column Proactiveinvestors column RSS feed en Mon, 24 Apr 2017 00:42:28 +0100 Genera CMS (Proactiveinvestors) (Proactiveinvestors) Fundamentals returning to the fore in mining, at long last Fri, 21 Apr 2017 12:36:00 +0100 Commodities Week in a Minute: 'tis the season to plead for votes* Commodities
Diamonds and precious stones
Bit of a round-up of events this week,

Overall, sentiment seems ok and the flow of finished goods coming into inventories, originating from purchases made in early 2017, have not caused any significant concerns, unlike in previous years. We continue to see gently improving sales numbers from the large Chinese retailers, Chow Tai Fook and Luk Fook both feel like they have bottomed out.

Alrosa Q1 production +9% to 8.9Mcts, but more importantly, sales were +17% to 14.1Mcts. Global inventories are certainly reducing, another positive in my view.

After all of that hullabaloo a couple of weeks ago, it seems the Dominion saga has gone a bit cold. Operationally, things are picking up but the value of the company’s lower value production continues to send shudders down the backs of shareholders with average production values declining to $87/ct from $177/ct in the previous year, albeit when sales were rather more selective… Remember this isn’t the only time DDC has been on the block, we did this this dance back in 2015, and 2013…

Precious metals

Not much to say regarding bullion this week to be frightfully honest.

Given the scale of the upward revision to date in 2017 (+11.2%) a $15/oz retrace can seem a lot if you are a day trader, but seeing as we are still broadly $150/oz above where we were in mid-December, I am still pretty relaxed with a long position here.

Once again we had the IMF dusting off their crystal ball and helpfully telling us what we already knew, that in the event of sharply higher interest rates, US corporates would struggle to cover interest payments. Thanks for that lads.

All eyes on Round one in France this weekend…

Keep an eye on the impact of the changes to the VanEck Vectors Junior Gold fund.


There is a little treat for you on that link as well.

Base metals:

So we started the week with the news that a surge in industrial activity pushed up China’s annual economic growth rate to 6.9% in the first quarter. Growth for Q1 was comfortably ahead of the Chinese premier Li Keqiang’s prediction that full year growth would be “around 6.5%”.
I note that Freeport are again facing some operational problems at their vast Grasberg operations (One of the largest copper/gold mines in the world) the company notes “high absenteeism” as a result of their latest round of layoffs.
It’s called a “strike” chaps!

Company announcements/news/meetings:

