c, Brent $63.40 +$1.20, Diff -$6.04 +53c, NG $2.77 +1c

Oil price
Even with a decent bounce on Friday the week ended on a downward note, WTI lost $1 and Brent 33c as geopolitics wrestled with inventory oddities and of course the strong greenback encouraged by a likely rate hike didnt help. I am in Dubai for a few days so will try and test the mood out there.

Hurricane Energy - LON:HUR
The long-awaited CPR from Hurricane is out this morning covering all the Rona Ridge assets excluding the Lancaster field and delivered by RPS Energy Consultants Limited. By any yardstick this is a very substantial resource increase, Hurricane’s total 2P reserves and 2C contingent resources are increased by ∼231% to 2.6bn barrels of oil equivalent.

At Halifax, RPS concludes that it has similar reservoir properties to Lancaster, and importantly, similar oil types which may even come from the same aquifer. 2C contingent reserves at Halifax of 1,235 million barrels of oil equivalent is another piece of independent evidence to back the case for this discovery. As for Lincoln, again RPS report that similar reservoir properties to Lancaster and again, similar oil types. This confirms the Hurricane view that the Brynhild Fault Zone separates Lancaster from Lincoln and that the O/W contact is materially deeper than at Lancaster.

Looking at Lincoln compared to Warwick, whilst RPS ‘recognises that they have the potential to be a single hydrocarbon accumulation’ they have elected to take a more conservative approach by evaluating them as separate structures, at least until a well is drilled at Warwick. Nevertheless, RPS give 2C contingent resources at Lincoln of 604m barrels of oil equivalent on its own. With Warwick as yet undrilled, it is assigned prospective resources of 935m stock tank barrels of oil and a chance of discovery of 77% given the proximity to the Lincoln discovery and the Lancaster field, very promising indeed. One can draw from this that whether or not they are separate structures or a single accumulation, the Greater Warwick area are comparable in resources potential with the Greater Lancaster area with a combined recoverable resource potential of 1.5bn barrels of oil equivalent.

I have spoken to CEO Dr Robert Trice this morning and he is clearly delighted with this CPR, he feels it has been done fairly and specifically with regard to Warwick, has assessed the potential objectively. The fact that the same type of oil is prevalent in Lancaster, Lincoln and Halifax franks the company’s initial work and the testing programme. On that note he fully understands that further test wells will need to be drilled and oil will have to be flowed to surface in order to further de-risk the whole project. What can be said is that this independent corroboration of the information that has been placed in front of shareholders over the last two years or so ‘validates the geological model’ and makes Hurricane a very exciting vehicle in the next year or so. I say that because with the plan to go to EPS of Lancaster straight away now looking eminently sensible, the de-risking of the rest of the project could have a significant value add to the company. At this stage they have confirmed that they are ‘committed to achieving maximum shareholder value’ and to monetising the ‘vast resources’ via farm-out and ultimate sale of the company ‘at the appropriate time’, ie when it receives an offer it believes reflects that value to shareholders.

SDX Energy - LON:SDX
SDX has announced that the KSR-16 development well is a gas discovery with 14.2m of net conventional natural gas pay in the Hoot formation. As with previous wells this will be connected to existing infrastructure and on production within 30 days. This is another successful well from SDX and again exceeded pre-drill estimates, this time by around 50%. The rig now moves off to drill ELQ-1 on the Gharb Centre Permit, a recently acquired licence. In the meantime the company expects KSR-15 to be on test production early next week.
This success has allowed the company to ‘accelerate new customer acquisition activities’ and may result in them bringing forward the start of their forecast gas sales. All in all further success for SDX and with ambitious plans for drilling and development across the portfolio I may have to bang on again about how exceptionally good value the stock is.

Pantheon Resources - LON:PANR
An operational update from PANR this morning on the logging operations at VOBM#4 where Schlumberger has completed its work. Electric logs indicated the presence of hydrocarbons in a ‘potentially significant reservoir in the targeted Wilcox formation confirming the natural gas flows encountered during drilling’.
All the usual caveats apply as until flow testing is completed nothing can be taken for granted but this looks pretty good to me. The only drawback is that they are bringing in a cheaper workover rig for that process which will add to the timing of the next news. However, given they werent even looking for the Wilcox this is highly encouraging news.

Genel Energy - LON:GENL
Genel has confirmed that the Peshkabir-3 well has been extremely positive and the field, in the Tawke Licence is now has now tripled to 15/- bopd.I am seeing Genel before Christmas and looking forward to an update.
Premier Oil

The E.ON acquisition is the gift that keeps on giving to Premier and there is plenty more where that came from. Today the company announce the sale of its 30% stake in the ETS pipeline to CATS for $31.6m, for an asset that is totally core it is a great piece of business, not as good as buying the whole E.ON business for $120m in 2016. Even Dick Turpin wore a mask…..

And Finally…
In some haste after last night the Prem looks wrapped up as an early christmas gift for Pep.
In the Champions League draw they got Basel which is ok, the Red Devils got Sevilla, Spurs will play Juve, the HubCap Stealers Porto and Chelski pulled out Barca…

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Mon, 11 Dec 2017 12:16:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29094/oil-price-hurricane-sdx-energy-pantheon-genel-premier-and-finally-29094.html
Breakfast News - FFI Holdings, Landore Resources, Sosandar, Time Out Group and others http://www.proactiveinvestors.co.uk/columns/hybridan-small-cap-wrap/29093/breakfast-news-ffi-holdings-landore-resources-sosandar-time-out-group-and-others-29093.html AIM

Erris Resources PLC—a mineral exploration and development company currently focused on two geographic areas. Offer TBC, expected 21 December 2017

CIP Merchant Capital—Closed ended investment Company. Sector focus oil & gas, healthcare, pharma, and real estate. Offer TBA. Due 21 Dec

Panthera Resources— The Company was established to act as a holding company for Indo Gold Limited, an unlisted Australian registered company. The Company aims to explore and develop gold assets in India and West Africa. Offer TBC, expected 20 Dec

Sumo Group—one of the UK's largest independent developers of AAA-rated video games providing both turnkey and co-development solutions, including initial concept and pre-production . Offer TBC. Due late Dec

Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017

Fusion Antibodies—contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications.  Offer TBA. Due Mid Dec.

Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m.  Due 19 Dec.

Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine.

Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with mkt cap of £17.4m. Acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago  with extensive drilling capabilities. 

Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity.  Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec.

Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT

Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native in-video advertising. 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 19 Dec.

OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.

Main Market Specialist Fund Segment

Sure Ventures –Raising  up to £50m at £1. Focus on FinTech, IoT and Augmented/Virtual Reality. Due 22 Dec.

Tufton Oceanic Assets  -  intends to invest in a diversified portfolio of secondhand commercial sea-going vessels . Aiming to raise over $100m. Due 20 Dec

Main Market Standard Listing

Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA.

Main Market Premium Listing

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

Greensphere Capital -$500m raise.  Aims to provide Shareholders with an attractive yield from a portfolio of sustainable infrastructure assets diversified by geographies and sectors and to realise long-term growth  capital value.  Due 20 Dec

Vivo Energy—The Africa-focused company, which operates around 1,800 Shell forecourts across 16 countries  reported by City A.M. to be preparing for a London float next year

Aberdeen Standard European Logistics Income—Investment Trust targeting £250m raise. Investing in a high quality portfolio of European logistics assets. Due 15 Dec.

Aviva Investors Secure Income REIT  - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due 15 Dec.



  
 
    
 
 
Breakfast buffet

Cadence Minerals (NEX:KDNC) 0.275p £21.6m

Binding investment agreements with Lithium Technologies Pty Ltd and Lithium Supplies Pty Ltd ("The Vendors") to acquire up to 100% of six prospective hard rock lithium assets in Argentina. These transactions mark the start of the Company's strategic shift to earn in to early stage lithium assets in well-known lithium jurisdictions where we see the potential to deliver shareholder value by investing in projects that have shorter development timeline to cashflow than a typical lithium carbonate producer. The Vendors have claims over 55,773 hectares for six exploration permits within the known spodumene bearing pegmatite fields in San Luis Province, Central Argentina. Will acquire up to 49% by spending £1.1m on exploration and drilling, and by issuing £0.4m  of shares.

AorTech (LON:AOR) 23.75p £1.32m

“The biomaterials and medical device IP company, announces that the Foldax Defendants and the Company have amicably resolved their dispute and the terms of settlement have been incorporated into a confidential settlement agreement.

Bill Brown Chairman of AorTech, commented: "I am pleased to announce this settlement agreement which brings to an end the ongoing dispute. We now look forward to focusing on developing AorTech's IP assets."

Faron Pharma (LON:FARN) 825p £240.6m

The clinical stage biopharmaceutical company, announces that it has completed recruitment, on track, for its Phase III INTEREST trial of Traumakine® for the treatment of moderate to severe Acute Respiratory Distress Syndrome (ARDS).

In addition to the completion of recruitment, the Company reports that it has adopted recommendations from the INTEREST trial's Independent Data Monitoring Committee  and Steering Committee  to present patient data showing blinded ARDS outcomes (mortality/ morbidity) at 90 days (D90), in addition to the day 28 mortality endpoint. Outcomes at D90 are widely recognised to be as important clinically when judging the benefit of treatment alongside the D28 data.

Landore Resources (LON:LND) 2p £16.72m

Updated Mineral Resource estimate for the BAM East Gold Deposit on its Junior Lake Property, Ontario, Canada.

BAM East Gold Resource increased to 400,000 ounces gold at 1.37 grams/tonne (g/t) of which 326,000 ounces gold is in the Indicated category.  

“Landore Resource's work programme in 2018 is aimed at further growth of the BAM East Gold resource to greater than one million ounces gold, completion of a Preliminary Economic Assessment (PEA) on the Junior Lake Project and the discovery of further gold deposits along the 31 kilometre, highly prospective Junior Lake Shear".   

Yu Group (LON:Yu.) 810p £113.8m

“The independent supplier of gas and electricity to the UK corporate sector, announces that it has been granted a licence by regulator Ofwat to enter the retail and commercial water market. The Company intends to supply water services for the business sector only and will trade under the Company's newly formed subsidiary, Yü Water Limited.

 

Yü Group decided to launch Yü Water following the de-regulation of the water retail market in April this year, the largest market of its kind in the world. The licence will allow Yü Water to buy wholesale water services and offer these services together with its energy services to develop bespoke packages to suit the individual business needs of its customers.” FYDec17E rev £40.25p and £2.55m PBT, yield c. 0.4%.

Vela Technologies (LON:VELA) 0.78p £5.6m

The investing company focused on early-stage and pre-IPO disruptive technology investments, notes the recent press coverage regarding Portr Limited, trading as Airportr, the London based travel technology start-up, which has partnered with American Airlines to allow check-in of luggage for its flights from London. This follows the partnership previously announced with British Airways.

Vela has an interest in 125,619 shares in AirPortr, equivalent to 3.7% of AirPortr's issued share capital.

FFI Holdings  (LON:FFI) 153p £240.3m

The specialist in the provision of completion contracts to the entertainment industry for films, television, mini-series and streaming product, announces today that it has acquired Buff Dubs Pty. Ltd. one of Australia's most innovative post-production services companies with technology leadership in encoding, transcoding, media duplication and mastering.

In the trailing 12 months, Buff Dubs generated A$4.3m in revenues and EBITDA of A$881,000. FFI is purchasing 100% of Buff Dubs on an instalment basis, with an initial payment of A$1.65m in cash followed by 5 annual payments of 12.5% of Buff Dub's EBITDA at a 4 times multiple.

FYMar18E rev £50.66m and PBT £19.01m.

Plus500 (PLUS.L) 950p £1,082m

The “online service provider for retail customers to trade CFDs internationally, is pleased to announce that the Monetary Authority of Singapore has granted Plus500SG Pte. Ltd. a Capital Markets Services licence for dealing in securities and leveraged foreign exchange trading.

The grant of the Capital Markets Services licence reflects the scalability of the Company both from a business and a regulatory point of view and is in line with the Company's strategy to add new licences in order to expand its customer base globally and diversify its geographical revenues.”

FYDec17E rev £288.2m and PBT of £168.4m, yield c.7%.

Time Out Group (LON:TMO) 133.5p £178.04m

The global media and entertainment business, has signed a conditional lease agreement for a new Time Out Market in Chicago. Anticipated to open in 2019. The stand-alone, two-storey brick building is at the heart of the Fulton Market District, one of the oldest meatpacking and food distribution centres in the city going back to the 19th century. Today, this is one of Chicago's thriving neighbourhoods attracting high footfall with its restaurants, bars, shops, galleries and hotels as well as offices occupied by some of the world's leading companies. Footprint of circa 50,000 sq ft, accommodating almost 600  seats.

FYDec17E rev £45.3m and £19.26m pre-tax loss.

Sosandar (LON:SOS) 19.7p £21m

The online women's fashion retailer, is pleased to announce that trading since 31 August 2017 to the end of November has exceeded management expectations.  The new funds raised at the time of the reverse takeover on 2 November 2017 are enabling the business to acquire larger and wider ranges of product and has also enabled the business to accelerate its media and marketing activities. Investment in new marketing channels has yielded strong results and will be further expanded in order to drive new customer acquisition.

We could see no forecasts.

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Mon, 11 Dec 2017 12:10:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-small-cap-wrap/29093/breakfast-news-ffi-holdings-landore-resources-sosandar-time-out-group-and-others-29093.html
Today's market view -Mkango Resources, Patagonia Gold, Serabi Gold Price, Sula Iron & Gold, Strategic Minerals http://www.proactiveinvestors.co.uk/columns/sp-angel/29092/today-s-market-view-mkango-resources-patagonia-gold-serabi-gold-price-sula-iron-gold-strategic-minerals-29092.html Mkango Resources* (LON:MKA) – TSXV grants conditional acceptance of Talaxis deal
Patagonia Gold (LON:PGD) - Proceeding with Calcatreu option
Serabi Gold Price (LON:SRB) – Mineral reserve/resource update
Sula Iron & Gold (LON:SULA) – Acquisition of cobalt licence in DRC and name change
Strategic Minerals* (LON:SML) – Redmoor phase 2 drilling results

Dow Jones Industrials  +0.49% at 24,329
Nikkei 225   +0.56% at 22,939
HK Hang Seng   +1.18% at 28,978
Shanghai Composite    +0.98% at 3,322
FTSE 350 Mining   +0.09% at 16,558
AIM Basic Resources   +1.01% at 2,554

Economics

Currencies

US$1.1788/eur vs 1.1746/eur yesterday.           Yen 113.40/$ vs 113.54/$.         SAr 13.676/$ vs 13.683/$.            $1.337/gbp vs $1.351/gbp
            0.753/aud vs 0.751/aud.            CNY 6.617/$ vs 6.617/$.

Asian – Strong data positive for Asian shares
• Strong US payrolls data and better-than-expected Chinese trade figures boosted Asian shares as every single market bar one showed positive movement.
• The MSCI’s broadest index of Asia-Pacific shares outside of Japan climbed 0.5% to 552.38 above a recent two-month low. Japan’s Nikkei rose 0.6% with China’s blue-chip CSI 300 index up 1.2%.

Commodity News

Australian and Canadian miners benefit from EV boom

• EV and battery makers looking to lock future raw material supply have been investing in lithium and cobalt mines
• String of potential financing deals in Canada comes after handful of lithium miners in Australia secured investment from mainly Chinese automakers and battery makers this year

Beijing issues emergency order to relight coal generators
• Ordered power companies are required to immediately fire up backup coal burning generators in response to a natural shortage in North China during its critical winter heating period
• The city sent notices to the State Grid Corp. of China’s North China division, State Grid Beijing Electric Power Co. and Huaneng Beijing Thermal Power Co. Ltd. to begin emergency coal power generation to reduce the city’s reliance on natural gas

Precious metals:         
Gold US$1,250/oz vs US$1,248/oz last week
• Bearish sentiment toward the precious metal rises to its highest levels since 2015, as traders and analysts surveyed before this week’s meeting of the Federal Reserve (Dec. 12-13) foresee an increase in US interest rates for a third time this year. Money managers have tripled their short positions in gold, which is the fastest pace since record-keeping started in 2006. Rapidly changing sentiment follows a five-year low in short positions last week as North Korea-US tensions and uncertainty surrounding the Senate tax bill supported demand for the safe haven investment.
• Buoyant US payroll data signaled robust economic growth as November figures rise to 228,000, above the 195,000 median economist forecasts. The jobless rate held steady, while wages rose less than expected.
• Traditional investors in the safe haven asset may be drawn towards the rapid ascent of cryptocurrency values, as CBOE launches the debut bitcoin futures markets. The January contract opened at $15,460 in New York on Sunday and rose over 21% to above $18,500 as the exchange is expected to give Bitcoin extra legitimacy. With the rival Chicago Mercantile Exchange opening their derivative contract next week, the increased availability in the digital currency is forecast to draw more finance away from conventional investing.
   Gold ETFs 71.7moz vs US$71.7moz last week
Platinum US$892/oz vs US$896/oz last week
Palladium US$1,011/oz vs US$1,019/oz last week
Silver US$15.87/oz vs US$15.78/oz last week
           
Base metals: 
  
Copper US$ 6,573/t vs US$6,599/t last week
• Following last week’s significant decline across metals, recording the largest fall since 2016, market participants will be looking forward to the release of China’s industrial production data on Thursday to calm concerns over diminishing demand. The combined impact of capacity cuts to China’s second-largest smelter and data indicating surging imports have bitten into the demand-led rally that has lifted prices 19% year-to-date.
Aluminium US$ 2,011/t vs US$2,013/t last week
Nickel US$ 10,900/t vs US$11,020/t last week
Zinc US$ 3,098/t vs US$3,095/t last week
• Zinc leads the rebound of metal prices following last week’s biggest weekly decline since 2016, climbing 0.9% after falling 5.1% last week. Concerns over weakening Chinese demand had drawn LME index of six metals down 3.7%. Although the backdrop for metals over 2018 remains positive, analysts foresee “investors to be looking to lock in any gains and we’re still susceptible to weakness” (Australia & New Zealand Banking Group Ltd).
Lead US$ 2,458/t vs US$2,450/t last week
Tin US$ 19,360/t vs US$19,430/t last week
           
Energy:           
Oil US$63.3/bbl vs US$62.3/bbl last week
• OPEC and its partners have successfully eliminated more than half of excessive global supply this year, and forecast an effective market rebalance through 2018 through an extension of global supply cuts. However, the International Energy Agency foresee rising prices stimulating increased output from US shale drillers and non-OPEC producers, stalling the progress in reducing the remaining global glut.
• Worries over non-OPEC’s reaction to elevated prices has driven hedge funds and money managers to cut their bullish bets on US crude, as the speculator group removed 9,135 contracts in futures and options position in New York to 442,742.
Natural Gas US$2.830/mmbtu vs US$2.778/mmbtu last week
Uranium US$25.00/lb vs US$25.00/lb last week

Bulk:   
Iron ore 62% Fe spot (cfr Tianjin) US$67.8/t vs US$66.1/t
Chinese steel rebar 25mm US$752.1/t vs US$745.2/t
Thermal coal (1st year forward cif ARA) US$87.4/t vs US$86.3/t
Premium hard coking coal Aus fob US$236.1/t vs US$231.2/t
           
Other:  
Tungsten APT European US$293-300/mtu vs US$291-300/mtu last week
Cobalt LME 3m US$74500/t vs US$71000/t last week
• Tightening market conditions are driving concerns over supply as consumers rush to secure units to support the EV story. The surprise move by investment vehicle Cobalt 27 to acquire over 700 tonnes of physical metal prompted the price of high-grade cobalt to experience a dramatic 10% jump to the top end of $32.50-36.29/lb. The new of the recent purchase has since prompted several sellers to raise their offers and bids to secure deals.
• “There’s big tonnage changing hands in a tight market. Market investors have had a big impact on the whole community, and now with profit realization, we can see continued strength.”

Company News
Mkango Resources* (LON:MKA) 6.625p, Mkt Cap £6.5m – TSXV grants conditional acceptance of Talaxis deal
• Mkango Resources reports that the TSXV has conditionally accepted the Talaxis deal under which Mkango is set to receive £12m in three tranches for a 49% interest in the Songwe Hill Rare Earths Project. The transaction is subject to shareholder approval (excluding Talaxis) which is to be sought at a meeting to be held on 18th January 2018.
• “The first and second tranches, totaling £5 million (C$8.6 million), of the investment into the Project will be invested following receipt of Minority Approval, to be sought at a meeting ("Meeting") scheduled for January 18, 2018. The first tranche of £2 million (C$3.4 million) is being placed into escrow by Talaxis pending the Meeting.” In addition, there is an initial £1m investment into the new venture, Newco.
• The third tranche is subject to the completion of the formal documentation following the shareholder meeting. In addition, Talaxis has the option to “acquire a further 26% interest in the Project by arranging funding for Project development, following which Mkango would hold a 25% interest in the Project, free carried until commencement of production.”
• We also highlight the agreement between Mkango and Talaxis for cooperation on rare–earths projects worldwide and all other projects in Malawi, which singles Mkango out as the preferred partner for future rare earths projects as Talaxis owner, Noble Group develops its strategy in rare-earths.
• Commenting on the moves by the TSXV, Mkango’s Chief Executive, William Dawes, noted that “On shareholder approval and receipt of £6 million investment by Talaxis, the Company will commence the initial phase of the feasibility study, including mobilization for an extensive infill, geotechnical and exploration drilling programme starting in the second quarter of 2018, in parallel with ongoing processing flow sheet optimisation and work in relation to the Environmental, Social and Health Impact Assessment.”
Conclusion: We look forward to the shareholder vote in January which should clear the way for the funding needed to start the initial feasibility work at Songwe Hill and to the continuing flow of results from that work.
*SP Angel acts as Nomad and Broker to Mkango Resources
Patagonia Gold (PGD LN) 0.875p, mkt cap £20.7m - Proceeding with Calcatreu option
• Following its recent fundraising, Patagonia Gold is moving ahead with the formalities needed in order to exercise its option to acquire the Calcatreu silver/gold project in the Rio Negro Province of Argentina from Pan American Silver.
• The deposit contains an Ni-43-101 compliant indicated resource of 8mt at an average grade of 25.7 g/t silver and 2.63 g/t gold (6.6moz of silver and 675,000 oz of gold). 
• “The system has a known strike length of over 8 km” and the company intends to undertake detailed geophysical and geochemical surveys to provide insight into the potential scale of the opportunity.

Serabi Gold Price (LON:SRB) 3.25p, mkt cap £22.7m – Mineral reserve/resource update
• Serabi Gold reports its mineral reserves and resources effective 30th June 2017. The proven and probable reserves, in accordance with the CIM / NI-43-101 reporting standard, amount to a total of 182,000 oz of gold contained in 703,000 tonnes at a diluted grade of 8.05g/t gold. The company notes that this supports “in excess of 4 years production”.
• Over 90% of the reserve is contained within the Palito mine reserve inventory with the balance at the nearby Chico mine.
• The company notes that “The mineral resource and reserve estimates exclude previously announced gold discoveries made by Serabi including the Currutela, Copper Hill, Piaui and Palito South areas, where there is currently insufficient geological data to estimate a mineral resource for these discoveries. [However] … An infill drill programme is currently underway that will provide additional geological date on each of these project areas.”
• The company makes the point that, since its last resource estimation in June 2012, and the reopening of the Palito  mine in late 2013, the mine has extracted some 182,000oz of gold have been extracted and the overall measured/indicated resource of Palito has increased by 31percent to 271,000 oz (717,000t at a grade of 11.74g/t) with an additional inferred resource of 177,000oz (784,000t averaging 7.02g/t)
• We interpret this to mean that over the 4 year period since the mine re-opened, Serabi Gold has added an extra 182,000oz of gold to its measured/indicated resource base in addition to the gold produced.
• Similarly, we estimate that at Sao Chico, Serabi Gold has added some 39,000oz of resource in excess of the estimated 28,000oz of gold produced since the mine reached commercial production in January 2016.
Conclusion: Serabi Gold has boosted its overall mineral resources at both its operating mines at Palito and Sao Chico and is currently drilling a number of other prospects which may further add to resources if a sufficient density of drilling is achieved to support a resource estimate on these other properties. We look forward to continuing news as drilling proceeds.