Acacia Mining (Under Review): What do you call a deer with no eyes and legs? Still no-eye deer
That I am afraid sums up Acacia for me right now. With Brad on a plane to hopefully meet the President (Still not done so yet) the company has no idea how the concentrate ban will play out but as we head towards the August deadline for 30% of the operating assets to be “locally owned”. One seriously hopes the deadline for the financial committee, estimated to be mid-May, does not start to impede the publication of the prospectus.
I genuinely feel for the company right now, especially if it comes to the nuclear option of closing both Buly and Buzwagi in the next few months which would seriously impact the shares further.
For info, I value N Mara at around 275p so in the worst case scenario, at least we have a base to work from.
Anglo Pacific (N/c): Catch up meeting
Mr Treger popped into ONC this week to update us on all events APF.
I don’t think I need to dwell too much on the valuation, but it does seem as though there is certainly an overhang of some description limiting what I had expected an upwards pop given the c50% exposure to coking coal through Kestrel.
On that, the Rio statement this week all but confirmed sales would not be impacted as there were sufficient stockpiles at the port to manage the disruption. From a financial perspective, assuming APF budget $150/t average for production in 2017, should Q2 coking coal settle anywhere close to the current price, I would estimate an additional $10-$15m of revenue in H1 alone… Hmm
Certainly pays for that dividend…
Gem Diamonds (Buy): New chairman announced
Gem announced the appointment of Harry Kenyon-Slaney as an independent Non-Executive Director and Chairman of the Company to succeed Roger Davis. Mr Kenyon-Slaney’s appointment will take effect after the AGM on the 6 June 2017.
With the shares now drifting around the 90p level, concerns over cash generation due to the lack of large diamond recoveries are understandable. I still stand by my view that recoveries will pick up as operations migrate into more prospective areas of the Letšeng pipe.
Highland Gold (N/C): Meeting at ONC
The team came to see us last Friday and I have to say I was genuinely impressed. In extending the life of the MNV operations out to at least 2022, it has removed the niggling concerns over a production shortfall ahead of the key Kekura project commences production in 2020.
Elsewhere in the portfolio, sensible valuation accretive steps are being taken such as increasing throughput and unlocking the value of nearby deposits such as Blagodatnoye that will also serve to reduce grade volatility and enhance recovery rates. Novo, which is the largest contributor to EBITDA (55%) is expected to increase production rates from 700ktpa to 1.3mtpa ensuring the impact of the anticipated grade reduction is mitigated by more efficient operations and output increasing by 20%-30%
With average an AISC, I suspect, remaining below $700/oz ($652/oz in 2016), the total distribution to shareholders of 10.4p/share (about 6% yield cum-div) will remain a key factor to consider. I do concede that there is not really a clearly defined pay-out policy at HGM, yet!
So in summation, production set to almost double by 2020, production costs well below $700/oz, a solid history of dividend growth and catalysts in the form of updated resource and reserve estimates due later in the year, I would say HGM is certainly one to put on your list for consideration.
Polymetal (Buy): Q1 production update
“Polymetal's Q1 FY2017 production results are in line with our assumptions with production increasing 8% to 280Koz GE. Production growth at Omolon along with the addition of Komar (Varvara) and Kapan more than offset the planned reduction in silver production at Dukat. Full year production guidance of 1.4Moz, gold equivalent, cash costs of $600-650/GEoz and AISC of $775-825/GEoz have been reiterated. We thereby reaffirm our positive stance and 1192p target price”.
Happy here, interestingly the company noted that there is c100koz of Au in inventory worth >$100m that will be sold in Q2 due to the normal seasonal impacts of Q1. 
Randgold Resources (Buy): Kibali update and secret message
On Tuesday Mr B informed us that everything was going very well at Kibali. Production is forecasted at 610koz this year, from 585koz with annual production rising to 750koz pa from 2018. Which was fine, but
In the small print they mentioned that the 2002 Mining code was to be reviewed with the clear intention to increase state revenues and that there is now more than $200m in unpaid TVA and duty refunds… hmmm.

Companies reporting next week include: Petra Diamonds, Anglo American, Antofagasta, Fresnillo, Hochschild and Kaz there should be plenty to keep us entertained.
Upcoming company meetings with PG: Gemfields, Ariana.

If you have a company or investment opportunity that you feel we should explore or simply revisit, please do get in touch.

Fri, 21 Apr 2017 12:32:00 +0100
Zak Mir: Making sense of the Bitcoin revolution Fri, 21 Apr 2017 12:31:00 +0100 Oil price, Amerisur, Ithaca Energy. And finally... WTI $50.27 -17c, Brent $52.99 +6c, Diff -$2.72 +23c, NG $3.16 -3c

Oil price

The news was fairly good yesterday but despite that, crude oil trade was lacklustre. Both the Saudis and the Kuwaitis suggested that production cuts should be ‘prolonged’ but Kuwait added that they could be reduced if 2H demand rises as expected. Finally it was reported that Iraqi output is down at the moment by around 140/- but that hasn’t affected markets yet either.

Certainly if the refinery run figure we saw this week continues demand for crude will rise but then the bears will say that product stocks will rise, let’s see what happens come the Driving Season which starts May 29th. Finally, whilst it’s not an oily matter there are elections in France at the weekend in which 11 candidates are whittled down to 2. As they stand at the moment, the polls who should not be trusted,give an order of Macron, Le Pen, Fillon and Melenchon, most of whom fill with despair but a Le Pen v Melenchon final would take some choosing…

Amerisur Resources

Plenty of news around from AMER at the moment and it is good to see the share price at long last picking up, it has been unjustifiably low recently. The promised wells are now coming thick and fast and today they announce the spudding of Platanillo-21 on Pad 2N. This is a short deviation directional well aimed at the crest of the mapped structure aimed at getting better information about the structure in the northern part of the field. They will do logging while drilling and use wireline techniques and intend to acquire core data through the entire Villeta sequence. Expect the well to take around 27 days subject to data gathering and dry hole costs area modest $3m. Finally the company has announced that the AGM is to be held on 9th May, I might even make the trip this year…

Ithaca Energy

Last week I had been planning to write another interim report on IAE but heard that it was all over bar the shouting so didn’t in the end. Today the company has announced that 70.3% of the non-Delek votes have accepted the offer. This reminds me of the Centrica offer for Venture Production where shareholders also sold the company down the river. Of course the VP directors stood and fought, unlike the IAE directors who have taken their 30 or so pieces of silver. Now don’t get me wrong, I have immense respect for Les Thomas and team which is why I have said that they should have stayed and taken the company to the next level and I do appreciate that they have to assess the risks involved in making that decision, I would at least like to see Les and team reappear with another ‘venture’. Date extended to 3rd May, after which I will need a new bucket list participant, might even be a company run by someone who was on the board of Venture…

And finally…

After a hard fought game with what seemed like endless chances the Red Devils finally beat Anderlecht last night but injuries and tiredness will likely take their toll. Back home it’s the FA Cup semi-finals with Chelski v Spurs and the Gooners v the Noisy Neighbours. It looks like Arsene is keeping his job which will be made easier if he wins the Cup but that is far from a certainty.

In the remaining Premiership games the Eagles go to the HubCap Stealers and Burnley host the Red Devils whilst at the bottom of the table the Hull City Tigers take on the Boro.

And whilst talking about football it is very sad to see that Ugo Ehiogu died this morning at the age of 44 having most recently been coaching at Spurs.

Rugby sees the Semi-Finals of the European Champions Cup, tomorrow is Munster v Sarries and on Sunday it is Clermont Auvergne v Leinster.

And of course a mention for all those dedicated runners taking part in the London Marathon on Sunday. A special shout out to Tim Gregory, Founder of Vermeer Investment Management, and of course Catherine Berrow who is raising money for the Anthony Nolan Trust which we hold very close…

Fri, 21 Apr 2017 11:26:00 +0100
Today's Market View - Bluejay Mining, Strategic Minerals and Solgold Bluejay Mining* (LON:JAY) – Greenland operating company to focus on starting production in 2018
Solgold* (LON:SOLG) – Hole 21 extends known strike length by 20%
Strategic Minerals* (LON:SML) – Quarterly report highlights improved performance at Cobre.

Miners climb amid a jump in iron ore prices with prices for benchmark 62% Fe material trading at $67/t, up from low of $60.2/t recorded on Tuesday.
• The euro is range bound against the US$ with investors remaining on the side-lines ahead of the French vote this weekend.
• The pound is level against the US$ with earlier gains given up on the back of weaker than expected retail sales numbers for Mar.
• Both gold and base metals are also little changed with the precious metals trading around the $1,280/oz level and copper at $5,655/t.
• Iron ore futures post a 5.1% rebound on the DCE after hitting the weakest level on nearly six months earlier this week.

121 Mining Investment conference – sponsored by SP Angel - 10–11 May 2017
• The 121 team are running the London 121 Mining Investment conference at No 8 Fenchurch Street in The City on 10-11 May.
• The event is for registered investment professionals, mining and exploration companies and mining analysts and brings the industry together alongside a series of investor briefings.
• 65 quality producers, developers and explorers attending / presenting
• I’m talking at 3:00 on the Thursday on:  ‘UK mining outlook - A new era of UK funded exploration and production’.
• Follow link for investor passes -

Dow Jones Industrials  +0.85% at 20,579
Nikkei 225   +1.03% at 18,621 
HK Hang Seng   +0.13% at 24,087 
Shanghai Composite    +0.03% at 3,173 
FTSE 350 Mining   +1.99% at 15,308
AIM Basic Resources   -0.32% at 2,687