Sula Iron & Gold (LON:SULA) 0.085p, Mkt Cap £2.8m – Acquisition of cobalt licence in DRC and name change
• Sula Iron & Gold has announced that it has acquired a controlling, 70% interest, in a cobalt licence in the DRC. The licence is located “close to a number of existing cobalt / copper mines …” and is underlain “by the type of rocks which hosts most of DRC’s cobalt and copper”.
• Grades reported on grab samples analysed in the field by a portable XRF analyser are reported to range up to 2.5% cobalt.
• The company has, conditionally,  raised £1.75m to progress the cobalt project and assess other similar opportunities in the DRC, via the placing of 3bn shares with new and existing shareholders and “a subscription  for 500,000,000 New Ordinary Shares with a single investor all at a price of 0.05 pence per share. The Fundraising, which has been arranged by SP Angel, is conditional, inter alia, upon Shareholders' approval of each of the Resolutions and Admission.”
• In order to reflect the shift in direction, “the Board has passed a resolution … to change the Company’s name to African Battery Metals plc”.
• A shareholder meeting has been called for 27th December.
• Commenting on the transaction, CEO, Roger Murphy, said “We are bullish on the outlook for cobalt and the other battery metals and believe that the creation of African Battery Metals plc will provide UK equity investors with exposure to cobalt, which some analysts see as the battery metal with the tightest supply/demand fundamentals.” Mr Murphy went on to add “The addition of cobalt to our existing gold assets in Sierra Leone, provides important diversification to our exploration activities. We remain committed to our Ferensola Gold Project and to maintaining and valorising it through a joint venture or farm-out, as previously announced."
Conclusion: The acquisition of a cobalt licence in DRC provides the London market with a new exploration exposure to the growing interest in cobalt as a battery metal. We look forward to developments as exploration proceeds.

Strategic Minerals* (LON:SML) 2.15p, Mkt Cap £28.4m – Redmoor phase 2 drilling results
• Strategic Minerals has released the results of the final 5 boreholes of its drilling programme at the Redmoor tin/tungsten project in Cornwall where it holds a 50% interest in Cornwall Resources with New Age Exploration.
• The results from the Phase 2 drilling show “Considerably higher-grade intercepts than previously reported”, and in our interpretation, show mineralisation within the sheeted vein system (SVS) extending over a vertical interval of up to 500m.
• The results of the full 20 hole, 7,045m programme, in conjunction with pre-existing drilling information, will be used for an update of the mineral resources estimate (currently an inferred resource of 13.3mt at an average grade of 0.21% tin and 0.16% tungsten trioxide) which is “targeted for release in Q1 2018.”
• The company also points out that the recent drilling “appears to indicate that the SVS grade may be increasing with depth.” Among the results reported today from the SVS are:
o An 8.5m wide intersection (7.83m estimated true width) at an average grade of 0.09% tin, 0.23% tungsten trioxide and 0.32% copper from a depth of 320.12m in hole CRD020, which also contained a 3m intersection averaging 1.55% tin, 0.06% tungsten trioxide and 2.45% copper from 301.13m and 4m averaging 0.57% tin, 0.15% tungsten trioxide and 0.75% copper from 354.76m; and
o Intersections of 6m averaging 0.03% tin, 1.29% tungsten trioxide and 0.28% copper from 465.10m and 7m averaging 0.01% tin, 1.79% tungsten trioxide and 0.17% copper from 507.05m in hole CRD019; and
o A 13m wide intersection (8.41m estimated true width) at an average grade of 0.08% tin, 0.43% tungsten trioxide and 1.24% copper from a depth of 357.17m in hole CRD018, which also contained a 2m wide intersection averaging 0.07% tin, 0.81% tungsten trioxide and 0.35% copper from 365.17m..
• We note that the recent drilling is showing potentially significant copper and tungsten trioxide grades while the tin grades, with the exception of those encountered in hole CRD020, are generally lower than those previously encountered.
• Commenting on the results, non-executive director, Peter Wale, highlighted that the “potential for the resource size and grade to improve at depth has opened a substantial opportunity for the projects, extending the depth of known mineralisation at Redmoor.”
• Mr Wale went on to comment that “These results have encouraged us to seriously examine fast-tracking the project to production and we look forward to updating the market after completing the resource update.”
Conclusion: The second phase of drilling at Redmoor has shown wide intersections of the SVS at depth and encouraged the company to examine fast track development opportunities for the project. We look forward to the updated mineral resource estimate during Q1 2018 and to further comment from the company on its view of the development possibilities at Redmoor.

*SP Angel act as Nomad and broker to Strategic Minerals

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Mon, 11 Dec 2017 11:06:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29092/today-s-market-view-mkango-resources-patagonia-gold-serabi-gold-price-sula-iron-gold-strategic-minerals-29092.html
Beaufort Securities Breakfast Alert - Jangada Mines, Sunrise Resources, Tiziana Life Sciences http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29091/beaufort-securities-breakfast-alert-jangada-mines-sunrise-resources-tiziana-life-sciences-29091.html Markets

Europe
The FTSE-100 finished Friday's session 1.00% higher at 7,393.96, whilst the FTSE AIM All-Share index was up 0.63% at 1,016.82. In continental Europe, the CAC-40 finished 0.28% higher at 5,399.09 whilst the DAX was 0.83% up at 13,153.70.

Wall Street
Last Friday in New York, the Dow Jones closed 0.49% higher at 24,329.16, the S&P-500 added 0.55% to end the week at 2,651.5, and the Nasdaq finished 0.4% higher at 6,840.08.

Asia

In Asian markets this morning, the Nikkei 225 was up 0.41% at 22,904.96 and the Hang Seng was 0.61% higher at 28,813.77.

Oil
In early trade today, WTI crude was 0.44% lower at $57.11 per barrel and Brent was down 0.49% at $63.09 per barrel.

Headlines
Bitcoin futures trading begins on CBOE exchange in Chicago
Bitcoin has begun trading on a major exchange for the first time. It launched on the CBOE Futures Exchange in Chicago at 23:00 GMT Sunday, allowing investors to bet on whether Bitcoin prices will rise or fall. In the lead-up to its futures debut, the value of the digital currency has surged. Bitcoin's introduction to the CBOE has been seen by some as a step towards legitimising the currency. The move is expected to be followed next week by a rival listing on the Chicago Mercantile Exchange. Anticipation of the first mainstream listings have helped the controversial currency soar past $10,000 and then over $17,000 on Thursday before retreating. Bitcoin was trading at about $15,230 on Monday, according to Coindesk.com.
Source: BBC News
________________________________________
Company news
Jangada Mines (LON:JAN,4.88p) – Speculative Buy
Jangada Mines, a natural resources company developing South America’s largest and most advanced platinum group metals (PGM) project, announced today that the relevant Brazilian municipal government has authorised pilot scale production at the Pedra Branca project in north-eastern Brazil. As such, the Company now intends to make a trial mining licence application during Q1 2018. The Pedra Branca project comprises four main deposits and management is focused on bring the easily accessible high-grade surface oxides from the Curiu and Esbarro deposits into trial production in 2018.

Our view: The above announcement demonstrates the level of support for the development of the Pedra Branca project. The near surface high-grade oxide layer is amenable to low-capex and opex costs with the potential to produce a PGM-bearing concentrate through a simple gravity separation and floatation process. We look forward to continued development of the project including the Pre-Feasibility Study in Q1 2018. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Jangada Mines Plc
Sunrise Resources (LON:SRES, 0.17p) – Speculative Buy
Sunrise has announced it has received permission to undertake its Phase 2 drilling programme at the CS Project in Nevada. It is calling this “Mine Plan Drilling” since it will be used to define the open pit and mining license footprints for a pozzolan and perlite mining operation. Note that “test results from Phase 1 drill samples, surface and trench samples meet the key ASTM strength requirements for natural pozzolan across a very wide area of the property”. i.e. drilling is less exploration, more fine tuning and for permitting.

Our view: This news follows the placing announced last week, so the 22 hole Phase 2 drilling is fully funded. Timing of Phase 2 is to be determined (we think contractor availability) but will probably be in 1Q18. The CS Project is progressing well on site and in the lab. We look forward to positive developments on the marketing side. We reiterate our Speculative Buy recommendation.

Beaufort Securities acts as a corporate broker to Sunrise Resources Plc

Tiziana Life Sciences (LON:TILS, 153.00p) – Speculative Buy
The clinical stage biotechnology company developing targeted drugs for cancer and inflammatory diseases, on Friday announced that the independent data monitor committee (IDMC) completed interim analysis of the safety and pharmacokinetic data from the first six patients and concluded that treatment with Milciclib was safe and well-tolerated with no drug-related serious adverse events (SAEs) in patients with unresectable or metastatic HCC. The IDMC recommended continuing with the trial. Formal establishment of safety in HCC patients was a key pre-requisite to move forward with the further clinical development of Milciclib; the treatment regimen (100mg/day; 4 days: ON/3 days: OFF, every 4 weeks) was determined as safe and well-tolerated with no drug-related SAEs in patients.

Our view: More positive safety data! The next step, a Phase 2b trial to evaluate safety and clinical activity of Milciclib in combination with sorafenib (Nexavar; Bayer Germany) in HCC, is expected to start in Q2’2018. Unresectable or metastatic HCC is an aggressive type of liver cancer for which no satisfactory treatment is currently available. The trial findings remained consistent with those already reported on the drug’s long-term safety and clinical activity in thymic carcinoma, thymoma and other solid cancers. This is therefore another important milestone as clinical trials are moved forward. Intense development of such potential blockbusters, for which global market opportunity runs into several billions of US$, means that for now Tiziana will must remain a cash consumer, part of which was facilitated by November’s recent fundraising. While the Company has a particularly exciting pipeline of products and opportunities, for prudence Beaufort has modelled the opportunity based just on its most advanced developments, foralumab and milciclib, by applying a relatively aggressive 15% discount to its long-run cashflow projection. This creates a valuation more than twice the current level based on anticipated milestone fees & royalties. In light of this continued progress, Beaufort reiterates its Speculative Buy rating on the shares together with a price target of 400p/share.

Beaufort Securities acts as a corporate broker to Tiziana Life Sciences plc

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Mon, 11 Dec 2017 09:12:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29091/beaufort-securities-breakfast-alert-jangada-mines-sunrise-resources-tiziana-life-sciences-29091.html
VSA Market Movers - Goldplat http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/29090/vsa-market-movers-goldplat-29090.html Goldplat - LON:GDP
Goldplat   has provided an update in relation to its arbitration with Rand Refinery as well as general corporate activity, both of which indicate positive progress. An agreement on an arbitration process has been determined and dates for the proceedings have been set for June 2018.

Aside from the arbitration, GDP’s operational progress continues to be robust with key development projects running in line with expectations. The elution plant construction in Ghana is on track for before the end of December 2017 as previously indicated while positive progress continues to be made regarding the treatment of artisanal tailings. The Ghanaian Ministry of Mines is actively working with GDP on this project. At Kilimapesa the target for 5.8koz has been reiterated and at this level of production we continue to expect a return to profitability at the asset.

In South Africa, GDP has built a strategic stockpile in excess of a year’s planned production for the carbon in leach circuit. Work is now being carried out to optimise recoveries and therefore profitability. This is further evidence of GDP’s proactive approach towards providing longer term clarity in terms of sourcing material in addition to the dedicated sourcing teams now operating in Africa and South America.

We reiterate our Buy recommendation and 17p target price.

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Mon, 11 Dec 2017 09:06:00 +0000 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/29090/vsa-market-movers-goldplat-29090.html
Summits up with Central Banks http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29089/summits-up-with-central-banks-29089.html FTSE 100 Index called to open +25pts at 7420, having broken above the 7415 barrier we highlighted last week, which opens the door for a run to the late November high of 7473. Bulls need a break above 7427 overnight, bears a breach of the 74115 breakout. Watch levels: Bullish 7430, Bearish 7415.


Calls for gains at the open come thanks to Asian equities following Wall St higher, and a GBP pullback, with the likes of HSBC already welcoming Wednesday’s Fed rate hike which may help sector peers. Miners reacted well to both the weaker USD and Friday’s China trade data, even if the nation’s inflation metrics disappointed over the weekend begging questions about global growth and credit curbs. Oil majors are also helping thanks to oil price buoyancy.


In corporate news, BAE Systems finalises £5bn contract with Qatar for 24 Typhoon combat planes. AstraZeneca says calquence shows potential in chronic lymphocytic leukaemia trials. Babcock confirms no contract revenue/profit recognition changes required for adoption of IFRS 15. Centrica says its Spirit Energy JV with Norway’s Bayerngas Energy has begun trading.


Photo-Me 1H profits boosted by higher laundry sales. Premier Oil sells 30% stake in ETS Pipeline for £23.6m. Genel Energy says production from Peshkabir field in Tawke licence (25% stake) in Kurdistan has tripled to 15K bopd /day.


US equity markets closed higher again Friday, with more record highs, helped by the US labour report, tax reform optimism and no government shut-down (albeit temporarily).


Crude Oil prices have found fresh support (US Crude $57, Brent $63.5) after Friday’s volatility to hold their OPEC/NOPEc bounce and keep alive the uptrends from July. This despite Kuwait’s Oil minister suggesting the production cut agreement may need to end in 2019 is the oil market rebalances by June.


Gold has extended Friday’s bounce from  late July lows of $1244, helped by a USD pullback (consolidating some of its recent tax reform inspired rally, this week’s Fed rate hike 98% priced in) to make the yellow metal slightly cheaper for non-USD buyers. However, it has yet to get back above the prior breached support level $1252, driven more more by FX than safehaven demand.


In focus today, with an almost empty macro data docket, is likely to be the  week ahead with policy updates from the US Federal reserve (Weds) and both the Bank of England and ECB (Thurs). While the former is expected to hike rates, it is the outlook from the trio that may move markets.


Other major events this week include Tuesday’s Paris Climate summit, and Thurs/Fri European Leaders summit in Brussels following Friday’s last minute UK-EU Brexit progression deal (EU citizens' rights, Irish border) allowing the UK to move on to phase two (trade, transition period).


Key macro data includes UK and US inflation (Tues & Weds), UK Jobs (Weds), China Industrial Production & Retail Sales (Thurs) and US and Eurozone PMI Manufacturing (Thurs) and US Retail Sales (Thurs). All have potential to impact sentiment on both currencies (GBP, EUR, USD) and equities/indices by virtue of what it implies for corporate and consumer sentiment and global growth.

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Mon, 11 Dec 2017 08:58:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29089/summits-up-with-central-banks-29089.html
Stronger for Longer http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29088/stronger-for-longer-29088.html Video Commentary for December 8th 2017


Eoin Treacy's view
A link to this week's Big Picture video is posted in the Subscsriber's Area.


Stronger for Longer
Thanks to a subscriber for this report from Morgan Stanley focusing on the outlook for 2018. Here is a section on Japan:
A section from the report is posted in the Subscriber's Area.


Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

Japan has been fighting deflation for so long very few believe it will ever overcome the challenges it faces. However, Japan is now one of the only countries running both easy monetary and fiscal stimulus. The only thing we can definitely credit quantitative easing with in the USA is asset price inflation and that should be equally true of Japan.

Musings From the Oil Patch December 5th 2017
Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB which may be of interest. Here is a section:
A section from the report is posted in the Subscriber's Area.


Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

Tesla’s high profile makes it a target for just about every other automotive company regardless of the fact it does not make a profit on its vehicles. The fact General Motors loses as much as $9000 per electric vehicle is also a testament to the fact that battery technology and manufacturing capacity is still an evolving theme.


Email of the day on bitcoin and manias
One more question about bitcoin, if you please (honestly, I am a bit tired of the subject - is it another sign of a bubble?).
Interestingly, but in the past bubbles had been initiated by professional traders, many of whom stayed in the market till the crash and suffered losses, while individuals piled in at later and final stages (think of tulipmania, 1929, dotcom, etc.). So, when you saw a lot of individuals and inexperienced investors in the asset in question, with their enthusiasm turning into euphoria, and professionals talking the asset up, you knew that the end was in sight.

And with bitcoin we have quite the opposite. Just consider this abstract from recent Wall Street Journal article, "At the Asia Securities Industry & Financial Markets Association’s annual conference in Hong Kong on Wednesday, only two of about 150 professional investors raised their hands when asked if they had invested during a session on cryptocurrencies. “It’s incredible that we’re [seeing this] at a finance event, but it’s actually very common,” said the panelist Henri Arslanian, PwC’s China and Hong Kong leader for finch. Mr. Arslanian, who also teaches a fintech course at the University of Hong Kong, said when he asks his students that same question, usually about 30% of them say they own virtual currencies.
So, what can it possibly tell us about the nature of this market and its prospects?

PS. This WSJ story, published on November 29, had beautiful chart (please find attached). I just think that they are wrong to begin bitcoin bubble this year. I looked at bitcoin chart at FTM library and think that it is finishing its second bubble year, since in 2016 it rose more than 100%, from about $430 to $1,000, and began really buzzing last year, with the current one bringing euphoria.


Eoin Treacy's view
Thank you for this thought provoking question. I remember back in the early 2000s, when I was a salesman at Bloomberg, going to see private banks in Belgium and Luxembourg. There were a lot of young bankers a little older than myself. They had been hired in because the older generation needed young people who knew something about this “new economy”, that all the clients wanted to invest in. Simply by virtue of being young they knew more about the internet than their older peers.

If cryptocurrencies were exchange traded, I believe the same thing would have happened on this occasion. However, because they are completely outside the realm of what is regulated as a financial instrument it is not possible for institutions to currently open trading desks. That is the primary reason behind the rush to open futures trading. It will give financial institutions the opportunity to offer products both long and short.    


Modi May Face a Photo Finish in Crucial State Election
This article by Iain Marlow for Bloomberg may be of interest to subscribers. Here is a section:
Most observers expect Modi to win the Gujarat election when votes are counted on Dec. 18. But the narrowed lead is surprising for a bastion of BJP support such as Gujarat, as well as for Modi, whose party has swept to power in most state elections since he took national office in 2014.

Capping days of relentless campaigning, Modi said in a rally in Surat that people of Gujarat would vote for the BJP. “My single aim is to ensure development and improve the lives of the poor,” he said on Thursday.

Anything other than a comfortable victory for Modi would surprise investors betting on a clear win in Gujarat, as well as five more years of Modi’s government on the other side of 2019. "Market assumptions so far have been of a comfortable BJP victory in Gujarat, and that the momentum continues till 2019," wrote Mumbai-based Credit Suisse analysts Neelkanth Mishra and Prateek Singh in a Dec. 5 note.


Eoin Treacy's view
Elections have been catalysts for volatility, both up and down, in India over much of the last couple of decades. Modi led the BJP to victory for the first time in 14 years in Uttar Pradesh last July and that buoyed sentiment that he would carry over his majority into the 2019 general elections. The result was that the Nifty Index’s rally picked up, before pausing in August near the psychological 10,000.

Email of the day on the Boring Company and tunnel safety

Actually, tunnels are among the safest locations during earthquakes. Counter-intuitive, but true. Many miles of tunnels in earthquake-prone Japan. See this link. I live in the Los Angeles area, and cannot wait for the tunnels ah, earthquake shelters!


Eoin Treacy's view
Thank you for this insightful comment which was educative at least for me. Given LA’s traffic we’ve pretty much designed our life so it is contained within a 10-block radius. Our family drives less than 5000 miles a year without using public transport and including occasional day and weekend trips but anything that could reduce the gridlock between 4 and 7pm would be a gift for most Angelenos.


Eoin's personal portfolio update December 8th.


Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

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Mon, 11 Dec 2017 08:56:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29088/stronger-for-longer-29088.html
Bitcoin up, gold sideways as Donald Trump rips up old certainties in the Middle East http://www.proactiveinvestors.co.uk/columns/jackhammer/29087/bitcoin-up-gold-sideways-as-donald-trump-rips-up-old-certainties-in-the-middle-east-29087.html Fri, 08 Dec 2017 15:18:00 +0000 http://www.proactiveinvestors.co.uk/columns/jackhammer/29087/bitcoin-up-gold-sideways-as-donald-trump-rips-up-old-certainties-in-the-middle-east-29087.html Today's Market View - Atalaya Mining, Galileo Resources and Metal Tiger http://www.proactiveinvestors.co.uk/columns/sp-angel/29086/today-s-market-view-atalaya-mining-galileo-resources-and-metal-tiger-29086.html Atalaya Mining (LON:ATYM) – Raising £31m in placing at 167p/share
Galileo Resources (LON:GLR) – Interim Results
Metal Tiger (LON:MTR) – T3 underground mine potential

Faltering China drags commodities lower
• Signs of slowing growth in China are limiting successes in the commodity markets as the Bloomberg Commodities Index fell 4.1% in the past month, putting it on course for its sixth year of losses out of seven. Expectations for the transition in economic phase of the Asian nation are concerning investors as metal demand and investment may fall in 2018 on environmental cleanup actions and a cooling property market.
• The nations fixed-asset investment in infrastructure will grow 12% next year, according to the median estimate in a Bloomberg survey, down from almost 20% year-to-date 2017. The recent poor performance of copper can be attributed to early market hesitation.

Dow Jones Industrials  +0.29% at 24,211
Nikkei 225   +1.39% at 22,811
HK Hang Seng   +1.24% at 28,653
Shanghai Composite    +0.55% at 3,290
FTSE 350 Mining   +0.58% at 16,403
AIM Basic Resources   -1.57% at 2,529

Economics

Currencies
US$1.1746/eur vs 1.1790/eur yesterday           Yen 113.54/$ vs 112.66/$        SAr 13.683/$ vs 13.572/$            $1.351/gbp vs $1.338/gbp
            0.751/aud vs 0.753/aud            CNY 6.617/$ vs 6.616/$

Europe – Stocks rallied as Brexit negotiations make headway
• European stocks rose to weekly highs as Britain and the European Union announced a breakthrough in Brexit negotiations while supportive global banking regulations were seen as more beneficial to European banks.
• The early morning breakthrough in Brexit negotiations show a willingness for both parties to compromise with Bloomberg highlighting the main points of the deal:

o The U.K will contribute to EU budgets for the years 2019 and 2020 as if it had remained in the Union.
o The U.K will contribute its share of financing of EU budgetary commitments outstanding at 31 December 2020.
o The U.K. will contribute its share of the financing of the EU’s liabilities incurred before 31 December 2020.
o The citizens’ rights part of the final Withdrawal Agreement is to be interpreted in line with the case law of the Court of Justice of the European Union.
o In the context of the application or interpretation of those rights, U.K. courts shall have due regard to relevant decisions of the ECJ.
o There will be a mechanism enabling U.K. courts to ask the ECJ questions of interpretation and it will last eight years.
o The U.K. will either propose a solution for keeping the Irish border open that will be acceptable to the EU, or continue to by EU’s single market and customs union rules “which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement”.

Commodity News
Precious metals:         
Gold US$1,248/oz vs US$1,257/oz yesterday
• Gold continues its decline, as the precious metal fell to a four-month low of $1,244/oz, on firming dollar demand. Strong equities markets have continued to draw investment away from gold, with expectations for further growth building from economic stimulus with the passing of the US Republican tax plan. The release of the non-farm payroll data is expected to drive the short-term direction of the dollar, while the upcoming US Federal Open Market Committee meeting will confirm rising interest rates.
• The metal edged up in early Asian trading as bargain hunting investors look to secure growth in the metal, as geopolitical tensions with the Middle East have significant potential to rise. Pressure was building as President Donald Trump recognised Jerusalem as the capital of Israel.
   Gold ETFs 71.7moz vs US$71.9moz yesterday
Platinum US$896/oz vs US$900/oz yesterday
Palladium US$1,019/oz vs US$1,000/oz yesterday
Silver US$15.78/oz vs US$15.89/oz yesterday
           
Base metals:   
Copper US$ 6,599/t vs US$6,600/t yesterday
• China’s tightening controls on copper concentrate imports are forcing low-quality suppliers to find alternative offtake partners. Improving environmental limits are clamping down on foreign solid waste with the General Administration of Quality Supervision, Inspection and Quarantine allowing maximum lead content of 6%, while the threshold for arsenic set at 0.5%, fluorine 0.1%, cadmium 0.05% and mercury 0.01%.
• The cuts in “foreign garbage” are aimed at reducing the strain on toxic and harmful elements within Chinese facilities. New rules are being implemented immediately, with November’s record imports at 1.78 million tonnes expected to contract under the updated limits. In order to match the loss in supply, imports of unwrought copper to the world’s top copper consuming country show a strong rise. Arrivals of unwrought products, which includes anode, refined, and semi-refined, rose 42.3% from October (23.7% yoy) to their highest level since December 2016.
• China’s second largest copper smelter began halting capacity last week at its main production hub in Tongling after local government ordered curbs as part of national plan to ease pollution
• Halted 20-30% of smelting capacity from annual total of 800,000 metric tons – no timetable for how long will last
Aluminium US$ 2,013/t vs US$2,015/t yesterday
Nickel US$ 11,020/t vs US$10,815/t yesterday
Zinc US$ 3,095/t vs US$3,101/t yesterday
Lead US$ 2,450/t vs US$2,508/t yesterday
Tin US$ 19,430/t vs US$19,475/t yesterday
           
Energy:           
Oil US$62.3/bbl vs US$61.5/bbl yesterday
Natural Gas US$2.778/mmbtu vs US$2.856/mmbtu yesterday
Uranium US$25.00/lb vs US$25.50/lb yesterday

Bulk:   
Iron ore 62% Fe spot (cfr Tianjin) US$66.1/t vs US$67.2/t
• Iron ore imports rebounded in November to highest levels on record with appetite in worlds top buyer remaining strong even as steel mills cut output
• Rose 18.9% to 94.54 million tonnes in November and were up 2.8% from a year ago
Chinese steel rebar 25mm US$745.2/t vs US$750.6/t
Thermal coal (1st year forward cif ARA) US$86.3/t vs US$85.9/t
Premium hard coking coal Aus fob US$231.2/t vs US$231.7/t
           
Other:  
Tungsten APT European US$291-300/mtu vs US$275-285/mtu last week
Cobalt LME 3m US$71000/t vs US$69900/t yesterday

Company News
Atalaya Mining (LON:ATYM) 166.5 pence, Mkt Cap £194.3m – Raising £31m in placing at 167p/share
• Following the recent announcement of the decision to expand the operations at Proyecto Riotinto to 15mtpa capacity from its current 9.5mtpa throughput, Atalaya Mining has announced the completion of a placing of approximately 18.57m new shares at a price of 167p/share to raise £31m.
• The placing, which represents around 16% of the company’s current issued capital, was supported by Atalaya’s principal shareholders and leaves Trafigura with approximately 22.8% of the enlarged company, Yanggu Xiangguang Copper with 22.7%, Liberty Metals with 14.5% and Orion Mine Finance with 13.9%.
• Commenting on the transaction, CEO, Alberto Lavandiera said “The Company welcomes the support from existing shareholders and new institutional investors through the Placing. The funds raised will allow the Company to begin executing on its 15 Mtpa Expansion plan immediately."
• We note that the company’s original announcement on 4th December indicated a planned placing of £39m.
Conclusion: The availability of additional financial backing will allow Atalaya Mining to press ahead immediately with its expansion plans at Riotinto. As we commented in relation to the approval of the expansion plan, Atalaya Mining’s plan to increase the capacity of its Riotinto operation is a relatively low-risk incremental expansion of an existing operating mine where management has already delivered previous expansion projects smoothly and we envisage that they will be able to deliver a similar outcome with the latest expansion.

Galileo Resources (LON:GLR) 1.375 pence, Mkt Cap £3.5m – Interim Results
• The company has reported a loss of 0.1p/share for the six months ending 30th September 2017 (2016 interim loss of 0.3p/share).
• Galileo Resources reports a cash balance of £1.13m at 30th September and an operating outflow of cash of £366,000 for the six month period suggesting that, at present, the company is adequately financed for its current activities.
• Exploration activity at the Concordia copper project in S Africa, where the company is in joint venture with Shirley Hayes, has been discontinued and Galileo Resources’ “interest in Concordia will be diluted to 15% from 51%.”
• Pre-feasibility studies are continuing on the Glenover Phosphate project in S Africa where the approval of a Mining Right application from the Department of Mineral Resources is pending.
• In Zambia, an initial 1750m drilling programme is expected to start imminently at the Star Zinc project “and will target a mix of resource confirmation and resource enlargement.”
• In Nevada, following the withdrawal of its joint-venture partner, Orogen Gold from all its exploration activities and a review of the results obtained, Galileo Resources has “decided not to renew the licence for the Silverton project.”
Conclusion: Galileo Resources appears to be focussing on the Star Zinc project in Zambia and its Glenover Phosphate project in S Africa, withdrawing from its US exploration and diluting its interest in the S African Concordia Copper Project.

Metal Tiger (LON:MTR) 1.95 pence, Mkt Cap £20.7m – T3 underground mine potential
• Metal Tiger plc draws attention to the announcement by its partner, MOD Resources on progress with evaluating the underground mining potential of the T3 copper discovery in Botswana (MOD Resources 70%, Metal Tiger 30%).
• The company has now drilled 45 holes since August in areas outside the proposed 10-year open pit mining area at T3 and is aiming to produce an underground mine scoping study during Q3 2018.
• Among the results highlighted from the latest 8 holes drilled are:
o A 7.2m wide intersection at an average grade of 1.9% copper and 39g/t silver from a depth of 218.8m in hole MO-G-82D and
o A 5.9m wide intersection at an average grade of 1.7% copper and 8g/t silver from a depth of 213.1m in hole MO-G-84D and
o A 9.m wide intersection at an average grade of 1.5% copper and 31g/t silver from a depth of 168.3m in hole MO-G-88D and
• “South African mining consultants have conducted a preliminary evaluation of these veins to explore the potential for an underground mine (T3 Underground Project) in addition to the planned open pit. The work done to date assumes good continuity between the mineralised veins, relatively low cost in ore development and room and pillar mining. There may be substantial benefits in developing T3 underground simultaneously with the open pit mine and using shared infrastructure, including the planned T3 processing plant.”
• The company reminds us that the plant capacity “was recently upgraded to 2.5Mtpa (a 25% increase on the scoping study plant capacity) with potential for expansion up to 4.0Mtpa”.
• The T3 open pit resource, published in September 2016, amounts to 13.236m indicated and inferred tonnes at an average grade of 1.84% copper and 24.6g/t silver. In August 2017, following further drilling and the inclusion of additional low grade resources within the proposed pit, the T3 resources was upgraded to 36mt at an average grade of 1.14% copper and 12.8g/t silver.
Conclusion: The recent drilling is indicating potential for underground mining of the deeper mineralisation at the T3 discovery within the Kalahari Copper Belt in conjunction with the planned open pit. We look forward to further news as the programme develops.

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Fri, 08 Dec 2017 12:25:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29086/today-s-market-view-atalaya-mining-galileo-resources-and-metal-tiger-29086.html
Breakfast News - Angle, ReNeuron, Cloudbuy, Evgen Pharma and others http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29085/breakfast-news-angle-reneuron-cloudbuy-evgen-pharma-and-others-29085.html Dish of the day

No Joiners Today

Off the menu   

Datatec (LON:DTC) is leaving AIM but Johannesburg listing remains live.

   
What’s cooking in the IPO kitchen?

AIM

Erris Resources PLC—a mineral exploration and development company currently focused on two geographic areas. Offer TBC, expected 21 December 2017

CIP Merchant Capital—Closed ended investment Company. Sector focus oil & gas, healthcare, pharma, and real estate. Offer TBA. Due 21 Dec

Panthera Resources— The Company was established to act as a holding company for Indo Gold Limited, an unlisted Australian registered company. The Company aims to explore and develop gold assets in India and West Africa. Offer TBC, expected 20 Dec

Sumo Group—one of the UK's largest independent developers of AAA-rated video games providing both turnkey and co-development solutions, including initial concept and pre-production . Offer TBC. Due late Dec

Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017

Fusion Antibodies—contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications.  Offer TBA. Due Mid Dec.

Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m.  Due 19 Dec.

Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine.

Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with mkt cap of £17.4m. Acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago  with extensive drilling capabilities. 

Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity.  Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec.

Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT

Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native in-video advertising. 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 19 Dec.

OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.

Main Market Specialist Fund Segment

Sure Ventures –Raising  up to £50m at £1. Focus on FinTech, IoT and Augmented/Virtual Reality. Due 22 Dec.

Main Market Standard Listing

Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA.

Main Market Premium Listing

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

Greensphere Capital -$500m raise.  Aims to provide Shareholders with an attractive yield from a portfolio of sustainable infrastructure assets diversified by geographies and sectors and to realise long-term growth  capital value.  Due 20 Dec

Vivo Energy—The Africa-focused company, which operates around 1,800 Shell forecourts across 16 countries  reported by City A.M. to be preparing for a London float next year

Aberdeen Standard European Logistics Income—Investment Trust targeting £250m raise. Investing in a high quality portfolio of European logistics assets. Due 15 Dec.

Aviva Investors Secure Income REIT  - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due 15 Dec.

   
Breakfast buffet

Vela Technologies (LON:VELA) 0.55p £3.97m

The investing company focused on early-stage and pre-IPO disruptive technology investments, is pleased to announce that the Company has entered into a conditional agreement to invest £200,589 to acquire a minority equity stake in BlockchainK2 Corp. This is conditional on the investee Company raising  a total of C$2m.

BlockchainK2 is a cryptocurrency and blockchain platform that offers mining exposure and proprietary software as a service (SAAS) blockchain solutions with leading industry partners. The Proposed Investment will be funded from Vela's existing cash resources.

  Touchstone Exploration (LON:TXP) 12p £12.38m

Intends to complete a £3m private placement at 11.5p.

“The Company previously announced that it plans to drill four wells on its Coora 2 and WD-8 properties commencing in January 2018. The Company intends to use the net proceeds from the Private Placement of approximately £2.7m (approximately C$4.6m) to finance the expansion of Touchstone's 2018 drilling programme from four wells to ten wells. The additional wells are expected to be drilled on the Company's Coora 1, WD-4, WD-8 and South Palo Seco properties. In conjunction with the enlarged drilling programme, Touchstone's Board of Directors also approved a 24 well recompletion programme in 2018.”

ReNeuron (LON:RENE) 1.85p £58.55m

The “UK-based global leader in the development of cell-based therapeutics, is pleased to announce that it has established an office in Boston, MA, USA. This office will initially house the Company's US-based clinical, medical and scientific communications staff and reflects the Company's focus on clinical development activities in the US across its therapeutic programmes. 

During 2018, the Company plans to have three placebo-controlled Phase IIb clinical trials running with its CTX and hRPC cell therapy candidates, in stroke disability and retinal diseases. All of these studies will be conducted in clinical trial centres across the US.”

Bluejay Mining (LON:JAY) 22.5p £179.19m

Completion of maiden 2017 field work programme at the 100% owned Disko Nickel, Copper, Cobalt & Platinum Project in West Greenland. Surface sampling confirms working sulphide system with initial chemical assays in oxidised surface material returning 2.02% Nickel, 0.8% Copper, 0.2% Cobalt

•    Handheld XRF sampling on fresh, polished material returned values averaging between 4.6%-9.3% Nickel & 1.5 - 2.8% Copper

• Results from 2017 exploration work together with historical data will continue to be assessed in the coming months to refine targets for future exploration work

• Standalone exploration programme planned for 2018 to advance project understanding in  recently enlarged licence area, now comprising 970km2

Tiziana Life Sciences (LON:TILS) 145p £186.17m

The “clinical stage biotechnology company developing targeted drugs for cancer and inflammatory diseases, today announces that the independent data monitor committee (IDMC) completed interim analysis of the safety and pharmacokinetic data from the first six patients and concluded that treatment with Milciclib was safe and well-tolerated with no drug-related serious adverse events (SAEs) in patients with unresectable or metastatic  Hepatocellular Carcinoma (HCC).  The IDMC recommended continuing with the trial.”

As a next step, a Phase 2b trial to evaluate safety and clinical activity of Milciclib in combination with sorafenib (NexavarÒ; Bayer Germany) in HCC is expected to start in Q2, 2018.

Cloudbuy (LON:CBUY) 2.62p £3.42m

Roberto Sella, who has already provided significant financial support to the Company, has agreed to subscribe for up to a further £3.4m nominal value loan notes similar to those issued by the Company in April 2016. The Directors currently believe that the initial issue of £1.7m nominal value New CLS will be sufficient to take the Company to profitability. Cloudbuy has exited numerous markets where revenue traction was slow and has also  focussed resource on the PHBChoices UK care marketplace through its customer NHS Shared Business Services Limited.

FYDec17E rev £1.8m and pre-tax loss £2.3m.

 

Angle (LON:AGL) 47.5p £55.6m

The “liquid biopsy company, is delighted to announce that the University of Southern California (USC) Norris Comprehensive Cancer Center yesterday presented results of extensive work with ANGLE's ParsortixTM system at the San Antonio Breast Cancer Symposium (SABCS) detailing how the system can be used to obtain comparable gene expression information from a simple blood test in place of an invasive solid tissue biopsy of a metastatic site. “ ANGLE is working towards an FDA clearance of the Parsortix system in metastatic breast cancer with the required analytical and clinical studies targeted for completion by 30 June 2018.

Evgen Pharma (LON:EVG) 16.63p £12.32m

Conditional £2.3m placing at 12 p and HY Sep 17 results. £1.7m loss with cash and short term investments of £2.2m.

Good progress in the Company's Phase II metastatic breast cancer clinical trial ('STEM') of SFX-01, the Company's lead product. Seven sites open for recruitment across UK, Belgium and Spain. On track to report in second half of 2018 with interim read-out in H1 2018

Phase II subarachnoid haemorrhage stroke trial ('SAS') of SFX-01 on track to report around the end of 2018

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Fri, 08 Dec 2017 11:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29085/breakfast-news-angle-reneuron-cloudbuy-evgen-pharma-and-others-29085.html
Beaufort Securities Breakfast Alert : Savannah Resources http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29084/beaufort-securities-breakfast-alert-savannah-resources-29084.html Markets
Europe
The FTSE-100 finished yesterday's session 0.37% lower at 7,320.75, whilst the FTSE AIM All-Share index was down 0.10% at 1,010.42. In continental Europe, the CAC-40 finished at 5,383.86 whilst the DAX ended the session at 13,045.15.
Wall Street
Last night in New York, the Dow Jones closed 0.29% higher at 24,211.48, the S&P 500 added 0.29% to end at 2,636.98, and the Nasdaq finished 0.54% higher at 6,812.84.
Asia
In Asian markets this morning, the Nikkei 225 was up 1.28% at 22,786.13 and the Hang Seng was 1% higher at 28,585.25.
Oil
In early trade today, WTI crude was 0.02% higher at $56.7 per barrel and Brent was up 0.03% at $62.22 per barrel.

Headlines
CBI: Business needs more Brexit clarity
More clarity on the Brexit transition is needed to stop companies proceeding with contingency plans despite the progress announced on Friday, the CBI has warned. Paul Drechsler, president of the business lobby group, said companies had begun triggering plans months ago. However, more detail could help suspend further action by firms, he said. Sterling was trading higher at just under $1.35 and €1.15 after the announcement in Brussels on Friday. The CBI chief also called for "unconditionality" about the status of EU citizens living in the UK. "It's an important political milestone, but clarity on transition is the most important thing from a business point of view at this stage," Mr Drechsler told BBC Radio 4's Today programme. The Institute of Directors echoed the CBI call for certainty on the rights of EU citizens. Stephen Martin, IoD director-general, said companies urgently needed certainty about the future of EU staff in the UK. "We have grounds to hope now that our members will be able to send their employees off for the Christmas break feeling more comfortable about their status here," he said. "We look forward to further clarity about what the UK's objectives are for that new relationship, as well as a firm commitment on transition in the very near future."
Source: BBC News

Company news
Savannah Resources (LON:SAV, 5.40p) – Speculative Buy

Savannah announced yesterday that commissioning of the pilot processing plant for its bulk metallurgical test work programme at the Mutamba Mineral Sands project in Mozambique is now complete. The 20 tonne per hour pilot will produce bulk samples of concentrate for metallurgical and product testwork as part of the Pre-Feasibility Study (PFS). Savannah holds a 20% interest in the project and has the right, subject to key milestones being met, to earn up to a 51% as stated in the Consortium Agreement signed with Rio Tinto on 11 October 2016. The Consortium is targeting first production in 2020 with an estimated annual production of 456,000t of ilmenite and 118,000t of non-magnetic concentrate over a 30-year mine life. Total resource for the Mutamba project stands at 4.4Bt grading 3.9% THM (total heavy minerals).

Our view: We are encouraged with the pace of development at Mutamba since the Scoping Study released earlier this year. The pilot plant will produce bulk samples necessary for metallurgical test work and final products for test marking. The TiO2 pigment industry continues to gain strength on the back of strong demand for feedstock which should help support current prices moving forward. On aggregate, the Mutamba resource compares favourably with other major African based mineral sand deposits. We look forward to further updates as the project moves through the commissioning phase. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as a corporate broker to Savannah Resources Plc

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Fri, 08 Dec 2017 09:28:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29084/beaufort-securities-breakfast-alert-savannah-resources-29084.html
Another overNIght breakthrEU http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29083/another-overnight-breakthreu-29083.html FTSE 100 Index called to open +15pts at 7335, after finding support at 7310 overnight to maintain the trend of rising lows since yesterday’s base. That said, intersecting highs resistance from end November still looms large at 7370. Bulls need a break back above 7340; Bears a breach of 7310. Watch levels: Bullish 7345, Bearish 7310.
Calls for gains at the open stem from a negative reaction by GBP to news of a breakthrough in UK-EU Brexit negotiations (buy the rumour, sell the fact?), helping boost sentiment towards the FTSE’s many internationally exposed blue-chips. Also helping is a strong session in Asia after stellar China trade data (exports growth twice as good) appeasing worries about a credit bubble and curbs that would impact growth.


We also had a positive session in the US thanks to a 2-week debt ceiling extension, continued optimism about tax reform and an ongoing tech rebound, extending the dollar’s recent bullish reversal. In turns this is helping Germany’s DAX outperform via an extension of recent and reciprocal EUR weakness, something exacerbated by yesterday's GBP rally in anticipation of today's breakthrough news.
FTSE Banks may like an element of Brexit clarity. FTSE Miners may benefit from the double whammy of China trade data and a weaker GBP vs USD as Sterling gives up overnight highs, not convinced by Brexit deal, and the Dollar gains more ground on tax reform optimism and aversion of a government shutdown. Oil majors may like the weaker UK currency and oil prices holding yesterday’s bounce.
In corporate news, International Consolidated Airlines says BA to launch new flexible benefits pension scheme with new DC scheme, closing main DB scheme (£2.8bn deficit). Proposed merger of Vodafone Malta and Melita terminated. Berkeley Group upgrades 2yr and 5yr profit guidance.


US equity markets closed higher across the board on Thursday as the Tech sector extended its rebound from lows and the government agreed an extension to its debt ceiling. This rebound helped the Nasdaq to outperform, while both the Dow Jones and S&P 500 closed 0.3% as large-cap names led stocks higher on the former, while the Tech sector led the latter.


Crude Oil prices have traded sideways overnight having recovered from Wednesday’s inventories-based sell-off, however both major benchmarks remain subdued by week long falling highs resistance. Brent crude trades $62.8, looking for a breakout from $62.9, while West Texas trades at $56.6, less than $0.1 from resistance.


Gold has bounced from overnight 4-month lows having seen its 2-week sell-off continue on Thursday. The precious metal will likely be driven today by US economic data this afternoon, as it looks to extend its bounce from $1244 lows.


In focus today will be the fallout from an 11th hour Brexit deal between the UK and EU, sufficient progress having been made on the Irish border issue, clearing the path for the second round of negotiations and, most crucially, the beginning of long overdue trade talks. Subject to a confirmation vote at next week’s 14-15 December summit in Brussels, things are about to finally move on.


Across the Atlantic, investors are also anticipating the November US Jobs Report (1:30pm) and the all-important Non-Farm Payrolls print which, like ADP on Wednesday, may show a normalisation after October’s storm related jump. That said the US jobs market is the least of Trump or the Fed’s worries, with inflation more of a sticking point. In which case wages growth may again steal the show.


Other data of note today includes UK Industrial, Manufacturing & Construction Production (9:30am), with Industrial and Manufacturing both seen flat on a monthly basis whilst accelerating to 2017 highs on a yearly basis, while Construction is expected to return to monthly growth and rebounding from an 18-month yearly low. This afternoon, the UK NIESR GDP Estimate (1pm) is expected to show a slight downward revision while the US University of Michigan Sentiment (3pm) turns back towards October’s 13-year high reading.

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Fri, 08 Dec 2017 09:08:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29083/another-overnight-breakthreu-29083.html
Bitcoin's Future Is All Mapped Out http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29082/bitcoin-s-future-is-all-mapped-out-29082.html Bitcoin's Future Is All Mapped Out
This article by Marcus Ashworth for Bloomberg may be of interest to subscribers. Here is a section:
And, in fairness, there's a game attempt to stop this being completely off-the-scale Wild West stuff. It's a cash-settled futures contract in U.S. dollars, with no actual delivery of Bitcoin required. The exchange will impose a minimum initial margin -- the deposit required to trade a specified amount of futures contracts -- of 35 percent. That's seven times more than for trading oil or mini-S&P equity futures. There will be a twice-daily requirement to make sure the 35 percent buffer is intact, given Bitcoin's constant swings. Clearing members can impose a higher limit if they want. Two-minute trading breaks will kick in if the daily price moves 7 percent away from the previous day's settlement price, then again at 13 percent and a hard limit at 20 percent when all trading will cease unless trading can restart within that band. There are no stated plans to offer options on the futures, until the contract is fully established. That would be too much rocket fuel.

Eoin Treacy's view
Anticipation about the wall of money that could hit the bitcoin market with the introduction of futures is propelling speculation in the original cryptocurrency. This is an acceleration which is close to the ferocity of the move in 2013 when the price first managed to reach $1000 despite the fact it is multiples that level today. 