Economic News
Date Index Period Actual Est Previous
Monday New York Manufacturing Apr 5.2 15.0 16.4
Tuesday Housing Starts MoM Mar -6.8 -3.0 5.0
  Building Permits MoM Mar 3.6 2.8 -6.0
  Industrial Production MoM Mar 0.5 0.5 0.1
  Capacity Utilization Mar 76.1 76.1 75.7
Wednesday Fed Beige Book       
Thursday Weekly Jobless Claims   244k 240k 234k
Friday Markit Manufacturing PMI Apr (Prelim)   53.8 53.3
Markit Services PMI Apr (Prelim)  53.2 52.8
  Existing Home Sales MoM Mar   2.2 -3.7
Source: Bloomberg    

Japan - Strong overseas demand is driving strong manufacturing sector performance.
• New export orders hit the strongest level seen in the last three years.
• On the back of robust private sector activity, companies added to their workforce at rate that matched Jan’s 34-month peak.
• Inflation was reported to have picked up as well as evidenced by higher input and output prices.
• Markit Manufacturing PMI: 52.8 v 52.4 in Mar.

Germany – While weaker than forecast and down on the Mar numbers, Apr Composite PMI point to a continued growth in the private sector and a strong start to Q2/17.
• Employment remained robust with only a fractional easing from Mar six year high.
• Growth in new business orders slowed slightly but remained strong overall with export orders posting the second highest reading in six years.
• While final goods prices growth moderated for the first time since Aug/16, the pace remained strong overall as producers continued to pass through increasing input costs.
• “At 56.3, the Composite Output Index lost a little ground from Mar’s 57.1 but is nonetheless above the Q1 average of 56.0 which itself was the highest of any quarter since Q2/11,” Markit concluded.
• Markit Manufacturing PMI: 58.2 v 58.3 in Mar and 58.0 forecast.
• Markit Services PMI: 54.7 v 55.6 in Mar and 55.5 forecast.
• Markit Composite PMI: 56.3 v 57.1 in Mar and 56.8 forecast.

UK – Retail sales recorded the first quarterly decline since 2013 which “seems to be a consequence of price increases across a whole range of sectors”, the ONS said.
• Excluding auto fuel, sales were down 1.5%mom taking the yoy change to +2.6%, down from a 4.1%yoy increase in Feb.
• Total sales including fuels in the three months to Mar were down 1.4%yoy.

France – German and French 10y bond yields spread narrowed to the lowest in a little over a week as a terrorist attack in Paris threatened to disrupt the presidential race.
• Marine Le Pen is currently viewed as having just under a 25% chance in winning both rounds , while the leader in the race Emmanuel Macron is running at c.55%. according to UK betting agencies.
• France released a good set of manufacturing and services PMIs this morning beating market estimates.
• Positive report highlighted a 10th consecutive increase in new business orders in both sectors of the economy.
• Stronger client demand gave companies the confidence to raise employment.
• Inflation is reported to have continued to exert pressure on producers with some of that having been successfully transferred onto consumers.
• Selling prices climbed for the first time in five years driven by the manufacturing sector with output prices broadly unchanged in the service sector.
• “The number provide further evidence that the French private sector remains resilient to political uncertainty around the upcoming presidential election,” the report said.
• Markit Manufacturing PMI: 55.1 v 53.3 in Mar and 53.1 forecast.
• Markit Services PMI: 57.7 v 57.5 in Mar and 57.0 forecast.
• Markit Composite PMI: 57.4 v 56.8 in Mar and 56.2 forecast.

US$1.0733/eur vs 1.0742/eur yesterday.   Yen 109.24/$ vs 108.97/$.   SAr 13.156/$ vs 13.237/$.   $1.282/gbp vs $1.283/gbp.  
0.754/aud vs 0.752/aud.   CNY 6.883/$ vs 6.885/$.