China's Banks Need More Capital After Credit Boom, IMF Says
Thanks to a subscriber for this article from Bloomberg News which may be of interest to subscribers. Here is a section:
President Xi Jinping has highlighted financial stability as a top priority. People’s Bank of China Governor Zhou Xiaochuan warned in October about the risk of a ‘Minsky moment,’ or a sudden collapse of asset values. Financial watchdogs last month promised to overhaul regulation of asset-management products, which hold about $15 trillion and are seen as a key threat to stability.

Speaking to media on Thursday on a video call, the IMF’s deputy director of monetary and capital markets, Ratna Sahay, said China’s financial system held three main risks. She pointed to an increase in credit that in other countries has been linked to financial distress. An increasingly complex and opaque financial system makes it hard to identify risks, and implicit guarantees encourage excessive risk-taking, she said.

Credit growth needs to slow, guarantees should be gradually removed, and banks need more capital during that process, Sahay said. “Banks need to have some buffers in order to protect against any possible distress that might happen,’’ she said.

Eoin Treacy's view
Financial stability is a priority for every country and just about everywhere has its own version of implicit guarantees. We can only imagine what would happen in the USA if the now explicit guarantee behind Fannie Mae and Freddie Mac were removed. What state would the financial sector be in now if the EU and UK had not stepped in to backstop it during what was dubbed a sovereign debt crisis but was in fact a cross border banking sector calamity? 

Stock Wobble No Help to Gold as Market Bets on U.S. Rate Hike

This note by Eddie van der Walt for Bloomberg may be of interest to subscribers. Here it is in full:
Falling stock prices and geopolitical risks haven’t done much to support gold amid expectations of tighter U.S. monetary policy.

Metal for immediate delivery fell to the lowest in four months at $1,252.44 an ounce in London, having dropped every day this week as traders factor in an increase in interest rates this month as a near certainty. Prices declined despite growing volatility in equity markets, with the S&P 500 Index losing ground in four of the last five sessions.

“The rate hike is now looming and people are suddenly realizing that gold may not be the most attractive long position at the moment,” said David Govett, head of precious metals trading at Marex Spectron in London.

Bullion is heading for the the first back-to-back annual advance since 2012, but traders recently have dented those gains. Higher rates and a change in leadership at the Fed have outweighed deepening geopolitical risks, including the threat of war on the Korean peninsula and a third intifada in Israel.

“People’s memories are short and their pockets not so deep,” Govett said.

Eoin Treacy's view
Gold does best when inflation is rising faster than central banks are willing to raise interest rates. That is when its credentials as a store of value really shine. Alternatively, it also does well in a supply inelasticity meets rising demand environment such as we saw in the last major bull advance that peaked in 2011. Right now, we are somewhere in between with expectations for future inflation outpacing the reality represented by official statistics so gold remains largely rangebound, albeit with a downward bias as of today.

EU Says Talks to Go All Night as Irish Deal Close
Here is the latest update on the UK’s negotiations with the EU on the status of the Irish border at the time of writing:
Talks will go through the night as the U.K. and European Union seek a deal on the status of the Irish border so that Brexit talks can finally move on to crucial trade negotiations.

"We are making progress but not yet fully there. Talks are continuing through the night,” chief EU spokesman Margaritis Schinas said in a Twitter post.

EU Commission President Jean-Claude Juncker has spoken to Irish Prime Minister Leo Varadkar and U.K. Prime Minister Theresa May by phone. EU Council President Donald Tusk is due to speak to reporters at dawn in Brussels on Friday.
The U.K. isn’t confirming that a deal has been done, nor whether May will head to Brussels.

If a breakthrough on the sensitive issue of the Irish border is reached -- and the Northern Irish kingmakers in the DUP accept it -- then the three key divorce issues will have been settled, allowing talks to move on to the future relationship and the transition deal that businesses are desperate to get in place. The pound rose 0.5 percent.


Eoin Treacy's view
British business wants a deal. The City of London, which represents a significant proportion of the economy, wants a deal. Therefore, despite sound arguments about the independence of Parliament and wish to have trade deals which are more positive for the UK, a deal remains likely as does a transition agreement which could be potentially lengthy.

Eoin's personal portfolio: currency trade opened

Eoin Treacy's view
Details of this trade are posted in the Subscriber's Area.

Eoin's personal portfolio update


Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

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Fri, 08 Dec 2017 09:05:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29082/bitcoin-s-future-is-all-mapped-out-29082.html
In The News - Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29081/in-the-news-metal-tiger-29081.html COMPANIES
Metal Tiger
LON:MTR 


More Positive Drilling Results at T3 Add Confidence to Potential U/G Development
Metal Tiger has announced the assay results for eight more holes from the T3 deposit on its 30%-owned Kalahari Copper/Silver JV in Botswana (MOD Resources holds 70%).
COMMENT: Of the eight holes, seven hit mineralisation (six of which included multiple intersections), extending the deposit down-dip of previous drilling and adding to the potential for the future development of an underground operation, which could augment production from the currently-planned open-pit project.
During 1Q18 the company is planning to announce an updated resource for the T3 Project, and also to release the PFS for the open-pit project, with the DFS to follow by the end of the year. The JV is targeting an open-pittable mineable inventory for the PFS of 25Mt at a grade of 1.1-1.2% Cu, containing around 275,000t of copper.
The JV has stated that it is considering the possibility of developing an underground operation simultaneously with the open pit, and is focused on increasing the production of profitable copper rather than mine life. It also notes the potential of the other satellite deposits in the area, such as the T1 deposit (100%-owned by JV partner MOD Resources), to supply higher-grade material to a central processing facility at T3. This suggests that the focus is on adding higher-grade underground material to increase the grade processed and copper output.
Exploration at T3 is continuing to deliver encouraging results and we await the results of the resource update and PFS with interest. We maintain our Buy rating and our target price of 3.6p. For further details see our initiation piece Metal Tiger — Earning its Stripes, 9 November 2017.

T3 is already an attractive project. The scoping study of December 2016 indicated the potential for the project to produce 22,000tpa of copper, with associated silver, at a C1 cash cost of US$1.29/lb and capex of US$135m, equivalent to a very competitive capital intensity of US$6,200/tpa. At a copper price of US$3.00/lb (cf the current price of US$2.97/lb) the pre-tax NPV10 was US$297m and the IRR 42%.


T3 resource update and PFS on the larger open-pit project due in 1Q18. An interim resource update was announced in August 2017, increasing copper from the 350,000t used in the scoping study to 409,000t. The ongoing infill drilling programme for the open-pit resource is nearing completion, with results planned to be released in January 2018. The PFS, also expected in 1Q18, will consider a throughput rate of 2.5Mtpa, 25% higher than that in the scoping study of late 2016.


Underground potential now the subject of a 30-hole drill programme. A three-rig drill program of around 30 holes is now planned to test the underground resource over a strike-length of 1.7km, initially to a depth of approximately 350-400m. Intersections from the latest announcement included 7.2m @ 1.9% Cu and 5.9m @ 1.7% Cu, with associated silver. Mineralisation dips shallowly to the north-west and is considered likely to be mineable using a room and pillar method. We anticipate that initial study work will be completed on the underground potential during 2018.


Kingsgate to hold a General Meeting on 9 January 2018. Kingsgate Consolidated (KCN AU | Mkt Cap US$69m), in which Metal Tiger holds a 6.7% stake valued at US$4.6m, has called a General Meeting for 9 January 2018. Metal Tiger requested the meeting and is seeking shareholder approval to replace three of Kingsgate’s four directors with five new Metal Tiger appointees. Both companies appear aware of the value of the Chatree mine in Thailand, but have a different view on how to best realise this for shareholders. Metal Tiger believes that it could come to a negotiated settlement with the Thai authorities that would allow a restart of the operation, while Kingsgate is pursuing compensation for the loss of the project under its political risk insurance cover and through arbitration under the Australia Thailand Free Trade Agreement.


BUY rating with a TP of 3.6p. The company’s current market cap is equivalent to approximately US$28m and our TP is based on a risked SoTP value of US$49m. This comprises US$13m of cash and investments, an adjustment of US$15m for corporate overheads, US$10m for the company’s other interests and a risked value of US$41m for its 30% interest in the Kalahari Copper JV.

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Thu, 07 Dec 2017 13:45:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29081/in-the-news-metal-tiger-29081.html
Oil price, Range Resources, Hurricane Energy And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29080/oil-price-range-resources-hurricane-energy-and-finally-29080.html WTI $55.96 -$1.66, Brent $61.22 -$1.64, Diff -$5.26 +2c, NG $2.92 +1c
 

Oil price
A sharp correction yesterday caused by the inventory figures, first the API and then the EIA. It was not crude that caused the trouble, the draw there was quite impressive but the build in gasoline stocks in particular. Refiners upped their runs to 93.8% which drew crude but added significantly to the gasoline stocks, nothing to worry about…
 

Range ResourcesASX:RRS
Things are beginning to happen for Range who had the drilling company acquisition approved last week and should be on for a reappearance on the market very shortly. Today they announce the preliminary result of well GY 684 on the Beach Marcelle field which was successfully drilled to 4,300′. Wireline logging has completed showing three target zones penetrated with the primary target zone ( the Lower Gros Morne Sands) in particular being better developed than anticipated. Approvals have been sought for perforating and production testing the well.


Hurricane Energy - LON:HUR
Hurricane is following up on its recent formation of a Listing and Governance Committee (LGC) by announcing that it has appointed Spencer Stuart to source a Non-Executive Chairman of the board. This process is being overseen by the Nominations Committee which after this appointment will add further Non-Executive Directors to ensure that the company is compliant with Code Provision B.1.2. Signs of maturity here which are most welcome, this is a growing company and complying accordingly.


This is an important step in the continuing process of HUR growing as it moves to the EPS on the Lancaster development. Investors who are understandably keen for news should find the next few months of significant interest, next week the company is hosting an investor and analyst site visit to Dubai  to view the Lancaster Early Production System (“EPS”) related works in Dubai. The ‘Aoka Mizu’ FPSO (“Aoka Mizu”), and the buoy and turret mooring system are critical to the EPS development and represents a majority of the overall development capex. This and further news on developments, as well as an imminent CPR, should ensure that investors remain confident of first oil from the EPS in 1H 2019.


And finally…
The Champions League was all tucked up before last night so the Noisy Neighbours losing to Shakhtar Donetsk was apparently in preparation for Sunday… The HubCap Stealers made hay in the retreat from Moscow and scored 7.

Tonight the Toffees are at Apollon Limassol which they will probably throw like the last one and the Gooners host BATE Borisov which they dont need to win.

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Thu, 07 Dec 2017 13:40:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29080/oil-price-range-resources-hurricane-energy-and-finally-29080.html
Today's Market View - Ariana Resources and Ironveld http://www.proactiveinvestors.co.uk/columns/sp-angel/29079/today-s-market-view-ariana-resources-and-ironveld-29079.html Ariana Resources (LON:AAU) – Increased ore resource estimate at Kiziltepe
Ironveld (LON:IRON) – Final results and update on Middleburg acquisition

SX-EX, LIARS AND LITHIUM DREAMS – is lithium the new oil?
• Investors are faced with a confusion of opportunities in the lithium space.  Below we offer some simple guidance on where to invest:
• Lithium demand looks set to outstrip supply with new supply not likely to catch up with expected demand growth for some years.
• Battery chemistries will change but we believe lithium should remain a core component battery metal due to its lightweight, conductivity and ability to store electrons.
• Tesla cars are already heavy at >2t mainly due to the nickel, steel, copper and other metals used so adding weight in not a popular option.
• Investors: many institutional investors appear reticent to buy into lithium projects in part based on potential changes in battery chemistry though this may partly be an excuse for avoiding the space.
• Bubbles: rapid growth in valuations for junior companies focussed on uranium and rare earths were short lived due to subsequent collapses in uranium and rare earth prices for very differing reasons.  Uranium prices collapsed on the Fukushima event and rare earth prices collapsed on the unwinding of a major REE-based Ponzi scheme in China.
• So why should lithium be different?
• Is lithium the new oil and how long will the supply deficit maintain elevated lithium prices?
• We think the uplift in lithium prices could last much longer than that seen for uranium and REEs as the major global economies drive new demand for battery powered EVs.
• Pollution is a hot political issue and new anti-pollution legislation may well be applied in the developing world as much as in developed nations.
• Investment: For investors the first thing to understand is where does lithium come from?
• Lithium sources:
• Brines – low operating cost for lithium extraction where grades are good, impurity levels are acceptable and where there is enough of a desert to enable sufficient solar evaporation, but long concentration times (12-18 months) limit supply reaction to evolving prices.
• Geothermal brines – are considered to be more environmentally friendly while a new chemical process is claimed can capture 91% of the initial lithium in the brine.
• Clays – largely unproven and don’t work well in the rain.
• Pegmatites – lower capital but higher operating costs. Consumers prefer low mica content and new regulations in China may make high mica concentrates hard to sell.
• Lithium producers:
• Chile (brines) – SQM and Albemarle are the big Chilean lithium miners.  Lithium was originally a by-product of potash production with relatively small demand but SQM and Albemarle are biggish companies and have invested heavily in billion dollar brine plants and evaporation ponds in the Atacama Desert. The evaporation ponds are expensive to construct but they harness the sun to increase lithium concentration in the brine.
• Argentina (brines) – a significant number of new junior lithium companies have set up camp in Argentina.  The problem with Argentina is that it rains allot more than in Chile, it is rarely mining friendly and when the government changes back to a Peronist-style regime the companies might just loose allot of their value. Many companies are proposing to use technology to extract lithium directly from lower grade brines but the economics of these processes are not yet well proven.
• Australia (pegmatites) – good for mining and for process technology.  Lithium contained in hard-rock pegmatites meaning that mining and process costs will be higher than for brines in Chile.  Australia is now the world’s largest producer of lithium proving that lithium extraction from pegmatites is a fair way to go even in a higher cost environment. Rapid production of direct shipping ore is boosting Australia output, however competition for limited Chinese conversion capacity may force operations down the pecking order. Pegmatite concentrates with higher levels of mica may struggle to find a home as the mica reduces energy efficiency and raises dust/pollution levels.
• Portugal / Spain (pegmatites) – a number of explorers are proving up lithium pegmatites in Portugal. Portugal has had a difficult mining history with labour and unions and suffers from the high price of the Euro but may prove to be a beneficial destination for lithium production from a European perspective. Close proximity to European automotive manufacturers will give desirable supply for product which has traditionally been sold for glass & ceramics. Savannah Resources and Plymouth Minerals are two lithium companies in Portugal and Spain.
• Mali (pegmatites) – well known for gold production, Mali offers a low cost destination and a sensible and stable political regime from a mining perspective.  A Chinese lithium processor has already offered to buy Birimian Limited in Mali and has subsequently invested in Kodal Minerals.
• Boliva (brines) – just don’t go there under any circumstances. It’s off the scale from a mining risk perspective and we understand Bolivian lithium brines contain awkward contaminants.
• Investment strategy:
• While it is possible for the major lithium brine producers in Chile to meet demand we believe they are slow in their production growth and are likely to fail to match the new growth in demand over the next 4/5 years. Focus on highest-quality brines to enhance production while minimising concentration period. (Brines can only be concentrated up to a precipitation point of around 6,000ppm so higher initial concentration will reduce evaporation times).
• New technology in the extraction of lithium directly from brines without the use of evaporation ponds is being trialled in Argentina and the US and offers potential for scaling up. The technology is not yet proven at a commercial scale and Argentina can be a difficult mining destination.  Production from Clays is some way off and is also untested from a commercial perspective.
• Hard rock, pegmatites: while lithium from pegmatites is seen as relatively high cost this is now the world’s largest source of lithium due to its relative simplicity and lower capital cost.
• Risks: The rising cost of reagents, chemicals, power and certain capital items is a risk as is the potential for changing battery chemistries. There is political as well as technology risk for the direct brine producers in Argentina and Chile. Government’s may choose to impose additional taxes on lithium producers as well as on EVs and there is always the problem of supplying sufficient electrical power for the new fleet of EVs on our streets. These are just a few of the risks ahead.
• Bank financing: so far banks have been reticent to finance lithium projects but with the LME poised to start trading in lithium futures contract in 2019 banks will have more reason to enter this market.
Conclusion: We advise investors to be careful in investing in the Lithium mining space but we feel there are good opportunities to be had with juniors which have the ability to push projects into production in the next few years.

China’s warm start to winter boosts steel mill profits
• Higher temperatures have allowed new construction projects to proceed that would normally have come to a halt,  pushing profits to highest since at least 2008
• Steady ongoing demand is exacerbating the supply shortfall caused by mills in 28 Chinese cities cutting output from polluting blast furnaces

Vale cuts nickel output but is positive on long term demand
• Brazilian miner, world’s top producer of the metal, pulled back it’s nickel output forecasts by 15% for the next five years
• Vale claims it is looking to preserve its nickel optionality ahead of expected boom in electric vehicles in the next decade
• This is an unusual statement for a mining company and suggests a new discipline coming into producers thinking
• It also indicates that Vale appreciates how difficult it is to find new sources of economically recoverable nickel as well as a realisation that nickel demand and prices are both expected to grow markedly over the longer term

Indices:          

Currencies:          
US$1.1790/eur vs 1.1814/eur yesterday.   Yen 112.66/$ vs 112.20/$.  SAr 13.572/$ vs 13.489/$.  $1.338/gbp vs   $1.340/gbp.     
0.753/aud vs 0.758/aud.  CNY 6.616/$ vs 6.615/$.

Precious metals:          
Gold US$1,257/oz vs    US$1,268/oz yesterday
   Gold ETFs 71.9moz vs           US$71.9moz yesterday
Platinum US$900/oz vs US$915/oz yesterday
Palladium US$1,000/oz vs         US$991/oz yesterday
Silver US$15.89/oz vs   US$16.14/oz yesterday
          
Base metals:    
Copper US$ 6,600/t vs US$6,551/t yesterday
Aluminium US$ 2,015/t vs US$2,048/t yesterday
Nickel US$ 10,815/t vs US$10,850/t yesterday
Zinc US$ 3,101/t vs US$3,080/t yesterday
Lead US$ 2,508/t vs US$2,475/t yesterday
Tin US$ 19,475/t vs US$19,450/t yesterday
          
Energy:
Oil US$61.5/bbl vs US$62.8/bbl yesterday
Natural Gas US$2.856/mmbtu vs US$2.936/mmbtu yesterday
Uranium US$25.50/lb vs US$25.40/lb yesterday
Lithium - New green source of lithium from geothermal power plant brine
• Brine produced by geothermal power plants is seen as an environmentally friendly source of lithium.
• The process works by passing through sorbent that catches ions before pumping back underground and collecting metal
• Researchers found that sorbent of aluminium hydroxide with lithium chloride captured 91% of initial lithium in brine

Bulk:    
Iron ore 62% Fe spot (cfr Tianjin) US$67.2/t vs US$69.5/t
Chinese steel rebar 25mm US$750.6/t vs US$760.9/t
Thermal coal (1st year forward cif ARA) US$85.9/t vs US$85.8/t
Premium hard coking coal Aus fob US$231.7/t vs US$221.8/t
          
Other:  
Iron ore 62% Fe spot (cfr Tianjin) US$69,900.0/t vs US$69,500.0/t - Vale threatens to flood iron ore market if prices surge
• Vale, the world’s largest iron ore producer says it is prepared to unleash as much as 50mt of spare capacity to balance market if prices got too high
• High prices would lure inefficient producers back into market and risk a repeat of past excess that led to $1tr in value destruction

Tungsten APT European US$000.0/mtu vs US$000.0/mtu
Quarterly hard coking coal US$170.0/t vs US$170.0/t

Company News
Ariana Resources (LON:AAU) 1.2p, Mkt Cap £12.6m – Increased ore resource estimate at Kiziltepe
• Ariana Resources has reported on its recent exploration work at the Salinbas project in north-east Turkey, located some 4km north of the 4m Hot Maden discovery. Ariana acquired the project in December 2016 from Eldorado Gold.
• In September 2017, the company re-reported an April 2015 JORC compliant resource estimate of 9.96m indicated and inferred tonnes  at an average grade of 2.03g/t gold  (648,900oz) and 10.2g/t silver (3.27m oz) at Salinbas.
• The recent work, including soil sampling and mapping has identified an anomalous zone of precious and base metals measuring approximately 550m x 150m at Salinbas North and has shown “Several precious and base-metal enriched extensions of the existing Salinbas resource [which]  demonstrate potential for further resource growth”.
• As a result of this preliminary work and revisions to the previously accepted geological interpretation, “The exploration team are currently working on plans for a drilling programme to be conducted on some of the areas referred to above, which is under consideration for 2018.”
Conclusion: The recent work by Ariana has shown possible extensions to the Salinbas mineralisation which may be followed up with drilling in 2018. The location near to the Hot Maden discovery, which was acquired by the US based royalty company, Sandstorm Gold, earlier this year in an all share deal worth a reported £167m, no doubt provides encouragement for the wider exploration potential to expand Salinbas. We look forward to further news when drilling gets underway.

Ironveld (LON:IRON) 2.375p, mkt cap £13.2m – Final results and update on Middleburg acquisition
• Ironveld reports a loss of £0.74m (0.2p/share) for the year ending June 2017 (2016 loss £0.59m or 0.18p).
• The company continues to pursue its acquisition of the smelting facilities at Middleburg where it remains in discussions “with Ironveld Middelburg, a subsidiary of the Company, to acquire the Smelting facility. … [and] … “Offtake agreements are in place for HPI [High Purity Iron], Vanadium and Titanium for the first five years of production”.
• Expressing confidence in a successful outcome to these discussions the company reports that “Considerable time has been spent by management on site at the Middelburg Smelting facility, preparing for the commencement of operations. However, no further work will be done until the funding for the acquisition has been concluded and the necessary upgrades have been made.”
• Negotiations are underway with local landowners for access and licences have been received for Air Emissions from the Department of Economic Development and Tourism. Licence applications for a Water Use Licence have been submitted to the Department of Water Affairs.
• Commenting on developments during the year, which included a strategic shift of direction, CEO, Peter Cox said “During the Period, we shifted our immediate focus from constructing a 15 MW smelter to securing the acquisition of the Middelburg Smelting facility, to enable early production and allow us to begin selling to offtake partners, generating revenue and cash flow for the Company. Although progress has been slower than we hoped, we remain confident in finalising funding arrangements that would allow for the necessary refurbishments to the Smelting Facility to be completed and for smelting and refining of our magnetite ore to commence.”
• Following two  fund-raisings, totaling £2.1m during the year, the company reports cash of £788,000 at 30th June. A subsequent funding round of £1.765m should see Ironveld with sufficient funds to continue its negotiations.
Conclusion: Ironveld is continuing its protracted negotiations to acquire Middleburg and while expressing optimism as to a successful outcome no estimate of the likely timing has been disclosed.

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Thu, 07 Dec 2017 10:48:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29079/today-s-market-view-ariana-resources-and-ironveld-29079.html
VSA Capital Market Movers - Novo Lítio http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/29078/vsa-capital-market-movers-novo-ltio-29078.html Novo Lítio (ASX:NLI)
Novo Lítio provided an update on the legal proceedings yesterday. NLI had been progressing through an expedited procedure to protect the 7th December mining license application cut-off date. However, the court in Braga has determined that this is no longer necessary since the vendors Lusorecursos (LR) have submitted an application which protects that date. The court has therefore determined NLI’s rights over the asset may now be determined via the main legal case which will take longer. NLI in response have submitted their own comprehensive mining plan and license application in the event that LR’s application is rejected due to a lack of technical or financial capability.

NLI have indicated that they will provide further updates in the coming weeks.

We reiterate our Speculative Buy recommendation and A$0.2/sh. target price.

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Thu, 07 Dec 2017 08:41:00 +0000 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/29078/vsa-capital-market-movers-novo-ltio-29078.html
Beaufort Securities Breakfast Alert : Ariana Resources, Fox Marble and Xtract Resources http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29077/beaufort-securities-breakfast-alert-ariana-resources-fox-marble-and-xtract-resources-29077.html • Ariana Resources (LON:AAU)
• Fox Marble (LON:FOX)
• Xtract Resources (LON:XTR)

Markets

Europe
The FTSE-100 finished yesterday's session 0.28% higher at 7,348.03, whilst the FTSE AIM All-Share index was down 0.90% at 1,011.53. In continental Europe, the CAC-40 finished 0.02% lower at 5,374.35 whilst the DAX was down 0.38% at 12,998.85.
Wall Street
Last night in New York, the Dow Jones closed 0.16% lower at 24,140.91, the S&P-500 fell 0.01% to end at 2,629.27, while the Nasdaq finished 0.21% higher at 6,776.38.
Asia
In Asian markets this morning, the Nikkei 225 was up 1.39% at 22,485.7 and the Hang Seng was 0.6% higher at 28,393.18.
Oil
In early trade today, WTI crude was 0.13% higher at $56.03 per barrel and Brent was up 0.21% at $61.35 per barrel.

Headlines
Bitcoin surges above $14,000 to new high
Bitcoin crossed $14,000 (£10,460; €11,870) on Thursday, surging $2,000 in less than 24 hours. The cryptocurrency began the year below $1,000 but continues its sharp rise despite warnings of a dangerous bubble. Bitcoin hit the latest milestone during early trading in Asia, according to the website Coindesk.com. The new record high comes just days before the launch of bitcoin futures on two exchanges, including the world's largest futures exchange, CME. Spread betting firm CMC Markets said the rise had all the symptoms of a bubble market, warning "there is no way to know when the bubble will burst".
Source: BBC News

Company news
Ariana Resources (LON:AAU, 1.20p) – Speculative Buy
Ariana Resources, the gold-silver exploration and production company operating in Turkey, announced results from its recent exploration programme across the Hot Gold Corridor and within its wholly owned Salinbas/Ardala gold project in north-east Turkey. The Hot Gold Corridor is named after the 3.87Moz Au eq. Hot Maden deposit and Ariana’s Salinbas (and the adjacent Ardala deposits) are located approximately 16km from Hot Maden. Arianna has identified a 550m x 150m area of precious and base-metal soil anomalies at Salinbas North. Soil samples returned 3.83g/t Au plus 108g/t Ag, 2.97g/t Au plus 94g/t Ag and 1.67g/t Au plus 91g/t Ag. Previous drilling at Ardala zone returned 135m grading 2.28g/t Au, 0.29% Cu and 113g/t Mo.

Our view: The above results are very positive and demonstrate the potential for the Hot Gold Corridor to contain a significant multi-phase porphyry system at Ardala as well as an associated gold-silver deposit at Salinbas. Results to date suggest that the Hot Gold Corridor has the potential to be an extensive alteration zone with several styles of mineralisation. We look forward to further exploration updates on Salinbas and Ardala and the potential for the area to host multi-million-ounce gold deposits and significant base metal mineralisation. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Ariana Resources plc

Fox Marble (LON:FOX, 10.62p) – Speculative Buy
The AIM listed company focused on marble quarrying and finishing in Kosovo and the Balkans region, this morning confirmed that it has received a cash loan from one of its Non-Executive Directors. Roy Harrison OBE has subscribed £500,000 in an unsecured loan note issued by the Group, which carried an interest rate of 5% for the outstanding period and may be repaid at any time within a 2-year term. The new monies have been raised specifically for the purchase of equipment, with a view to facilitating increased production in the Group’s marble quarries sufficient to satisfy existing demand. It is expected to be delivered and become operational on site immediately following the soon to commence annual winter shutdown which is expected to end during March 2018. Chris Gilbert, CEO, commented: "This facility, which falls outside our normal operating budget, will allow us to provide the quarries with additional essential equipment and it will give us the ability to increase production substantially, in order to meet the current and growing, global demand for our material."

Our view: Excellent news! In a major report on Fox Marble that Beaufort recently published (titled ‘At Last! Finally Set to Deliver in its Original Business Plan’), the only genuine analytical concern raised was with respect the Group’s relatively weak balance sheet. It concluded that although available cash plus remaining credit facility should be sufficient to fund quarry expansion now required to satisfy current demand, there is clearly limited room for manoeuvre and management would be more comfortable with a greater cash ‘cushion’. Given the Board’s understandable reluctance to place new discounted equity in the market, a low-priced loan facility such as this taken up by one of the Group’s NEDs provides an ideal near-term solution. It is also an obvious reflection of Board-level confidence in the Group’s continuing progress. This was also exactly what Beaufort concluded and, late though it is, Fox Marble’s vision now genuinely looks set to be delivered. It appears set to create significant value in terms of significant cash flow generation while anticipating shareholders being rewarded with early dividend distribution. Indeed, Beaufort forecasts suggest current contract visibility will be sufficient for it to deliver modest positive cash flow for the first time in 2018E, and go onto generate surplus enough to offer a maiden dividend in 2019E. Beaufort rates Fox Marble as ‘Speculative Buy’ with a price target of 24p/share.

Beaufort Securities acts as corporate broker to Fox Marble Holdings PLC

Xtract Resources (LON:XTR, 2.90p) – Speculative Buy
Xtract Resources announced yesterday an update on its Manica alluvial operation in Mozambique. Sino Minerals, the contractors operating on the eastern portion of the licence, have produced 6.287kg (202oz) of tax-paid gold since initial start-up to the end of November. This equates to a gross value of US$230,000 to Xtract and its partner Nexus or US$92,000 attributable to Xtract. Management expects monthly alluvial gold production to increase now that the start-up phase has been completed. Xtract also announced that it has negotiated enhanced the terms regarding alluvial mining on the western portion of the Manica concession with contractors Omnia Mining and Moz Gold Group. The latter has been assigned the M blocks while the former has rights over the O blocks. Given the size of the western half of the alluvial project it was agreement that such division would be beneficial to all interested parties. Omnia has an underutilised plant 3km west of the Manica concession. The amended agreement should have an effect of increasing revenue whilst reducing operating risk.

Our view: Achieving production on the eastern half of the Manica Alluvial production is a significant milestone for the company. Whist Xtract’s portion of the start-up phase is a modest amount, we are encouraged with initial results and expect monthly production to increase in the coming months. We look forward to steady state operation from both the eastern and western portions of the alluvial concession with the amended agreement which should result in increased payments to Xtract. In the meantime, we maintain our Speculative Buy rating on the stock.

Beaufort Securities acts as a corporate broker to Xtract Resources PLC

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Thu, 07 Dec 2017 08:35:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29077/beaufort-securities-breakfast-alert-ariana-resources-fox-marble-and-xtract-resources-29077.html
BlackRock and Vanguard Are Less Than a Decade Away From Managing $20 Trillion http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29076/blackrock-and-vanguard-are-less-than-a-decade-away-from-managing-20-trillion-29076.html BlackRock and Vanguard Are Less Than a Decade Away From Managing $20 Trillion
This article by Rachel Evans, Sabrina Willmer, Nick Baker, and Brandon Kochkodin for Bloomberg may be of interest to subscribers. Here is a section:
It’s closer than you think. BlackRock Inc. and Vanguard Group — already the world’s largest money managers — are less than a decade from managing a total of $20 trillion, according to Bloomberg News calculations. Amassing that sum will likely upend the asset management industry, intensify their ownership of the largest U.S. companies and test the twin pillars of market efficiency and corporate governance.

None other than Vanguard founder Jack Bogle, widely regarded as the father of the index fund, is raising the prospect that too much money is in too few hands, with BlackRock, Vanguard and State Street Corp. together owning significant stakes in the biggest U.S. companies.

"That’s about 20 percent owned by this oligopoly of three," Bogle said at a Nov. 28 appearance at the Council on Foreign Relations in New York. "It is too bad that there aren’t more people in the index-fund business.”



Eoin Treacy's view
ETFs are cost effective and offer access to market performance, with a mild underperformance, for an increasingly wide number of countries, sectors, currencies, commodities, bonds and real estate.

For ETF providers the most expensive fund to launch is the first one. Every one after that is simply an iteration of the first based on a different basket. Therefore, they have an incentive to create as many as possible in the hope that a few will capture the imaginations of investors and be wildly successful at accruing assets.
 

 



Tencent Seen Doubling by Stock-Picker Already Up 6,000%
This article by Charles Stein for Bloomberg may be of interest to subscribers. Here is a section:
Fueled by fast-growing sales, Tencent and Alibaba have almost doubled in share price this year, and both have market caps above $400 billion even after slipping recently. Their parallel climb explains in part why Leverenz’s fund has returned 31 percent in 2017, on track for its best year since 2009.

The stocks come with political risks. The Chinese government in September made creators of online message groups responsible for managing information within their forums, a move that chilled users of WeChat, Tencent’s popular social network.

“If you are an investor in Tencent you are basically betting on management’s ability to adjust to policies,” Duncan Clark, chairman of technology consulting firm BDA China Ltd., told Bloomberg News at the time.



Eoin Treacy's view
Privately held companies will be tolerated and even prosper in China provided they accept the role of ensuring the permanence of Communist Party rule and toe the Party line. Jack Ma saying today that China benefits from the stability of a single party system can be viewed in that vein. “Private” companies are increasingly organs of central propaganda and are expected to assist both in monitoring and influencing the public.



The Future of Nickel: A class act
Thanks to a subscriber for this report from McKinsey which may be of interest to subscribers. Here is a section:
A section from this report is posted in the Subscriber's Area.



Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

The LME signaled a couple of months ago that it is assessing whether to split the nickel contract in two. The decision will hinge on whether they believe battery demand will in fact ramp higher as many of us expect. The demands from the emerging battery sector are much more stringent in terms of delivery specifications than are currently the norm for LME warehouses so there is a compelling argument for the creation of a new contract.



Elon Musk's Boring Company shares potential map of LA tunnel network
This article by Nick Lavars for Newatlas many be of interest to subscribers. Here is a section:
These tunnels would essentially function as fast freeways, where vehicles and passenger pods latch onto electric skates and get shuttled along at up to 150 mph (241 km/h). There would on and off ramps every mile or so, each with a dedicated side tunnel to avoid logjams. These tunnels could also form part of a Hyperloop system over larger distances between cities.

While all of that remains a ways off, the company is making progress on its proof-of-concept tunnel. Photos shared by Musk in October showed a fully concreted tunnel complete with tracks and cables that he said at the time measured 500 ft (152.4 m) and within three of four months would stretch to around 2 mi (3.2 km).



Eoin Treacy's view
I have to admit that my first reaction to the Boring Company’s announcement of tunnels for the LA area was something to akin “Has anyone told Elon Musk that Los Angeles is prone to earthquakes?” After all the idea of tunnels is all well and good until they turn into coffins.

The rejoinder today would be that tunnels are immune to wildfires. Less that 8 miles from where I live the mountain between here and the Valley is on fire, which makes me glad I work from home and on flat ground. A lot of the people who pay city taxes in Los Angeles live in the areas currently burning, suggesting the Boring Company may get a leg up from the fires regardless of the safety concerns inherent in its plan.
 

 



Eoin's personal portfolio update




Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

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Thu, 07 Dec 2017 08:34:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29076/blackrock-and-vanguard-are-less-than-a-decade-away-from-managing-20-trillion-29076.html
GVC doubling down? http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29075/gvc-doubling-down-29075.html FTSE 100 Index called to open +5pts at 7355, but back from overnight highs of 7370, checked by intersecting falling highs resistance since end-November. Bulls need a break back above 7370; Bears require a breach of yesterday late lows of 7336. Watch levels: Bullish 7370, Bearish 7336.

Calls for a tepid start come after a mixed finish on Wall St where Tech names were back in favour following the recent sell-off. This helped foster a more positive performance in Asia overnight (Japan outperforming on weaker Yen), although China remained weak after an IMF report suggesting banks need to raise capital, reviving slowdown fears.

While a stronger USD on tax reforms hopes helps the FTSE via weaker reciprocal GBP, note oil remains under pressure (bearish flag?) following yesterday’s US gasoline inventory inspired sell-off. This  may keep a lid on the FTSE’s Energy heavyweights. Note Copper prices also pressured by a stronger USD, which may hamper FTSE Miners.

In corporate news, Ladbrokes Coral and GVC in detailed discussions, GVC offering 18.5-50% premium for 46.5% share of new co. Legal & General on track for record year for earnings and profits. Coca-Cola HBC appoints Zoran Bogdanovic (currently a regional director) as new CEO.

RELX to buy-back up to £100m in shares Jan to mid-Feb to reduce capital. DS Smith confident about outlook, H1 exceeded medium term targets, raises dividend. HSS Hire offers new 2020 targets; focus on deleverage, repair tool hire business, strengthen commercial position.

US equity markets finished mixed, with the Tech-focused Nasdaq outperforming as Facebook rallied after a broker upgrade, while both the Dow Jones and S&P 500 closed shy of breakeven. The Dow saw large cap Financial and Retail names weigh, while gains for Tech on the S&P were not enough to offset weakness amongst Energy names.

Crude Oil prices are little changed overnight following yesterday’s sharp price fall on the back of US gasoline inventories rising almost four times more than expectations, offsetting a larger than expected draw in headline crude inventories. Brent holds above support at $61.6 after retreating from overnight highs of $62, while West Texas trades at $55.8 from overnight highs of $56.1.

Gold has fallen below $1260 for the first time since August, extending its December downtrend overnight as the US dollar trades a 2-week high.

In focus today will be UK Halifax House Prices (8.30am) expected to show slightly slower growth in November that may impact the FTSE Housebuilders and Retailers given the implications for consumer confidence. Thereafter, the final reading for Eurozone Q3 GDP is seen confirming slower sequential growth (average since Q4), but an acceleration on the annual pace (fastest since Q1’11),

In the run-up to tomorrow’s US Jobs report, there may be some interest in the Challenger Job cuts report for November, although the annual change in growth can be rather volatile. US Jobless Claims are forecast to show initial claims holding around their 8-week average, while continuing claims reverse all of last week’s jump, and more, to return to their 10-week average.

There’s always the chance that UK PM May has to dash to Brussels, and that we hear more on those tricky negotiations with the EU on Brexit. Otherwise, the only speakers are ECB President Mario Draghi (4pm), chairing a BIS press conference, and the Fed’s Dudley (1.30pm), making introductory remarks at a "Higher Education Financing and Costs and Returns of Higher Education" conference.

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Thu, 07 Dec 2017 08:20:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29075/gvc-doubling-down-29075.html
Breakfast News - Eco Animal Health, Plastics Capital, Gfinity and others http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29074/breakfast-news-eco-animal-health-plastics-capital-gfinity-and-others-29074.html What’s cooking in the IPO kitchen?

AIM

Panthera Resources— The Company was established to act as a holding company for Indo Gold Limited, an unlisted Australian registered company. The Company aims to explore and develop gold assets in India and West Africa. Offer TBC, expected 20 Dec 2017

Sumo Group—one of the UK's largest independent developers of AAA-rated video games providing both turnkey and co-development solutions, including initial concept and pre-production . Offer TBC. Due late Dec

Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017

Fusion Antibodies—Belfast based contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications.  Offer TBA. Due Mid Dec.

Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m.  Due 19 Dec.

Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine.

Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with market cap of £17.4m. Also acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago  with extensive drilling capabilities.

Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity.  Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec.

Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT

Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices.  Raising £7.5m to £10m. Offer TBA. Due early Dec

Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native in-video advertising. 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 6 Dec.

OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.

Main Market Specialist Fund Segment

Sure Ventures –Raising  up to £50m at £1. Focus on FinTech, IoT and Augmented/Virtual Reality. Due 8 Dec.

Main Market Standard Listing

Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA.

Main Market Premium Listing

GEMS Education—report by Reuters that the private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

Greensphere Capital -$500m raise.  Aims to provide Shareholders with an attractive yield from a portfolio of sustainable infrastructure assets diversified by geographies and sectors and to realise long-term growth  capital value.  Due 20 Dec

Vivo Energy—The Africa-focused company, which operates around 1,800 Shell forecourts across 16 countries  reported by City A.M. to be preparing for a London float next year

Aberdeen Standard European Logistics Income—Investment Trust targeting £250m raise. Investing in a high quality portfolio of European logistics assets. Due 15 Dec.

Tri-Pillar Infrastructure— Investing a broad range of infrastructure assets located predominantly in continental Europe and North America. Seeking £200m raise at 100p.  Due 8 December.

Aviva Investors Secure Income REIT  - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due 8 Dec.

   
Breakfast buffet

Eco Animal Health (LON:EAH) 596p £390m

HY Sep 17 results from the specialist in the development and marketing of high quality medicines for the control of disease in livestock and companion animals. 35% increase in adjusted EBITDA to £8.5m. 10% increase in pre-tax profit to £5.9m. 8% increase in sales to £29.2m. 11% increase in gross profit to £14.2m on improved margin. 13% increase in earnings per share to 6.39p. 28% increase interim dividend to 3.2p. 36% increase in cash generation from operations to £7.2m  leaving net cash of over £20 million at the period end. H2has started well with a strong and growing order book. ECO has a sound balance sheet with good and reliable cash generation. The Company continues to invest in research and product development programmes to obtain further marketing authorisations and efficiencies in production. FYMar18E rev £70.4m and £18.4m EBITDA.

Redhall Group (LON:RHL) 7.25p £24.1m

FYSep17 results from the high integrity manufacturing and services group.

•     Adjusted operating profit £1.4m (2016: £0.9m); £3.6m before deduction of central costs of £2.2m (2016: £3.3m). Overall net margin before central costs of 9.3% 

•  Order book £32m (£27m) with strong tender pipeline

•     Group turnover £38.9m (2016: £43.8m), showing underlying increase after adjusting for cessation of marine contract. “The strengthening of our manufacturing expertise, the further improvement in the quality of order book, an increasing pipeline of high quality opportunities and increasing adjusted operating profit margin give the Board reason for cautious optimism for 2018 and beyond.” FYSep18E rev £52.3m and £3.4m PBT. 

1PM (LON:OPM) 49p £39.4m

HYNov17 update from the independent specialist provider of finance facilities to the SME sector

Revenue of approximately £13.8m, an increase of 73% compared with £8.0m in the comparable prior year period

Profit before tax and exceptional items of approximately £3.5m, an increase of 75% when compared with £2m in the comparable prior year period

Present net write-offs in the period  continuing to be less than 1% of the gross portfolio.

New funding facilities in aggregate total £53.3m, an increase of £12.8m on previous facilities.

FYMay18E rev £29.5m and £7.8m PBT.

Gfinity (LON:GFIN) 25.6p £55.3m

The international esports entertainment group, announces that the Gfinity Elite Series will become the first esports competition to include EA SPORTS™ FIFA 18 in its schedule when season three of one of the world's premier esports competitions begins in March 2018.

FIFA 18 is one of the world's most played and watched competitive gaming titles and the FIFA series has sold over 150 million copies globally with more than 200 million matches taking place every week, giving virtual footballers the chance to express themselves at the highest level of competition.  We could see no forecasts.

Plastics Capital (LON:PLA) 115.6p £49.1m

In-line HYSep17 results from the niche plastics products manufacturer. Rev +31.3% £36.5m. Headline EBITDA down 5.8% to £2.6m. Headline PBT £1.2m down 27%. Interim dividend dropped (1.46p). “We have increased investment in business development, new products, production capacity and employee capabilities.  Order books are healthy and we anticipate a significant uplift in profitability during the second half of the financial year which should benefit from the seasonal demand upswing and new business coming on stream.” “Board expects profits before taxation, to be marginally below consensus market expectations, but well ahead of FY 16-17, for the full financial year.” FYMar18E rev £77.5m and £4.3m PBT.

Oxford Metrics (LON:OMG) 61.3p £76.6m

FYSep17 results form the   international software company servicing government, life sciences, entertainment and engineering markets. Group Revenue from continuing operations increased 10.7% to £29.2m (FY16: £26.3m), up 7.6% at constant currency.  Group Adjusted PBT of £3.9m (FY16: £5.1m), ahead of market expectations following planned investment in Yotta.

“We enter a new financial year in a solid position with good visibility of the sales pipelines for the year ahead and an improving quality to our revenues. The teams are energised with innovative new products, new resources and new markets to tap. Given that, we start with a good degree of confidence in our prospects for the year ahead.” FYSep18E rev £32.4m and EBITDA £6.9m.

United Oil & Gas (LON:UOG) 5.13p £10.3m

The oil and gas exploration and development company, announced positive log results from the drilling of the Podere Maiar 1 ("PM1") well on the Selva Gas Field in the Podere Gallina licence, onshore Italy (20%). PM1 was successfully drilled to a total depth of 1330m TVD (1307m TVDSS) ahead of schedule and on budget. Downhole log results from Schlumberger confirm a gross gas pay of 53m. The top of the reservoir was encountered at 1245m TVD (1223m TVDSS) some 12m above the level of any previous production wells, including the nearby Selva 6 well. The two main sand levels show high resistivity in the logs, indicating a thick gas-bearing reservoir. Plans afoot  to proceed to case, perforate and complete the well and install downhole production equipment. Flow-testing on a rigless basis planned for early January.

SysGroup (LON:SYS) 36.2p £8.4m

HYSep17 results from the Managed IT Services and Cloud Hosting provider. Revenue from continuing operations up 46.6% to £3.93m .  Adjusted loss before tax of £0.04m (H1 2017: profit of £0.28m). Post period end Acquisition of Rockford IT for £3.9m, demonstrating further execution of buy and build strategy. “The Group's alignment to Managed IT Services and its early education efforts are proving fruitful. The result of this shift in the Group's revenue base and the associated impact on timing of recognising revenue means that the Board expects revenue and profitability to be significantly weighted to the second half of the year.” Confident in achieving the revised market expectations for the full year.  FYMar18E rev £10.3m and PBT £0.19m.

Mercia Technologies (LON:MERC) 35p £104m

HYSep17 results from the national investment group focused on scaling innovative technology businesses with high growth potential from the UK regions.   £9.7m net invested in nine portfolio companies during the period (H1 2016: £5.7m. Funds under management in the period were £336.5m from £220m. Investment portfolio fair value up by £12.7m or 24.4% to £64.7m, comprising £9.7m of net new capital invested and £3m of net upward fair value movements. Post-tax profit of £1.4m (H1 2016: £1.1m). Positive on changes to EIS scheme. Bur notes slowing global economy and uncertainty re Brexit.  With a highly liquid balance sheet and circa five years of managed fund investment capital,   the Group remains in  a strong financial position.

Maintel Holdings (LON:MAI) 715p £113m

FYDec17 trading update form the systems integrator and managed services provide. “The Group's ICON cloud services have continued to grow strongly in the second half of 2017, boosted by ongoing investment in the platform. The success in our ICON cloud business is very encouraging, as the Group continues to transform from a telecoms business to a fully managed service provider in the enterprise space. The Group had expected to recover the reduction in gross margin in the first half of this financial year, but it is now evident that this will not happen” Due to 1) legacy contracts slowing quicker than expected, 2) delay to Avaya bankruptcy process, 3) lower than expected GM from’ Intrinsic’ integration. Revised EBITDA expectations of £12.5m to £13m (consensus £16.2m). Expects recovery to accelerate into H1 2018.