Commodity News
Precious metals:
Gold US$1,280/oz vs US$1,280/oz yesterday
   Gold ETFs 59.9moz vs US$59.7moz yesterday
Platinum US$976/oz vs US$970/oz yesterday
Palladium US$802/oz vs US$785/oz yesterday
Silver US$17.97/oz vs US$18.17/oz yesterday
Base metals:   
Copper US$ 5,660/t vs US$5,605/t yesterday – Grasberg is reported to be in final stages to secure the permit allowing concentrate exports to be ramped up to full capacity, Bloomberg reports.
• It remains unclear what is the status of negotiations between the government and Freeport on the ownership of the local subsidiary owning mining rights going forward.
• Bloomberg also says that it is hard to say if the proposed labour strike by 9,000 unionised workers will go through as planned in May.
• Previously, miners threatened to down tools for the entire month of May protesting over layoffs and employees being place on leave.
Aluminium US$ 1,949/t vs US$1,929/t yesterday
Nickel US$ 9,480/t vs US$9,465/t yesterday
Zinc US$ 2,631/t vs US$2,602/t yesterday
Lead US$ 2,156/t vs US$2,162/t yesterday
Tin US$ 19,860/t vs US$19,870/t yesterday
Oil US$53.1/bbl vs US$53.2/bbl yesterday
Natural Gas US$3.176/mmbtu vs US$3.191/mmbtu yesterday
Uranium US$23.00/lb vs US$23.00/lb yesterday
Iron ore 62% Fe spot (cfr Tianjin) US$66.9/t vs US$62.9/t
Chinese steel rebar 25mm US$504.1/t vs US$504.0/t
Thermal coal (1st year forward cif ARA) US$67.0/t vs US$66.8/t yesterday
Premium hard coking coal Aus fob US$289.5/t vs US$302.0/t

Tungsten - APT European prices $205-215/mtu vs $205-215/mtu

Company News
Bluejay Mining* (LON:JAY) 14p, Mkt Cap £103m – Greenland operating company to focus on starting production in 2018
(formerly FinnAust Mining)
BUY Target Price 22p
• BlueJay Mining report the creation of a new local operating subsidiary company in Greenland to hold the Pituffik project license.
• The report restates that the company is focussed on commencing production in 2018 and that the team are focussed on the production of a bulk sample “proof of concept” from the Pituffik project this year.
• The target for starting production so soon feels ambitious for any normal mining concern but may be helped by the ability to dredge mine the mineral sands.
• Royal IHC, the Dutch dredging company, is supporting work on the dredging of shallow and near shore marine mineral sands at Pituffik.  The support of such a major dredging company is an important positive for the company and may enable management to meet their target to start production in 2018.
• Royal IHC are focussed on technological innovation in dredging and offer dredging solutions for harsh environments and claim there is no more waiting for good weather.  The statements on the Royal IHC website offer an interesting insight into the ambitions of the company and determination to operate in challenging conditions.
• Dredging shallow marine and beech sands should be relatively straightforward for Royal IHC though there questions remain over how many months in the year a dredge may be able to operate for in the north of Greenland.
• It will be interesting to see if it proves to be better to campaign mine the ilmenite mineral sands using a larger dredge through the better weather of the summer months or if the dredging company might prefer to operate a smaller dredge for a longer period.
• The unusually high grade and relatively clean nature of the in-situ mineral sands at Pituffik should make mineral concentration very much easier effectively reducing the size of dredge and supporting infrastructure.
• For example they should be able to remove 20% of the oversize material through simple screening at the point of mining  potentially improving grades by 30% before concentration enabling grades of >20% ilmenite to be mined pre-concentration.  This will enable the use of a smaller and cheaper plant to manage the same tonnage of material, reducing operating costs and potentially enabling Bluejay to extend the operating field season.
• Management recently declared a JORC inferred resource of 23.6mt bearing 8.8% ilmenite in-situ with a high-grade zone of 7.9mt grading 14.2% ilmenite at Moriusaq bay.
• Feasibility and production studies are ongoing.
Conclusion:  It’s good to see BlueJay preparing the way to start production next year.  We look forward to more details on its plan to start mining and confirmation of the  economic parameters around the project.
*SP Angel act as nomad and broker to Bluejay Mining