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Wed, 06 Dec 2017 11:37:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29074/breakfast-news-eco-animal-health-plastics-capital-gfinity-and-others-29074.html
Today's Oil and Gas Update - Curzon Energy and Green Dragon Gas http://www.proactiveinvestors.co.uk/columns/sp-angel/29073/today-s-oil-and-gas-update-curzon-energy-and-green-dragon-gas-29073.html Curzon Energy* (LON:CZN– 8p) – $32.5mm (37p) – Getting on With It: Today’s news underlines the appetite with which the Company is tackling its appraisal programme, with the rig secured and turning so quickly after securing funds. While some commentators will point towards the fact that the wells being tackled are pre-existing wells, we believe that by focusing on the wells that will generate cash flow first, the Company is ensuring that shareholders achieve maximum value as quickly as possible. While the wells are pre-existing and will flow gas immediately, it must be remembered that due to the flow characteristics of CBM wells, the testing programme, albeit simpler, has a longer duration due to the need to dewater before the full productivity of the well is understood. Still, the gas produced will generate revenue which if sufficient, wil l be reinvested into new wells at ready identified drill locations, further increasing cash generation. If successful, the programme will see the ~270bcf of Contingent Resources quickly reclassified into Reserves, which will carry a higher than usual NPV (for the United States) due to the differentiated gas pricing in Oregon.


Green Dragon Gas (LON:GBG– 62p) – Listing Plans Ignore Underlying Reason for Weakness: Today’s news that the Company will be listing its producing businesses on the Hong Kong Exchange to raise enough funds to pay down the debt on its balance sheet, citing the fact that the London market doesn’t value the assets sufficiently, ignores the one single largest flaw in the plan. London doesn’t value the assets because Green Dragon Gas is laden with debt that has had no way of paying it off for a long time, that was run up by a management team that overlooked the fact that the majority of its assets have been developed by a third party without its knowledge. That’s why its poorly rated. So, what is going to remain in the London listing? Not much of anything. This management team have failed to deliver value on any basis for the shareholders, and are now seeking to take the value enhancing business away from those shareholders that have supported the Company thus far. Instead of fixing the problem and addressing the issues that the market is telling them are there, management are taking their brand of failure to a new location. Given this, it is unlikely they have learned their lessons and will fail again. We believe that this is a wasteful exercise based on the management team’s vanity, but given the fact that the majority of shares are owned by a concert party to management, this resolution will likely be passed. Best thing to do is to stay with the shares, get the new shares on dividend and then work with the new investors that come in through the HK listing to change the management team for one that can deliver. After the split, what’s left in London will not be worth anything.

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Wed, 06 Dec 2017 09:06:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29073/today-s-oil-and-gas-update-curzon-energy-and-green-dragon-gas-29073.html
Hamm-ering out a deal http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29072/hamm-ering-out-a-deal-29072.html FTSE 100 Index called to open -30pts at 7295, albeit off its 7278 overnight lows and still hindered by accelerated falling highs resistance at 7300. Bulls need a decisive break back above 7300 to fuel recovery hopes. Bears want a breach of 7278 to open the door for completion of a 1-month bearish flag at 7200. Watch levels: Bullish 7310, Bearish 7275.


Calls for a negative start come after a negative close on Wall St (S&P’s first 3-day losing streak since Aug) was followed by an even weaker session in Asia (8 day fall; longest since 2015), the tech sector still in flux regarding US tax reform after such a long rally. Commodities, however, may be the architects of UK blue-chip sentiment after moves in Copper and Oil.


Note Copper off its latest China-inspired sell-off lows (rising stockpiles, uncertain demand), but not without dragging Miners lower in Australia overnight. Whist the red metal may have finished one bearish flag (from 27 Nov) the risk is that it is in the process of forming another.


Oil prices are also weak following last night's US API inventory data (and ahead of this afternoon’s EIA), which showed a much bigger than expected build in Gasoline stocks, which dented sentiment overnight and is likely to have a bearing on the FTSE via its 14.5% direct exposure to Energy, although Crude prices perhaps didn’t react quite as strongly as one might expect.


In FTSE corporate news, Hammerson agrees to £3.4bn offer for Intu Properties (27.5% premium). Saga sees underlying profit growth down on prior year. Shaftesbury raising £265m via placing of 10% in new shares at 952p. GlaxoSmithKline P3 study shows efficacy of Shingrix shingles treatment. EasyJet November passengers +8.1% YoY to 5.4m, load factor +2.6pts to 92.3%. Smith & Nephew acquires Rotation Medical for $125m


US equity markets fell (S&P first 3-day losing  streak since August) despite a rebound of sorts for Tech, however, Housebuilders reacted to a negative update from Toll Brothers. Upgraded buyback programmes from Mastercard and Bank of America, were welcomed, but not enough to reverse market sentiment as we await confirmation on tax reform.


Crude Oil prices are back from yesterday’s highs but held up overnight, Brent Crude at $63.1 and its West Texas cousin at $57.3. With the OPEC/non-OPEC agreement out of the way, the focus is back on weekly US inventory updates and moves in the USD (off its lows, bullish triple bottom reversal overnight). Gold has bounced from October lows of $1260 thanks to the weaker USD and geopolitical risk (US, Middle East, Brexit).


In focus today will be Theresa May at Prime Minister’s Questions - PMQs (12pm) in light of Monday’s failed Brexit negotiations (and her absence last week) and the likelihood she needs to rush back to Brussels to salvage a deal with the EU before Friday’s, “deadline of deadlines” ahead of a key 14-15 December summit. Expect strong questioning from both sides of the house. Watch GBP.


Data-wise, whilst no consensus is provided for Eurozone Retail PMI (9:10am) the prints may offer a gauge of European consumer sentiment. US ADP Employment Change (1:15pm) likely cooled from October’s post-storm rebound, and is considered a pre-cursor for Friday’s US Non-Farm Payrolls. US Non-Farm Productivity and Unit Labour Costs (1:30pm) may show a marked acceleration and slight cooling, respectively to keep data watchers on their toes. Watch USD.


Finally, weekly US Crude Oil Inventories (3:30pm) will provide the regular flash in the pan for commodities traders. Expectations for a headline Crude drawdown could aid bullish sentiment after selling in reaction to last week’s OPEC/non-OPEC production cut extension, however an expected Gasoline build may offset some positivity, especially after last night’s API data delivered just that.

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Wed, 06 Dec 2017 09:04:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29072/hamm-ering-out-a-deal-29072.html
Beaufort Securities Breakfast Alert : Eurasia Mining, PHSC, Prospex Oil & Gas http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29071/beaufort-securities-breakfast-alert-eurasia-mining-phsc-prospex-oil-gas-29071.html Markets
Europe
The FTSE-100 finished yesterday's session 0.16% lower at 7,327.50, whilst the FTSE AIM All-Share index was down 0.36% at 1,020.75. In continental Europe, the CAC-40 finished 0.26% lower at 5,375.53 whilst the DAX was down 0.08% at 13,048.54.
Wall Street
Last night in New York, the Dow Jones closed 0.45% lower at 24,180.64, the S&P 500 fell 0.37% to end at 2,629.57 and the Nasdaq finished 0.19% lower at 6,762.21.
Asia
In Asian markets this morning, the Nikkei 225 was down 1.97% at 22,177.04 and the Hang Seng was 1.58% lower at 28,387.07.
Oil
In early trade today, WTI crude was 0.36% lower at $57.41 per barrel and Brent was down 0.3% at $62.67 per barrel.

Headlines


First tax havens blacklist published by EU
The European Union has published its first blacklist of tax havens, naming 17 territories including Saint Lucia, Barbados and South Korea. A "watchlist" of 47 countries promising to change their tax rules to meet EU standards has also been issued. The "grey list" includes several with UK links, including Hong Kong, Jersey, Bermuda and the Cayman Islands, as well as Switzerland and Turkey. Both lists have been criticised as omitting the most notorious tax havens. The lists follow the leaking of the Panama Papers and the Paradise Papers, revealing how companies and individuals hid their wealth from tax authorities around the world in offshore accounts. EU tax commissioner Pierre Moscovici said the blacklist represented "substantial progress", adding: "Its very existence is an important step forward. But because it is the first EU list, it remains an insufficient response to the scale of tax evasion worldwide."
Source: BBC News

Company news
Eurasia Mining (LON:EUA, 0.30p) – Speculative Buy
Eurasia published a detailed announcement yesterday. The headline news is the submission of a mining license application over Monchetundra, its 2Moz PGM, gold and base metal project on the Kola Peninsula (North West Russia). The announcement also describes the situation at its 75% owned alluvial platinum mine, West Kytlim, where the contractor hasn't delivered the tonnage required. Looking forward into 2018, Eurasia are considering using additional contractor(s) to reduce the "single operator risk". Eurasia has also been optimising the recovery plant which in recent weeks has been performing much better. The announcement also reports it has applied for two new licenses adjacent to West Kytlim.

Our view: Good news on the Mochetundra licence application. Mixed fortunes at West Kytlim, although the situation there appears to be improving. Significantly, since the West Kytlim contractor failed to deliver to the pre-agreed mine schedule, it has lost its exclusive right to mine the property. This allows Eurasia to invite bids from other contractors and should result in a better West Kytlim performance in 2018.

Beaufort Securities acts as corporate broker to Eurasia Mining plc

PHSC (LON:PHSC, 10.00p) – Speculative Buy
The diversified services and consultancy business yesterday released unaudited Interim Results for the six months ended 30 September 2017. The Group reported a return to profitability, with EBITDA of £197,000 compared with a loss of £93,000 for the corresponding period last year. Earnings per share of 1.08p against a loss of 0.85p, while period-end cash amounted to £129k compared with £301k. While revenues rose only modestly, 3.7% to £3.72m, the operational improvement was achieved through a combination of factors, including an improved performance from the Group's security technology operations, strong revenues from quality systems management and training, steady income from general health and safety services, and reduced losses from asbestos consultancy. In particular, QCS International Limited enjoyed a good first half, with stronger sales benefitting from increased demand for management systems training. Total income from the security related businesses, B to B Links Limited and SG Systems Limited, was £2.26m, generating EBITDA of £149,700 before management charges. B to B finished the first half strongly, despite continuing to suffer the effects of the weak exchange rate, while last year's comparatives were £1.98m and £19,200 respectively. The Board has declared an interim dividend of 0.5p per ordinary share, to be paid on 28 February 2018 to those on the register of members on 5 January 2018.

Our view: PHSC continues its on-going rationalisation and cost reduction programme. Progress here is being made with higher value-added security-related technology services generating 61% of Group revenues in the first half, compared with 55% in 1H'2016/17. The second half of 2017/18E, however, is traditionally less predictable for the Group, with retail clients tending to defer projects that may prove disruptive to their sales over the Christmas and subsequent sales periods. Q3'2017 is therefore seen as being quieter, with a focus on completion of those installations currently underway before the go-ahead is given for new installations and further upgrade work. The second half will also bear some additional costs, including redundancy and associated closure fees at loss-making Adamson's Laboratory Services. By contrast, however, the remaining health and safety businesses are expected to remain profitable. There is also a high expectation that QCS will continue to exceed targets for sales and profits in the delivery of quality management consultancy and training services. Although progress in repositioning the Group is evident, right now it would only be realistic to anticipate payment of a final dividend on the basis the plc manages to successfully dispose to the freehold-owned Essex premises occupied by ALS prior to next year's AGM. PHSC's equity nevertheless continue to trade at a deep discount to its pro-forma net asset value (unaudited) of 38.7p per share, on which basis the Beaufort retains its Speculative Buy recommendation with a price target of 16p.

Beaufort Securities acts as corporate broker to PHSC plc

Prospex Oil & Gas (LON:PXOG, 0.73p) – Speculative Buy
Prospex has announced positive news from its well (17% interest) in the Po Valley, Italy. Downhole log results show a gross gas pay of 53m, starting 12m above the level of previous production wells. Gas is demonstrated by high resistivity and the operator and JV partners have agreed to case, perforate and complete the well.

Our view: This is the positive news we have been waiting for. i.e. evidence of gas where expected and a decision to complete the well for testing and production. Well completion is targeted to finished mid December with flow testing planned for early January. We reiterate our Speculative Buy recommendation.

Beaufort Securities acts as corporate broker to Prospex Oil & Gas plc

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Wed, 06 Dec 2017 08:54:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29071/beaufort-securities-breakfast-alert-eurasia-mining-phsc-prospex-oil-gas-29071.html
Taxes Again ..... http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29070/taxes-again--29070.html Eoin Treacy's view

A link to today's video is posted in the SUBScriber's Area.

Some of the topics discussed include: precious metals pull back with gold testing the lower side of a two-month range. Wall Street pauses, Pound closes off its low on potential for the Brexit agreement to be concluded, commodities weak but oil continues to hold the $60 area.

"Taxes Again"

Thanks to a subscriber for this report by Andrew Adams for Raymond James which may be of interest to subscribers. Here is a section:
A section from the report is posted in the Subscriber's Area.

Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

Fiscal stimulus at a time of almost full employment and close to record low corporate spreads is a recipe for a boom. That is what the vast majority of people are focused on right now especially with the fact that corporations are likely to be the largest beneficiaries. For consumers the final text of the bill that is approved by the House and Senate will be a mix of the data in the below table but the net effect is a tax cut for many people which is likely to boost sentiment.

Copper Falls to 2-Month Low on Worries of Slowing China Demand

This article by Yuliya Fedorinova for Bloomberg may be of interest to subscribers. Here it is in full:
“Industrial metals prices will consolidate due to a marked slowdown in China’s metals consumption growth,” BMI Research wrote in an emailed note.

China’s frenzied construction of roads, bridges and subways is set for a major slowdown, adding a headwind to economic growth in 2018. Fixed-asset investment in infrastructure will grow 12 percent next year, according to the median estimate in a Bloomberg survey, down from almost 20 percent in the first ten months this year.

All 18 economists in the survey anticipated a moderation, adding to reports by Morgan Stanley, Goldman Sachs Group Inc. and UBS Group AG predicting a similar trend.

Adding to the selloff is speculation that metals prices have overshot fundamentals in the recent run up. Nickel has retreated 13 percent since early November, giving up some gains from earlier in the year.

"The recent rally in nickel was mostly due to expectations of increased use of the metal in batteries, which will definitely realize some day, but right now stainless steel, not EVs, is still major consumer of nickel and its market driver," Boris Krasnojenov, an analyst at Alfa Bank in Moscow, said by phone.


Eoin Treacy's view
China has infrastructure on par with many developed countries and has more spare steel capacity, for example, than the entire industries of Japan, South Korea and Taiwan combined. At some point there will be a rationalization of that industry. However the big question is what will replace it?

Bitcoin: UK and EU plan crackdown amid crime and tax evasion fears
The UK and other EU governments are planning a crackdown on bitcoin amid growing concerns that the digital currency is being used for money laundering and tax evasion.

The Treasury plans to regulate bitcoin and other cryptocurrencies to bring them in line with anti-money laundering and counter-terrorism financial legislation. Traders will be forced to disclose their identities, ending the anonymity that has made the currency attractive for drug dealing and other illegal activities.
Under the EU-wide plan, online platforms where bitcoins are traded will be required to carry out due diligence on customers and report suspicious transactions. The UK government is negotiating amendments to the anti-money-laundering directive to ensure firms’ activities are overseen by national authorities.

The Treasury said: “We are working to address concerns about the use of cryptocurrencies by negotiating to bring virtual currency exchange platforms and some wallet providers within anti-money laundering and counter-terrorist financing regulation.”


Eoin Treacy's view
This article from TheStreet concerning the USA’s IRS tax treatment of bitcoin profits may also be of interest.

Eoin's personal portfolio update


Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

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Wed, 06 Dec 2017 08:53:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29070/taxes-again--29070.html
Oil price, Savannah Petroleum, Upland Resources, Link And finally... http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29069/oil-price-savannah-petroleum-upland-resources-link-and-finally-29069.html WTI $57.47 -89c, Brent $62.45 -$1.28, Diff -$4.98 -39c, NG $2.98 -8c


Oil price
Yesterday was a little bit like the day after the Lord Mayor’s Show, after the Opec meeting and the rollover of the agreement there was a bit of profit taking and for once Brent was hit harder than WTI. That has put the differential back below $5 but that may be because there were more net long positions in Brent.
The only comment that might have affected the market came Falih himself as in a speech yesterday he said that ‘supply curbs would continue through 2018 even though countries may start discussing when to raise output in the June meeting’. I think he is saying that it will take more than a half a year to reduce stock levels back to five year averages especially as the demand next year as being forecast to be 32.65m b/d in the seasonally weak 1H but up to 34.24m b/d in H2.


Savannah Petroleum - LON:SAVP
SAVP announced an update on the Seven Energy proposed acquisition and its financing. They are intending to raise up to $250m to fund the cash consideration of the transaction and expansion of the drilling campaign in Niger. The placing, to be done by way of a placing with institutional is imminent and will be done in two tranches, one using existing AGM permission and the second after a General Meeting has been held. Readmission is expected this month and the placing is expected to be completed in January and for the transaction as a whole completion should be 1H 2018.
As a reminder SAVP is acquiring 40% of the Uquo and 51% of the Stubbs Creek onshore producing oil and gas fields plus a 20% interest in the Accugas midstream business. (Interestingly the company has agreed and has a term sheet for, a private equity fund investment for the remaining 80% of Accugas, led by AIIM and with the IDB Fund 11 who will pay $60m for that stake and carry SAVP for its 20% interest which will also carry options to acquire more of the midstream business.)  This is a most interesting deal, having the stake in the company gives SAVP ‘visibility of key end customers for its gas’ and these infrastructure funds will become valuable partners. So, aggregate consideration and acquisition enterprise value will be of the order of $270m.  ‘This represents an acquisition cost of US$2.9/2P boe and an overall acquisition EV/capital invested in the assets to be acquired to date of c.35 %’ which seems very attractive to me.


Lloyds Register has certified 2P reserves and 2C resources to be 92 mmboe and 44 mmboe respectively for the two fields at which 2018 production will be in excess of 20/- boe/d. Net free cash flow attributable to SAVP in the years 2018-22 of $88m p.a. plus an NPV10 of $548m. Other notable features from the announcement include a stepping up of the Niger drilling programme from three to five wells, starting in 1Q 2018 targeting >250m barrels of prospective oil resources. The board is being beefed up as well with a new CFO and three high profile industry players joining the non-exec ranks, once this transaction closes Savannah will be a very grown up company indeed and it should be noted that CEO Andrew Knott has committed to investing $500/- in it personally.
Savannah is acquiring a substantial portfolio of producing assets at what seems a very attractive price, with the cash flow that they expect from these upstream and midstream assets they also intend to pay a dividend from 2018 onwards which makes the transaction even more interesting and will undoubtedly put the company higher up the list of international players in the industry.


Upland Resources - LON:UPL
I wanted to catch up with Steve Staley, CEO of Upland Resources following their recent announcement of a farm-in with Corallian Energy for a 40% WI in UK block 11/24b which contains the exciting Wick Prospect and managed to get some time with him this morning. Apart from some UK onshore with Ineos I hadnt really done much work on Upland but SS has a fantastic record in the industry so should be watched very carefully.


Upland have done a lot of prep work on this licence and plan to drill the prospect in late 2018 but with an estimated in-place P50 resources of around 250m bbls it may well be worth the wait. The key risk that has been identified I understand is the fault closure but apparently if the faults seal then this is a very big structure indeed, in fact his words were ‘it sticks out like a sore thumb’.
Fans of Reabold Resources will have more than a passing interest in this as they now have an interest in Wick following the Corallian investment, although guarded about anything until the deals are funded and signed I suspect they are quietly very excited about 2018…

And finally…

The final round of Champions League fixtures and CSKA Moscow come to the Theatre of  Dreams tonight where the Red Devils need a point to top the group and be certain of qualifying… Celtic host Anderlecht and Chelski entertain Athletico Madrid.


The second test in The Ashes was looking all over but England remain in but with a very slim chance of victory tomorrow but don’t stand on one leg waiting…

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Tue, 05 Dec 2017 14:06:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29069/oil-price-savannah-petroleum-upland-resources-link-and-finally-29069.html
Breakfast News - Mporium, Horizon Discovery, Cerillion and others http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29068/breakfast-news-mporium-horizon-discovery-cerillion-and-others-29068.html What’s cooking in the IPO kitchen?

AIM

Pelatro—provider of proprietary software solutions to enterprise-level customers for various aspects of precision marketing for use in B2C applications. Offer TBC, expected 19 December 2017

Fusion Antibodies—Belfast based contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications.  Offer TBA. Due Mid Dec.

Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m.  Due 19 Dec.

Bushveld Minerals  LON:BMN —RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine.

Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with market cap of £17.4m. Also acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago  with extensive drilling capabilities.

Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity.  Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec.

Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT

Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices.  Raising £7.5m to £10m. Offer TBA. Due early Dec

Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native in-video advertising . 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 6 Dec.

OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.

Main Market Specialist Fund Segment

Sure Ventures –Raising  up to £50m at £1. Focus on FinTech, IoT and Augmented/Virtual Reality. Due 8 Dec.

Main Market Standard Listing

Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA.

Main Market Premium Listing

GEMS Education—report by Reuters that th private schools group is seeking a $4.5bn to $5bn London float in 2018. FYAug17 rev $926.2m and adjusted EBITDA $261.6m.

Greensphere Capital -$500m raise.  Aims to provide Shareholders with an attractive yield from a portfolio of sustainable infrastructure assets diversified by geographies and sectors and to realise long-term growth  capital value.  Due 20 Dec

Vivo Energy—The Africa-focused company, which operates around 1,800 Shell forecourts across 16 countries  reported by City A.M. to be preparing for a London float next year

Aberdeen Standard European Logistics Income—Investment Trust targeting £250m raise. Investing in a high quality portfolio of European logistics assets. Due 15 Dec.

Tri-Pillar Infrastructure— Investing a broad range of infrastructure assets located predominantly in continental Europe and North America. Seeking £200m raise at 100p.  Due 8 December.

Sabre Insurance Group—Private motor insurance underwriter, founded in 1982. Raising C.£206m to purchase outstanding preference shares.  Generated gross written premiums  in 2016. Due December. 220p to 240p. Mkt cap £550m to £600m.

Aviva Investors Secure Income REIT  - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due 8 Dec.

 
  
 
  
 
 
Breakfast buffet

Dewhurst (LON:DWHT) 692.5p £22.92m

Record results for the supplier of products for the lift, rail and keypad industries  for the year to 30 September 2017. Group sales for the year increased 12.2% to £52.9m (2016: £47.2m) assisted by positive currency movements during the period. Operating profit before amortisation of acquired intangibles was £6.2m (2016: £5.5m) and profit before tax was £6.0m (2016: £5.1m) up 17.3%. “The weaker pound is benefitting our reported figures. Against this, UK demand is more fragile at the moment and projects are subject to delay and deferral.  Both these effects are at least partly caused by the uncertainty regarding the path leading to and beyond Brexit.  So any progress, or lack of it, in the Brexit negotiations could materially affect our future results.” We could see no forecasts.

Phoenix Global Mining  (LON:PGM) 4.25p £9.76m

The “US-focused copper and cobalt exploration and development company, is pleased to announce that it has expanded the land position of the Empire Copper Mine in Idaho, USA (the 'Empire Mine') with the addition of 33 unpatented mining claims in the Horseshoe Block immediately north of the existing property.“

The Empire Mine land position increases by 70% from 819 acres to a total land package of 1,383 contiguous acres. Recorded copper, lead, zinc, silver and gold production from the Horseshoe Block as recently as 1979 with reported grades of 3.8% copper and 12% zinc. The new claims extend the exploration area to the north of the existing AP open pit resources by approximately 1.2 kilometres

PCI-PAL (LON:PCIP) 51.5p £16.34m

The customer engagement specialist focused on secure payment solutions, announces that it has won a further major reseller contract and two new UK local Government contracts in November 2017, through its partnership with global cloud contact centre telephony provider, 8x8 Inc. The current financial year has started well with recurring revenues showing a 50% growth year-on-year, with 100% client retention. Overall revenues are also ahead for the year-to-date, including less non-recurring, one-off revenue, as the revenue model transitions to a complete software as a service (SaaS) license fee focus. Set up fees and professional service charges will increasingly diminish in materiality as the business grows. We could see no forecasts.

Amino Technologies (LON:AMO) 189p £137.25m

“The Cambridge-based provider of digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution, today provides the following trading update for the year ended 30 November 2017. The Group expects to report a full year performance that demonstrates continued customer traction for its IP / cloud video software solutions and devices, despite industry-wide memory cost headwinds. Gross profit and adjusted profit before tax are expected to be in line with market expectations, whilst revenue is expected to be similar to the previous financial year due to product mix. The Company's cash position at 30 November 2017 was £13.0m.” FYNov17E rev £80.53m and £10.97m PBT. C. 3.5% yield

Mporium Group (LON:MPM) 7.25p £38.76m

“The technology firm delivering event-driven marketing, is pleased to announce a significant commercial agreement for its technology-led digital agency, Fast Web Media (FWM). The seven-figure contract with a fully-owned subsidiary of a FTSE 100 company, represents the largest contract ever awarded to FWM in its 20-year history. The agreement involves the provision of technology and agency services over a 12 month period, across four key international markets. FWM is renowned for creating bespoke digital strategies that deliver measurable commercial improvements.”  At the core of FWM’s offer  is Mporium IMPACT which identifies and monetises micro-moments, resulting in improved performance for digital advertising campaigns, from brand advertising to direct response.  We could see no forecasts.

Satellite Solutions (LON:SAT) 7.16p £48.88m

The specialist in delivery of alternative super-fast broadband services, has signed a sales and marketing agreement  with the European broadband joint venture company established between Viasat, Inc. and Eutelsat Communications. SSW will invest to provide additional resources in each country in anticipation of a material increase in customer numbers and sales. SSW therefore envisages an investment during the first year, as the scheme gains traction and scales up, of approximately £1m of total additional overhead, which will be partially offset by income generated from new customers. SSW expects this project will enable it to breakeven within 18 months of launch and to be earnings accretive thereafter. FYNov17E rev £41.5m and £0.2m PBT.

Cerillion (LON:CER) 154.2p £45.5m

“The billing, charging and customer relationship management software solutions provider, is pleased to announce that it has signed a significant new contract with a European telecommunications provider, worth an initial £5.0m and a total of £8.4m over five years.   

The contract covers the supply and installation of Cerillion's Enterprise BSS/ OSS suite, as well as managed service operations and ongoing support and maintenance of the solution. The system is a comprehensive, functionally rich, and fully integrated billing, charging and customer management solution, suitable for fixed, mobile, broadband and TV services. Secured after a rigorous tender process, begun in the summer, the contract starts immediately, with implementation expected to complete in early 2019.” FYSep18E rev £17.4m and £3.2m PBT.

Ace Liberty & Stone*­(NEX:ALSP) 104.5p £41.9m

“The active property investment company, capitalising on commercial property investment opportunities across the UK, are delighted to announce the following property transaction.

The Company has completed the purchase of New Majestic Bingo Hall, Longlands Road, Middlesbrough at a price of £4.15m. The entire property is let to Gala Leisure Limited at an annual rent of £313,000.

The Company has issued 10,800 shares at £1 in settlement of an invoice from a supplier.”

DXS International (NEX:DXSP) 7.5p £2.5m

AGM Statement from the developer and supplier of clinical decision support solutions to the NHS. “Although budget cuts by the NHS affected our organic development during the 2016-2017 year the company still achieved modest growth. I am however pleased to report that some NHS restructuring is happening which we believe will have a positive effect on our future revenues.

Since the financial year end we have continued to invest in R&D and have now completed phase one of a new range of products and solutions. We are also extremely excited about a tender the company has won which is ideal for piloting these new products and solutions and kicks off in January  2018.”

Horizon Discovery Group (LON:HZD) 260p £387.2m

The specialist in gene editing and gene modulation technologies, and ERS Genomics Ltd., today announce the extension of their pre-existing non-exclusive, worldwide license agreement to significantly expand Horizon's license coverage for the use of the CRISPR gene editing technology. This will enable Horizon to use CRISPR in multiple new areas across its products and services, providing access to additional revenue streams in new and existing markets, and further reinforcing Horizon's leadership position in gene editing and cell biology.   “Through this expanded license, we are able to provide unencumbered access to the benefits of this cutting-edge technology for an increased range of high value products and services." FYDec17E rev £36.9m & £6.5m loss.

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Tue, 05 Dec 2017 10:21:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-breakfast-news/29068/breakfast-news-mporium-horizon-discovery-cerillion-and-others-29068.html
Juncker and May fail to reach Brexit deal amid DUP doubts over Irish border http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29067/juncker-and-may-fail-to-reach-brexit-deal-amid-dup-doubts-over-irish-border-29067.html Video commentary for December 4th 2017

Eoin Treacy's view
A link to today's video commentary is posted in the Subscriber's Area.

Some of the topics covered include: rotation underway in response to the passing of tax cuts in the USA. Technology overbought conditions being unwound, domestically oriented sectors breaking out, gold steady, Rupee firm, oil pulls back from $65, 5-year bond yield tests the upper side of its range.

Juncker and May fail to reach Brexit deal amid DUP doubts over Irish border

This article by Daniel Boffey and Lisa O’Carroll for the Guardian may be of interest to subscribers. Here is a section: 
The text of the agreement has to be discussed in 27 national capitals, if EU leaders are to sign it off at a summit on 14-15 December. “The less time we have before the European council, the more difficult it becomes to run the text through 27 national administrations and get an agreement,” said one. “It is [the UK’s] decision to leave it to the last minute and it is [the UK’s] risk.”

Juncker and May attempted to put a brave face on the spectacular collapse of their plans in press statements at the end of the day. The commission president praised May for being a “tough negotiator” who was energetically fighting for Britain’s interests.

May insisted that progress was in sight and that the negotiators would reassemble by the end of the week, with Wednesday evening now sketched into officials diaries. “On many of the issues there is a common understanding and crucially it is clear we want to move forward together”, May told reporters. “There are a couple of issues, some differences do remain, which require further negotiation and consultation. And those will continue but we will reconvene before the end of the week and I am also confident we will conclude this positively.”

Government sources made clear that there were two key sticking points yet to be solved in the negotiations with the EU27 - the role of the European Court of Justice when it came to citizen rights and the Irish border.


Eoin Treacy's view
The Democratic Unionists (DUP) must be thanking their lucky stars that Theresa May needs their help to keep her government afloat. She has little choice than to consider their interests in the negotiations. As I see it there are five potential options for the question of the Irish border to be resolved.

Overextensions relative to the trend mean

Eoin Treacy's view
The passage of the tax bill was initially seen as a bullish catalyst for Wall Street but the primary indices gave up much of their advances by the end of the session. If we drill down a little further we can see there are some clear winners and losers.

Eoin's personal portfolio: stock market short initiated


Eoin Treacy's view
Details of these trades are posted in the Subscriber's Area.

Eoin's personal portfolio update from December 1st

Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.

Russian Ships Near Data Cables Are Too Close for U.S. Comfort
Thanks to a subscriber for this article by David E.Sanger and Eric Schmitt for the New York Times. Here is a section:
The issue goes beyond old worries during the Cold War that the Russians would tap into the cables — a task American intelligence agencies also mastered decades ago. The alarm today is deeper: The ultimate Russian hack on the United States could involve severing the fiber-optic cables at some of their hardest-to-access locations to halt the instant communications on which the West’s governments, economies and citizens have grown dependent.

While there is no evidence yet of any cable cutting, the concern is part of a growing wariness among senior American and allied military and intelligence officials over the accelerated activity by Russian armed forces around the globe. At the same time, the internal debate in Washington illustrates how the United States is increasingly viewing every Russian move through a lens of deep distrust, reminiscent of relations during the Cold War.

Eoin Treacy's view
The USA is now the world’s largest oil producer, and its economy is not as dependent on energy as other major producers. At the other end of the spectrum Russia and Saudi Arabia are also major producers but their economies are close to totally dependent on energy. Just how much of a gamechanger unconventional oil and gas supply is cannot be underestimated as the geopolitical implications continue to unfold.

Email of the day on cannabis investments
Could you add and / or analyze the Cannabis Marijuana ETF isin code CA44054J1012? I'm sure the sector is of interest

Eoin Treacy's view
Thank you for this suggestion. I agree cannabis is a very topical sector not least as the USA’s opioid epidemic continues to make headlines.

Email of the day on total known holdings of gold

The chart for Total Known ETF holdings of Gold has started to accelerate upwards in the last few days. Could you comment as to whether this is significant.

Eoin Treacy's view
Thank you for bringing this chart to my attention.
Mars and beyond: Modular nuclear reactors set to power next wave of deep space exploration

This article from Gizmag may be of interest to subscribers. Here is a section:

Rated at 10 kilowatts, the Kilopower reactor puts out enough power to support two average American homes and can run continuously for ten years without refueling. Instead of plutonium, it uses a solid, cast uranium 235 reactor core 6 inches (15 cm) in diameter. This is surrounded by a beryllium oxide reflector with a mechanism at one end for removing and inserting a single rod of boron carbide. This rod starts and stops the reactor while the reflector catches escaping neutrons and bounces them back into the core, improving the efficiency of the self-regulating fission reaction. Until activated, the core is only mildly radioactive.

And

The design is modular, so the self-contained reactor units can be hooked together to provide as much power as and where it's needed, whether it's a deep space probe or a Martian outpost. According to Lee Mason, STMD's principal technologist for Power and Energy Storage at NASA Headquarters, the technology is "agnostic" to its environment, allowing it a wide range of applications.

Eoin Treacy's view
Small, modular and safe reactors, that can be produced in factories and transported to their destination via regular roads represent perhaps the only feasible future for the nuclear industry. The fact NASA is moving ahead with such designs, for its own purposes, increases the potential similar programs will find utility in the wider economy.

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Tue, 05 Dec 2017 08:43:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29067/juncker-and-may-fail-to-reach-brexit-deal-amid-dup-doubts-over-irish-border-29067.html
Beaufort Securities Breakfast Alert : Rail fares to rise by average of 3.4% http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29066/beaufort-securities-breakfast-alert-rail-fares-to-rise-by-average-of-34-29066.html Markets


Europe
The FTSE-100 finished yesterday's session 0.53% higher at 7,338.97, whilst the FTSE AIM All-Share index was up 0.24% at 1,024.46. In continental Europe, the CAC-40 finished 1.36% higher at 5,389.29 whilst the DAX was up 1.53% at 13,058.55.
Wall Street
Last night in New York, the Dow Jones closed 0.24% higher at 24,290.05, the S&P 500 fell 0.11% to end at 2,639.44 and the Nasdaq finished 1.05% lower at 6,775.37.
Asia
In Asian markets this morning, the Nikkei 225 was down 0.18% at 22,665.24 and the Hang Seng was 0.46% lower at 29,004.10.
Oil
In early trade today, WTI crude was 0.07% higher at $57.51 per barrel and Brent was flat at $62.45 per barrel.

Headlines


Rail fares to rise by average of 3.4%
Train fares in Britain will go up by an average of 3.4% from 2 January, the rail industry has announced. The increase covers both regulated fares, which includes season tickets, and unregulated fares, such as off-peak leisure tickets. The rise in regulated fares had already been capped at July's Retail Prices Index inflation rate of 3.6%. The Rail Delivery Group said that more than 97% of money from fares goes back into improving and running the railway. It added that in the next 18 months alone, this plan will see services around the country improved with more trains and better services and stations. Routes to benefit include Crossrail, Thameslink, Edinburgh to Glasgow, Great Western and Waterloo and the South West while there will also be upgrades in the Midlands and the North. Paul Plummer, Rail Delivery Group chief executive, said: "Government controls increases to almost half of fares, including season tickets, with the rest heavily influenced by the payments train companies make to government. "Alongside investment from the public and private sectors, money from fares is underpinning the partnership railway's long-term plan to change and improve."
Source: BBC News

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Tue, 05 Dec 2017 08:41:00 +0000 http://www.proactiveinvestors.co.uk/columns/beaufort-securities/29066/beaufort-securities-breakfast-alert-rail-fares-to-rise-by-average-of-34-29066.html
Come on Arlene http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29065/come-on-arlene-29065.html FTSE 100 Index called to open flat at 7340, extending yesterday’s late bounce from 7300 to break above Sunday falling highs resistance. Bulls need a break above yesterday’s late 7350 highs, Bears a break below intersecting rising support at 7335. Watch levels: Bullish 7355, Bearish 7330.

Calls for a flat start come after a very mixed finish on Wall St where US tax cut inspired sector rotation saw further dumping of Technology - profit taking, less perceived benefit - in favour of more growth sensitive and value names including Banks, Retail and materials.

This mixed performance was echoed in Asia overnight, where even improved China PMI data failed to boost sentiment, commodity prices pressured by China growth curbs and a USD Index off its lows. Brexit uncertainty buoying the FTSE via fresh GBP weakness, but oil lower weighing amid continued selling since last week’s OPEC/NOPEC extension agreement.

In corporate news, Ferguson Q1 revenues +10% with growth across all units and geographies, profits and margins rise, growth in-line since end of quarter, reiterates guidance. John Wood wins multi-million contract with GlaxoSmithKline subsidiary. Vodafone enters strategic alliance with SoftBank. UK FCA launches investigation into Provident Financial car finance unit Moneybarn. Cineworld to pay $23 cash for each Regal Entertainment common share, 43.2% premium. Victrex profits grow faster than revenues, div +15%. Northgate continues to expect our profit this year to be skewed towards the second half.

US equity markets saw a significant swing in sentiment yesterday as a broad-based Tech sell-off offset positivity after Senate Republicans passed their tax reform bill over the weekend. The Dow Jones was the only index to hold onto gains, closing at a fresh record 58 points stronger having traded as much as 300 points higher in the session. The S&P 500 and Nasdaq both closed lower, the former touching an intraday high before closing with small losses, while the latter underperformed the wider market.

Crude Oil prices have extended their retreat from Friday’s OPEC/non-OPEC production cut extension highs as the US continues its move higher. Brent Crude falls to a 1-week low of $62.7, while its US counterpart has pared Friday’s gains, falling to $57.2. Gold continues to trade sideways after the Senate Republican tax reform bill was passed, awaiting a cue from the US dollar to break out of its current $1271-1277 range.

In focus today will be the fallout from yesterday’s failed Brexit talks as PM Theresa May tries to salvage a deal with the EU before the all-important 14-15 summit. Having seen the DUP party scupper a deal at the 11th hour yesterday on concerns of regulatory divergence between Northern Ireland and the rest of the UK, May now needs to head back to the table with her ‘supply and confidence’ partner to hash out differences before a potential return to Brussels tomorrow. Expect soundbites and Twitter reports aplenty, as was the case yesterday, as the complicated border talks continue.

Data-wise, a range of Service PMI prints headlines proceedings. Kicking off in Europe, mainland countries (Spain, Italy, France, Germany and headline Eurozone) are all seen further in November, while the UK retreats. This afternoon, the US equivalent is expected to be confirmed marginally higher in November. Other releases include Eurozone Retail Sales (10am), expected to retreat from a 2-year high, alongside US ISM Non-Manufacturing (3pm) falling back from a 13-year high.

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Tue, 05 Dec 2017 08:36:00 +0000 http://www.proactiveinvestors.co.uk/columns/morning-market-pulse/29065/come-on-arlene-29065.html
Today's Market View - Atalaya Mining, Bacanora Minerals and Galileo Resources http://www.proactiveinvestors.co.uk/columns/sp-angel/29063/today-s-market-view-atalaya-mining-bacanora-minerals-and-galileo-resources-29063.html Atalaya Mining (LON:ATYM) – Expansion to 15mtpa approved - £39m placing proposed
Bacanora Minerals (LON:BCN) – President and director resigns
Galileo Resources (LON:GLR) – Drilling at Star Zinc Project

 

China’s ‘New Economy’ threatens commodity bull run
• Encouraging demand is expected to sustain buoyant commodities into 2019, lifted by growth across emerging markets as well as advanced economies. Interest in the commodity sector has flourished this year, as the Bloomberg Commodity Index surged almost 10% since June on improving market conditions, while raw material assets under management in the second half of 2017 were boosted by almost 20% to $417 billion through end-October, representing the highest level since 2014 (Citigroup).
• Tightening balances are expected to support the level of investment in the sector, however with significant risk from the slowing Chinese economy. Uncertainties surround the levels of sustained demand as the largest consumer of commodities transition from ‘Old Economy’ to ‘New Economy’. Growth in China is contracting as President Xi Jinping focuses on the quality of expansion rather than the pace of it.
• Incentives like the ‘One Road One Belt’ will continue to sustain commodity demand as the world’s second largest economy looks to increase its global footprint.

China’s 2018 steel output seen rising even after mill closures
• Crude steel output set to rise 3% to 832mt this year and a further 0.7% in 2018 as major mills ramp up operations offsetting impact of shutdown of outdated plants
• Growth comes after crackdown on illegal low grade steel products which were never included in statistics, supplies now filled in by legal steel mills
China complains about steel glut as nation continues to build capacity
• It’s amazing that the nation that has increased steel production and capacity far beyond any other is now complaining that the rest of the world is not doing its bit to cut capacity.
• The Global Steel Forum, a group of G20 and 13 other nations declared last week in Berlin an ambitious package of policy solutions to tackle global overcapacity.
• Press reports indicate that the US is not happy with the proposals as the forum does not tackle the root causes of excess capacity.
• China is not happy either and does not want to be the one going through the painful process of capacity reduction while the rest of the world just watches, which is faintly amusing since China is principally responsible for the overcapacity.

Electric car push drives premiums for greener metals
• Companies such as VW and BMW are reported to be starting to pay a premium for sustainable and traceable metals.
• Higher prices may also be paid for low carbon products as well as highly processed forms of metals for electric batteries as sustainability issues look set to play increasing focus in raw material procurement

Rio Tinto to develop ‘intelligent’ Australian iron ore mine
• Next year managers at Rio Tinto will seek board approval to develop their first intelligent iron ore mine at a cost of $2.2bn.
• The plan is to fully incorporate technologies such as robotics, driverless trains and trucks on a single site at the new Koodaideri iron ore mine in the Pilbara, Western Australia
• The iron ore mine is planned to produce 40mtpa by 2021 but this may eventually rise to 70mtpa
• The cost of employing and managing staff in this hot and remote region is the principal driver for Rio Tinto with truck drivers thought to be earning >A$100,000pa, supervisors on up to A$230,000 and train drivers on A$250,000 plus.

Dow Jones Industrials  -0.17% at 24,232
Nikkei 225   -0.49% at 22,707
HK Hang Seng   +0.36% at 29,179
Shanghai Composite    -0.24% at 3,310
FTSE 350 Mining   +0.27% at 16,576
AIM Basic Resources   -1.06% at 2,607

Economics
US – US Senate narrowly voted through a tax overhaul on Saturday (51-49) with negotiations between the Senate and the House to begin this week with a view to agree the final version of the bill to go to President
• It is a non-farm payrolls week marking the last jobs report before the December monetary policy meeting.
• The report will provide a mostly clean gauge of labour activity following two months of hurricane distortions.
• Estimates are for the number of new jobs to come in at 199k compared to 261k in October or an average of 140k over two months of October/September.
• Economists are not unanimous on potential effects of tax cuts and infrastructure spending on the economy, according to the latest survey.
• Around half of economists see policy changes adding 0.2-0.4pp to growth in 2018, while 20% forecast a larger gaina dn 20% see no benefit to growth, according to the National Association for Business Economics.
• Despite a modest pick up in growth in 2018, a slight majority still forecasts a recession starting before the end of 2019 versus 48% seeing the expansion running through at least 2020.

UK – PM Theresa May is meeting Jean-Claude Juncker, the EC president, to iron out last disagreements ahead of the EU summit on Dec 14-15 in an effort to progress Brexit discussions further to trade terms.
• Two of the most important discussion points would be Norther Ireland border and the future of European courts in Britain, FT reports.

Turkey – Inflation hit the highest level in 14 years putting more pressure on the central bank to raise from current 12.25%.
• Consumer prices climbed 13.0%yoy in November compared with a 11.9%yoy increase recorded in the previous month.
• Turkish lira continued to weaken against the US$ currently trading close to the lowest level on record.

Currencies
US$1.1861/eur vs 1.1927/eur yesterday.   Yen 112.96/$ vs 112.59/$.  SAr 13.775/$ vs 13.668/$.  $1.344/gbp vs $1.352/gbp
0.759/aud vs 0.758/aud.   CNY 6.619/$ vs 6.607/$.