Solgold* (LON:SOLG) 45p, Mkt Cap £601m – Hole 21 extends known strike length by 20%
(SolGold holds an 85% interest in ENSA which holds 100% of Cascabel)
• SolGold report results from hole CSD-17-021 extending the known strike length of the mineralised deposit by some 150m to 900m. The assay results which come from the lower portion of the hole between 650m and the end of the hole at 1619.2m.
• The results reported today using a 0.3% copper equivalent cut-off show an 844m long down hole intersection at an average grade of 0.73% copper and 0.43g/t gold from a depth of 688m. The company notes that “The outstanding Hole 21 assay results from 0m to 650m are not expected to produce significant intersections.”
• Using a higher, 0.7% Cu equivalent cut-off, shows 3 discrete mineralised zones within this broader intersection:-
o 304m averaging 0.99% copper and 0.63g/t gold between 962m and 1266m down hole;
o 98m averaging 0.57% copper and 0.46g/t gold between 1278m and 1376m down hole and
o 100m averaging 0.69% copper and 0.46g/t gold between 1396m and 1496m down hole
o Solgold also discloses that “holes 23R, 24 and 25 are in progress at current depths of 844.3m, 1170.7m, and 1203.7m respectively. Further updates on the progress of these holes, testing both depth and further strike extensions to the southeast of Hole 21 at Alpala, will be provided when drilling of these holes nears completion.”
o In a wider summary of progress so far on its exploration at Cascabel  Solgold reiterates that it has now drilled at 3 of the 15 identified exploration targets within a 2.2km long mineralised corridor up to 700m wide which extends from the Trivinio prospect in the north-west to the Cristal target in the south-east.
o A total of 35,000 metres of drilling has been completed so far with exploration costs to date totalling US$43m. The rate of exploration is now being accelerated following the investments by Newcrest, Guyana Goldfields and Maxit Capital with the deployment of 7 drill rigs by October this year increasing to 10 rigs next year when it is planned to increase exploration to 90,000 metres of core drilling in 2018 with the objective of delineating “the system limits along the greater Alpala trend prior to a maiden resource statement, and to test the other multiple targets within the concession.”
o The company “is currently planning further metallurgical testing and completion of an independent Pre-Feasibility Study at Cascabel.” Mining scenarios currently under consideration include “both high tonnage open cut and underground block caving operations, as well as a high grade / low tonnage initial underground development …”.
o Solgold also discloses that it has “applied for additional exploration licences in Ecuador over a number of promising porphyry copper gold targets throughout the Country. Solgold is negotiating external funding options which will provide the Company with the ability to have some of these projects fully funded by a third party while focussing on Cascabel.”
Conclusion: Solgold is accelerating its exploration at Cascabel as it works towards a Pre-Feasibility Study and considers appropriate mining development options. In addition, it is building upon its in-country expertise to acquire additional exploration licences though, prudently in our view, exploring third party funding options in order to focus its efforts on the advancement of Cascabel.
*SP Angel acts as Nomad and Broker to SolGold; An SP Angel analyst has previously visited the Cascabel project.

Strategic Minerals* (LON:SML) 2p, Mkt Cap £24.5m – Quarterly report highlights improved performance at Cobre.
• Strategic Minerals’ quarterly report for the 3 months ending 301st March shows magnetite sales of 14,264 tonnes generating revenues of US$834,000 compared with 3,427 tonnes (US$227,00) a year earlier. We also note that the March 2017 quarterly sales are some 4,800 tonnes and US$300,000 higher than the quarterly sales achieved during the December 2016 quarter.
• The company recently announced that it had secured a new client for its Cobre magnetite sale operation with an agreed minimum offtake of 4,000 tonnes per month from 1st June which “indicates that the remainder of 2017 may provide further strong sales figures which would positively impact Strategic Minerals’ bottom line.”
• Cobre’s “pre-tax profit margin for the March quarter 2017 exceeded 50%” which, given the outstanding tax losses available at Cobre, would imply that if the prices achieved during Q1 are maintained, the new client business alone could potentially generate an additional $820,000 in 2017 while at the current sales rates and margins existing client business could represent approximately $1.6m pa.
• “Over the period, the Company continued to maintain a tight control on overheads which continue to remain under US$1 million … on an annualised basis”. On this basis, in addition to the 31st March cash balance of US$695,014, it is clear that the  Cobre operation alone is more than sufficient to meet corporate costs as well as providing cashflow to help fund exploration.
• Elsewhere, the first phase of drilling at 50% owned Cornwall Resources Redmoor tin  tungsten project in Cornwall is now underway with the aim of confirming and extending the existing inferred resource base of 13.3m tonnes at an average grade of 0.21% tin, 0.32% copper and 0.16% WO3. The first phase of drilling comprises 13 drill-holes with a further 10 reserved for phase 2 later in the year when the proposed locations of the holes can be refined in the light of the earlier results.
• At the 75% owned Central Australian Rare Earths (CARE) project at Hanns Camp in Western Australia, a programme of re-assaying of samples from the 2016 drilling programme “identified the potential for a significant cobalt deposit” and as a result “it was decided by the Board of CARE to concentrate the next exploration phase on the potential Cobalt deposit”.
• The financial stability afforded by the Cobre operations is also, we surmise, behind the company’s comment that it “is in a cash generative phase, utilising its cash reserves for self funded exploration at both Redmoor and Hanns Camp, as well as actively considering new projects.”
Conclusion: The company has made significant progress both in advancing its exploration projects in the UK and in Australia as well as reinforcing its financial base through the expansion of its Cobre magnetite business. We look forward to the drilling results from Redmoor, more details of the cobalt potential of Nanns Camp and, in due course to the outcome of the company’s efforts to identify new projects.
*SP Angel act as Nomad and joint broker to Strategic Minerals