Commodity News
Precious metals:         
Gold US$1,273/oz vs US$1,276/oz last week
• Spot gold price fell under pressure from an improving dollar as the US Senate passed its tax reform bill over the weekend. The House-Senate conference committee will now be responsible for resolving the difference between the proposed House and Senate tax bills, with expectations for the bill to assist with sustaining corporate capital investment and [merger and acquisition] activities as both bill call for a reduction in the corporate tax rate to 20%.
• The dollar rebounded to a two-week high after falling on the news that Michael Flynn, former national security adviser to Trump, pleaded guilty to lying to the US Federal Bureau of Investigations about alleged contact with Russia.
• A potentially higher yield trajectory on US Federal Reserve’s interest rates across 2018 have renewed market interest in the dollar, harming precious metal prices.
• Geopolitical tensions could be on the rise as a week-long joint US and South Korea air exercise, called Vigilant Ace, has received condemnation from the North who state the US are “begging for nuclear war”. The drill is expected to involve some 230 aircraft, including two dozen stealth jets and tens of thousands of military personnel which could be at threat from North Korea as it would “seriously consider” counter-measures.
   Gold ETFs 71.9moz vs US$71.5moz last week
Platinum US$934/oz vs US$943/oz last week
Palladium US$1,023/oz vs US$1,015/oz last week
Silver US$16.33/oz vs US$16.44/oz last week
           
Base metals:   
Copper US$ 6,834/t vs US$6,789/t last week
• Base metal prices have been broadly supported by Chinese Purchasing Managers’ Index (PMI) readings, which continued to show expanding activity to rise to 51.8. Higher than expected data maintains a positive short-term outlook, while strike concerns at Southern Peru Copper Corp and Teck’s Quebrada Blanca copper mine give underlying supply doubt as unions attempt to renegotiate higher wages on elevated metal prices. Copper stocks dropped 4.1% in November to 460,000 tonnes across Shanghai-bonded warehouses.
Aluminium US$ 2,072/t vs US$2,056/t last week
Nickel US$ 11,400/t vs US$11,135/t last week
Zinc US$ 3,224/t vs US$3,170/t last week
Lead US$ 2,541/t vs US$2,488/t last week
Tin US$ 19,510/t vs US$19,520/t last week
           
Energy:           
Oil US$63.4/bbl vs US$63.1/bbl last week
• Despite hedge funds hiking bullish bets on US production, US shale oil producers appear to have followed suit with OPEC’s decision to extend the global output cuts until the end of 2018. Money managers boosted bullish wagers on US crude last week to the highest on record since 2009, raising its combined futures and options position by 51,853 contracts to 451,877.
Natural Gas US$3.110/mmbtu vs US$3.092/mmbtu last week
Uranium US$23.00/lb vs US$23.25/lb last week

Bulk:   
Iron ore 62% Fe spot (cfr Tianjin) US$70.5/t vs US$68.2/t
• Spot iron ore surged up almost 20% from late October lows to climb beyond the $70/t level, as China’s crackdown on steel output over the winter emission period runs down inventories and builds demand for high-grade ore supply. The initiative to reduce harmful levels of pollutants across key producing provinces has effectively diminished inventories, with “the rally expected to be driven by a further tightening of the Chinese steel market, Chinese steel mills’ active restocking of high-grade iron ore, seasonally weak seaborne supply, and a recognition that iron ore supply growth passes its peak during the first quarter of 2018”, according to Citi analysis.
• The push toward improved environmental conditions has also prompted an increased demand for higher-grade ore which causes less pollution and more efficient energy, boosting the premium on higher-quality ore.
Chinese steel rebar 25mm US$755.4/t vs US$742.4/t
• Despite extensive mill closures, China’s steel output is expected to continue rising, increasing a further 3% to 832 million tonnes this year. The impact of closures of outdated plants and winter capacity cuts are being offset by major mills ramping up operations, with output growth extending 0.7% into 2018.
Thermal coal (1st year forward cif ARA) US$85.6/t vs US$85.2/t
Premium hard coking coal Aus fob US$215.7/t vs US$211.3/t
           
Other:  
Tungsten APT European US$291-300/mtu vs US$275-285/mtu last week
Cobalt LME 3m US$66250/t vs US$66750/t last week

Company News
Atalaya Mining (LON:ATYM) 174 pence, Mkt Cap £203m – Expansion to 15mtpa approved - £39m placing proposed
• Atalaya Mining has announced that it intends to proceed with a previously announced proposal to increase throughput at its Proyecto Riotinto from the current 9.5mtpa to 15mtpa increasing average copper output by around 40% or 15,000 tpa to 55-55,000 tpa of copper in concentrate.
• Subject to financing and permitting issues, the company plans to start construction work during Q1 2018 with commissioning of the expansion expected to take place during the second half of 2019 and a ramp up to full production during H1 2020.
• The project, which is forecast to cost €80.4m, is expected to reduce “cash costs and all-in sustaining costs by approximately 7% … based on maintenance and processing efficiencies”.
• “Management expects that the expansion project will result in an incremental post-tax net present value (NPV) of approximately US$113 million (assuming an 8% discount rate) and a post-tax internal rate of return (IRR) of approximately 43%, when assuming a US$3.00/lb copper price, US$18.00/oz silver price, and USD:EUR of 1.15.”
• Major elements of the expansion programme are a new primary crushing system and SAG mill, and additional flotation cells and concentrate handling capacity.
• In order to finance the expansion, Atalaya Mining proposes to raise £39m by the issue of approximately 23.3m new shares at £1.67/share. Based on the current issued share capital  disclosed on the company’s website we estimate that, if issued in full, the new shares represent around 17% of the enlarged company.
• We note that “The four largest existing shareholders ("Key Shareholders") have already committed to participate in the Placing, in accordance with their pre-existing contractual entitlement rights”. Trafigura, (22%), Yanggu Xiangguang Copper (21.9%) and Liberty Metals & Mining Holdings (13.98%) have all agreed to maintain their current stakes and Orion Mine Finance (14.56%) has agreed to take a further 1.8m shares or 8% of the proposed placing.
• Atalaya Mining’s team achieved commercial production at Proyecto Riotinto on 1st February 2016 at an initial 5mtpa capacity and leapfrogged the planned incremental expansion to 7.5mtpa moving straight to the current 9.5mtpa rate by July 2016. We interpret this as a demonstration of the technical and operational proficiency of the management which bodes well for the efficient delivery of the new expansion to 15mtpa.
Conclusion: Atalaya Mining’s plan to increase the capacity of its Riotinto operation is a relatively low-risk incremental expansion of an existing operating mine where management has already delivered previous expansion projects smoothly. The company’s economic case focuses on reduction of unit costs and sustaining capital requirements to deliver an attractive incremental post-tax IRR of 43% for the expansion. The proposed £39m financing has received the backing of the main shareholders representing over 70% of the current share capital.

Bacanora Minerals (LON:BCN) 95.5p, Mkt Cap £127m – President and director resigns
• Bacanora Minerals report the resignation of the Martin Vidal, President and director of the company as of 30 November.
• No explanation has been given as to the resignation though we note that Mr Vidal is to remain with the company in an advisory / consultancy capacity.
• We wonder if Mr Vidal has disagreed with the board’s filing of a statement of claim with the Court of Queen's Bench in Alberta striking out the 3% over-riding royalty held by the Estate of Colin Orr-Ewing.
• We also wonder why Bacanora did not announce the news of Mr Vidal’s departure on Friday?
• Last week Bacanora reported its first quarter financial results:
• Expenses were C$1.26m for the quarter but this rises to C$2.2m when including stock-based compensation.  Adding in other adjustments takes the total loss to C$2.7m which adds up to an annualized C$10.8m for a full year though much will change if the company moves into the construction phase.
• Bacanora reports it is fully financed with approximately US$24m in the bank and is fully funded through to the initial development of Sonora and the start of the construction stages.
• The company expects to report on its new Feasibility Study this year and appears to be updating its lithium carbonate pricing assumptions in the feasibility study based on prices published on https://seekingalpha.com/article/4117788-lithium-miner-news-month-october-2017
Conclusion: we conclude that all is not well with the board of Bacanora Minerals. We expect Bacanora will look to finance the construction of the Sonora project shortly after publication of the Feasibility Study.
*SP Angel is completely independent of Bacanora Minerals and the Orr-Ewing Family estate. The above text represents the author’s independent and personal views as a mining analyst and an observer of the company over many years. Note, we are not advising investors to buy or sell this stock.

Galileo Resources (LON:GLR) 1.375 pence, Mkt Cap £3.5m – Drilling at Star Zinc Project
• The company reports plans to start drilling an initial 1750m this week at the recently acquired Star Zinc Project in Zambia where Galileo Resources holds a 51% interest and may earn up to 85% via the completion of a preliminary economic assessment.
• Galileo Resources has engaged the consultants, CSA Global to prepare a JORC (2012) compliant mineral resource estimate along with the Zambian based GeoQuest who will manage the drilling programme and provide geological support.
• Commenting on the fast-tracking of the drilling, and the soil sampling programme which is expected to be reported shortly, CEO, Colin Bird, said “This imminent drilling programme is designed to confirm a regulatory JORC code resource and to test the potential of other nearby areas considered to be prospective.  On completion of this drilling programme, we intend to commence a preliminary economic assessment.”
Conclusion: Previous reports and non-JORC compliant mineral resource estimates have indicated that the Star deposit is a small but high grade deposit with zinc grades of around 20% zinc at a cut-off grade, higher than the resource grade of many deposits,  of 14% zinc. With its long history in mining, we consider Zambia to be a relatively attractive area for mining and exploration and look forward to the results of the drilling and the subsequent resource estimate and preliminary economics and to any indications of expansion potential for the Star deposit.

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Mon, 04 Dec 2017 10:24:00 +0000 http://www.proactiveinvestors.co.uk/columns/sp-angel/29063/today-s-market-view-atalaya-mining-bacanora-minerals-and-galileo-resources-29063.html
Amerisur, Genel Energy, Reabold Resources http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29062/amerisur-genel-energy-reabold-resources-29062.html Amerisur Resources - LON:AMER
A flash blog today as I am travelling, will detail more tomorrow. AMER has announced its monthly production and OBA throughput numbers which are in line with my expectations. Average production of 6,051 b/d making 7,037 b/d including Mariposa-1 LTT which will rise substantially. Peak production was 7,217 with OBA throughput of 5,768 b/d and a peak of 7,066. Years exit rate will be over 7,000 as forecast and average just below 5,000 as expected due to Government actions beyond their control.


Genel Energy- LON:GENL Taq Taq ‘encouraging’…
Obviously the company are pleased to have a meaningful incremental producer on the field, but the real encouragement here is in the free water level being at least 145 metres lower than their previous working assumption. I am assuming that they will need time to work out what that means in terms of reserves, production and activity – and will have to put this result in the context of the overall field decline they have seen this year. But it is positive and nice to be on the front foot with Taq Taq after the disappointing news flow over the past couple of years.


Reabold Resources - LON:RBD
Reabold has announced another deal today by which they have paid £1.5m for 29% of Danube Petroleum which has a 50% interest in the high impact Parta licence onshore Romania. The low risk nature of this investment, with two appraisal wells next year for a potential 33 BCF of gas and maybe some oil as well is typical of Reabold’s management style and I expect more to come. I have spoken to Steve Williams this morning and will write up in detail tomorrow. I will also detail the interesting deal done by Upland last week which more than franks their investment in the Corallian acquisition, I spoke briefly with Steve Staley and have a call with him also planned for tomorrow.

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Mon, 04 Dec 2017 09:18:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-pay-zone/29062/amerisur-genel-energy-reabold-resources-29062.html
Breakfast News - Castleton Technology, BMR Group, Versarien, Alliance Pharma, Rose Petroleum and others http://www.proactiveinvestors.co.uk/columns/hybridan-small-cap-wrap/29064/breakfast-news-castleton-technology-bmr-group-versarien-alliance-pharma-rose-petroleum-and-others-29064.html AIM

Fusion Antibodies—Belfast based contract research organisation providing services to biopharmaceutical and diagnostics companies that are involved in the development of antibodies for both therapeutic drug and diagnostic applications.  Offer TBA. Due Mid Dec.

Sirius Petroleum—RTO. Becoming an operating company in the Ororo Field in Nigeria. Raising £7.2m/ Mkt Cap £35.6m.  Due 19 Dec.

Bushveld Minerals—RTO of Bushveld Vametco and therefore 78.8% of Strategic Minerals Corporation, the intermediate holding company that owns a 75 per cent. interest in the Vametco Vanadium Mine.

Range Resources— oil and gas company listed on the ASX plans to admit to AIM on 13 Dec with market cap of £17.4m. Also acquiring Range Resources Drilling Services Limited, an oil services business based in Trinidad & Tobago  with extensive drilling capabilities.

Eqtec—Company with access to a proprietary advanced gasification technology used in industrial size power plants to convert waste into synthetic gas to generate electricity.  Raising £1.6m. Mkt Cap £8.7m. Due 21 Dec.

Volex VLX.L—The global provider of cable assemblies is proposing to move from the main market to AIM on 19 January. £71m market cap. FYMar18E rev £241.5m and £7.19m PBT

Belluscura— Provider of premium medical devices at value prices to address part of the global unmet need for affordable, premium quality medical devices.  Raising £7.5m to £10m. Offer TBA. Due early Dec

Miriad Advertising—Global video advertising company incorporated in 2015 and is engaged in the development of native in-video advertising . 2016 rev £0.7m and £7.3m operating loss. Offer TBA. Expected 6 Dec.

OnTheMarket—Intention to float on AIM to raise c.£50m which will be used to fund the growth of the OnTheMarket.com portal, already the third biggest UK residential property portal provider. Expected valuation £200m to £250m.

Main Market Specialist Fund Segment

Sure Ventures –Raising  up to £50m at £1. Focus on FinTech, IoT and Augmented/Virtual Reality. Due 8 Dec.

Main Market Standard Listing

Shefa Yamin minerals company focused on the exploration for precious stones in Northern Israel. Net Proceeds will be used to advance the Company's mining project. Offer TBA.

Main Market Premium Listing

Greensphere Capital -$500m raise.  Aims to provide Shareholders with an attractive yield from a portfolio of sustainable infrastructure assets diversified by geographies and sectors and to realise long-term growth  capital value.  Due 20 Dec

Vivo Energy—The Africa-focused company, which operates around 1,800 Shell forecourts across 16 countries  reported by City A.M. to be preparing for a London float next year

Aberdeen Standard European Logistics Income—Investment Trust targeting £250m raise. Investing in a high quality portfolio of European logistics assets. Due 15 Dec.

Tri-Pillar Infrastructure— Investing a broad range of infrastructure assets located predominantly in continental Europe and North America. Seeking £200m raise at 100p.  Due 8 December.

Sabre Insurance Group—Private motor insurance underwriter, founded in 1982. Raising C.£206m to purchase outstanding preference shares.  Generated gross written premiums  in 2016. Due December. 220p to 240p. Mkt cap £550m to £600m.

Aviva Investors Secure Income REIT  - Targeting £200m raise. Will invest in a diversified portfolio of high quality, long-lease commercial real estate assets located within the UK and leased to predominantly investment grade tenants. Due 8 Dec. 

Breakfast buffet

Arix Bioscience (LON:ARIX) 180p £173m

The global healthcare and life science company supporting medical innovation, has led an oversubscribed $30m Series F financing round for Atox Bio. Atox Bio is a late stage clinical biotechnology company developing novel immune modulators for critically ill patients with severe infections including necrotising soft tissue infections (NSTI) and acute kidney injury (AKI).  Atox Bio's lead therapeutic candidate, Reltecimod, is a novel peptide that modulates the body's immune response, lowering the risk of potential morbidities and mortality. Reltecimod received Orphan Drug status from the FDA and EMA as well as Fast Track designation. Atox Bio is conducting a Phase 3 clinical study of Reltecimod for patients with NSTIs, and will start a Phase 2 clinical study for AKIs in 2018.

Pennant International Group (LON:PEN) 75.5p £24.9m

“The supplier of integrated training and support solutions, products and services, principally to the defence, rail, aerospace and naval sectors and to Government Departments, is pleased to announce that it has entered into a teaming agreement with Capewell Aerial Systems LLC (a global provider of engineered products for aerial delivery, life support and tactical gear for military, law enforcement and humanitarian agencies worldwide).”

Pennant and Capewell have identified a number of opportunities to work together in North America and elsewhere to provide complementary products and services, enhancing end user experience and value, and on 29 November 2017, signed a teaming agreement which provides the framework to develop and implement these opportunities.” FYDec17E rev £16m, PBT £2.1m. 

Ergomed (LON:ERGO) 191.5p £81.73m

The specialised pharmaceutical services and drug development company, today announces that its pharmacovigilance subsidiary PrimeVigilance will be organising and presenting at the International Society of Pharmacovigilance's Intelligent Automation in Pharmacovigilance seminar to be held at Biogen's headquarters in Cambridge, MA, from 4-5 December 2017.

"PrimeVigilance has consistently demonstrated growth which is in no small part due to our market-leading adoption of new techniques and technologies and we are at the forefront of robotic automation, the next leap forward in technology for our industry.” FYDec17E rev £48.6m,  PBT £2.59m.

Provexis (LON:PXS) 0.6p £11.3m

“The business that develops, licenses and sells the proprietary, scientifically-proven Fruitflow® heart-health functional food ingredient, is delighted to announce the filing of a patent application relating to the use of Fruitflow® in protecting against the adverse effects of air pollution on the body's cardiovascular system.

Recent laboratory work has shown that Fruitflow can reduce the platelet activation caused by airborne particulate matter, such as that from diesel emissions, by approximately one third. The beneficial effects of this reduction can be observed in laboratory models representing healthy subjects as well as in models representing subjects with an underlying cardiovascular problem.” We could see no forecasts.

Rose Petroleum (LON:ROSE) 4.13p £4.65m

“The  natural resources business, is pleased to announce that following the completion of the 3D seismic acquisition, as announced on 24 October 2017, the processing of the data acquired is now nearing completion and initial data provided by our processing consultants, 3D Imaging Technology, is of excellent quality. First pass interpretation of the structures within the Cane Creek unit are very encouraging. Multiple structures that are likely to contain natural fractures are visible and work will now focus on detailed mapping and reservoir characterisation to better define them and identify targets for drilling. The processing of the data is expected to be completed in one week and interpretation work will continue to define the drill targets within the Paradox Clastics. The interpretation process is expected to take around 5 to 8 weeks.” Drill permitting expected to commence thereafter.

Alliance Pharma (LON:APH) 58p £275m

Agreement to acquire the worldwide rights to Vamousse from TyraTech Inc for an initial consideration of $13.0m and deferred contingent consideration of up to $4.5m. This agreement is subject to the approval of TyraTech's shareholders and the purchase is expected to complete before 31 December 2017. The Vamousse assets comprise an innovative, pesticide-free range of consumer healthcare products for the prevention and treatment of human head lice. Vamousse was launched in the US and the UK in 2014 and has gained strong retail distribution in both territories. Net sales of Vamousse by TyraTech for the year ended 31 December 2016 were $6.6m with a gross profit of $4.6m and for the 6 months to 30 June 2017 net sales were $3.3m with a gross profit of $2.3m. FYDec17E rev £103.5m, PBT £24.8m.  PE c.15x.

Versarien (LON:VRS) 60.5p £89.2m

The advanced materials engineering group, is pleased to announce that it has signed an  agreement with a US headquartered global chemical supplier, which will allow to both companies to begin collaborating across a number of projects.

The Partner, a Fortune 100 company, will use Versarien's proprietary Nanene few layer graphene nano-platelets, along with other 2D products manufactured by Versarien, in different potential applications. Both groups will work together on research, development and testing of compounded materials, with the objective of replacing incumbent additives across different chemical variants to improve material performance.” We could see no forecasts.

BMR Group (LON:BMR) 1.9p £4.5m

“The Board notes the announcement by Galileo Resources PLC this morning concerning the Star Zinc project.

The Board of BMR is pleased to confirm that, following the payment by BMR to Bushbuck Resources Limited of $0.3m, in accordance with the agreement summarised in the announcement of 5 September 2017, the Republic of Zambia Ministry Mines and Minerals Development confirmed on 1 December 2017 receipt of the request by Bushbuck to transfer the Star Zinc licence (19653-HQ-LEL) to Enviro Processing Limited, a subsidiary of BMR.”

Castleton Technology (LON:CTP) 63.5p £49.98m

Acquisition of Kinetic Information Systems Pty Ltd, the leading provider of software solutions to the Community Housing sector in Australia, for an initial cash consideration of AU$2.0m and deferred cash payment of AU$0.5m.  A further cash payment of up to AU$0.5m  may also be payable dependent on financial performance. Kinetic: Revenue of AU$2.3m (£1.3m) and normalised EBITDA of AU$0.6m (£0.3m) for the year to 30 June 2017 .

FYMar18E Rev £22.7m and £4.12m PBT. PE c.13x.

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Mon, 04 Dec 2017 09:17:00 +0000 http://www.proactiveinvestors.co.uk/columns/hybridan-small-cap-wrap/29064/breakfast-news-castleton-technology-bmr-group-versarien-alliance-pharma-rose-petroleum-and-others-29064.html
Buy the rumour sell the news? http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29061/buy-the-rumour-sell-the-news-29061.html Buy the rumour sell the news?




Eoin Treacy's view
The stock market is a discounting mechanism which takes expectations for future potential and gives them a present value. That’s pretty much an accepted truism in any markets. The big question is always just how much future potential has been priced in?



How the Flynn Charges Box In Trump
This article by Noah Feldman for Bloomberg may be of interest to subscribers. Here is a section:
The content of the Flynn-Kislyak conversations deepens the narrative that special counsel Robert Mueller has been building: Earlier guilty pleas revealed Russian efforts to connect with the Trump campaign; this one reveals official contacts between the Trump team and Russia after the election -- contact significant enough for Flynn to lie to the FBI about.

The fact that the lies concern Russia makes it politically harder for Trump to fire Mueller or to pardon Flynn than if the charge had involved Flynn's other legal woes over his unreported lobbying for Turkey.



Eoin Treacy's view
The Mueller investigation of ties between the Russian government and the Trump administration represents a potential powder keg for the political arena which could potentially bleed into the markets. It is looking increasingly likely that the tax legislation will get passed ahead of the release of whatever conclusions the investigation reaches but it is a wild card that could contribute to volatility.

A section from a note by Russell Napier is posted in the Subscriber's Area.
 

 



Eoin's personal portfolio




Eoin Treacy's view
One of the requests subscribers have asked for most over the last few years has been to have an easy way to find what positions I have open at any given time. Therefore, from now on I will update this post with any open positions I have on a daily basis.



U.S. regulator says it will allow CME Group, CBOE to list bitcoin futures
Thanks to a subscriber for this article from Reuters which may be of interest. Here is a section:
The announcement by the Commodity Futures Trading Commission (CFTC) paves the way for CME and CBOE to become the first traditional U.S. regulated exchanges to launch trading in bitcoin-related financial contracts, in a watershed moment for the cryptocurrency that should lead to greater regulatory scrutiny.

Trading in the CME and CBOE bitcoin futures contracts, which will be priced against and settled in the cash bitcoin market, should begin by year end, a CFTC official said.

Bitcoin soared above $11,000 for the first time this week, up 10-fold year-to-date and prompting multiple warnings of a bubble.

To guard against volatility, CME and CBOE will put in place stricter than usual risk-management safeguards, including initial margin requirements of between 35 percent and 40 percent.

The exchanges have also agreed to enter into information sharing agreements and to send the CFTC data on the settlement process so the regulator can conduct its own surveillance.   



Eoin Treacy's view
When I have traded bitcoin via spread-bets over the last year the minimum margin requirement has been somewhere in the region of 20% and increases to over 30% depending on the size of the position. For futures contracts where the positions are generally larger, the margin requirement of 35-40% is in line with bitcoin’s volatility since 30% drawdowns are not at all uncommon. What that also means is that the ROI of trading bitcoin is quite high, in other words the quantity required in the pay to play environment is quite high relative to other assets.

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Mon, 04 Dec 2017 09:10:00 +0000 http://www.proactiveinvestors.co.uk/columns/fuller-treacy-money/29061/buy-the-rumour-sell-the-news-29061.html
VSA Capital Market Movers - Egdon Resources http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/29060/vsa-capital-market-movers-egdon-resources-29060.html Egdon Resources (LON:EDR)
Egdon Resources has announced that it has acquired a 100% interest in offshore License P2304 from Arenite Petroleum and Eruope Oil & Gas (EOG LN) which runs until December 2018. Located offshore from North Yorkshire, the license area is immediately South of EDR’s P1929 License which contains the Resolution gas discovery. The consideration is a nominal fee primarily covering licensing costs etc although EDR have agreed future staged payments in relation to the completion of successful milestones.

Resolution is mapped by EDR as extending southwards into the new license block and the new block also contains a gas discovery confirmed by historical wells, drilled by Total (FP FP) and Conoco, which tested at rates up to 34mmcfd and 1,280 barrels per day of condensate. At both Resolution and this new discovery there is further prospectivity for deeper gas in the Carboniferous sandstones underlying the proven Zechstein sequences.

EDR has previously indicated that it intends to carry out seismic surveys across the Resolution discovery in order to better target future drilling. The discovery is a significant asset within EDR’s portfolio and we believe that this additional license block will enable EDR to fully exploit the potential of this attractive asset, in our view.

We reiterate our Buy recommendation and 48.8p target price.

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Mon, 04 Dec 2017 08:36:00 +0000 http://www.proactiveinvestors.co.uk/columns/vsa-capital-market-movers/29060/vsa-capital-market-movers-egdon-resources-29060.html