Fri, 21 Apr 2017 10:32:00 +0100
VSA Capital Market Movers - Metal Tiger Metal Tiger (LON:MTR)
Metal Tiger  has announced that its private placing with Sprott has closed, raising £4.85m at a placing price of 3p/sh via the issuance of 161.7m shares with an equal number of warrants which have an exercise price of 6p/sh and five year exercise period. The funds will go towards the development of the T3 copper project in Botswana.

We reiterate our Buy recommendation although reduce our target price by 17% to 4p to reflect the dilution.

Fri, 21 Apr 2017 08:35:00 +0100
Beaufort Securities Breakfast Alert: Ortac Resources, Salt Lake Potash and Unilever Today's edition features:
• Ortac Resources (LON:OTC)
Salt Lake Potash (LON:SO4)
• Unilever (LON:ULVR)

"Trumponomics went centre stage again yesterday evening as US Treasury Secretary, Steven Mnuchin, picked up Donald Trump's campaign baton. During a speech at the Institute of International Finance Washington Policy Summit, he declared his confidence that the country's citizens will soon be enjoying the most significant tax code changes since Ronald Reagan. Promising much fewer tax brackets for individuals, he confirmed the sweeping proposals are now a top priority for the President. Mnuchin also expects to release a 'Regulatory Relief' report in early June and hopes the debt ceiling will be raised 'before the summer'. Telling his audience that whether or not the Healthcare Bill become law, "we're going to get tax reform done". Markets, of course, love such reflationary talk, even if many consider such plans are already jeopardised by failure to date to get any significant part of the President's revolutionary agenda through Congress. US stock indices nevertheless were climbing way before he spoke on Thursday, on the back of gains in financials and industrials. All three principal US indices rose broadly and convincingly, led by the NASDAQ on its way to achieving a new all-time high, as American Express added 5.4% having posted a smaller decline in profits than expected, while Industrials were also buoyant helped by CSX Corp spiking 6.8% as it exceeded Wall Street forecasts. Stabilising oil prices also helped sentiment, with US crude pushing 0.2% higher to $50.94 a barrel during the US session, after Saudi Arabia's energy minister said the Organization of the Petroleum Exporting Countries is likely to reach an agreement to extend existing production cuts into the second half of the year. Asian equities picked up this improving confidence, with the Nikkei opening at its highest of the week and going on to gain more than 1% while the US$:Yen pared losses. The ASX followed behind and Hang Seng remained in positive territory, leaving just the Shanghai Composite once again nursing minor losses in continuing response to the Chinese government's efforts to curb speculative trading in the highly volatile index. Whether last night's presumed terrorist shooting on the Champs-Élysées might knock today's European opening, or change voting intentions ahead of Sunday's Presidential poll, remains to be seen. The STOXX Europe 600 had ended higher Thursday afternoon, led by the CAC-40, as investors become increasingly convinced independent centrist Emmanuel Macron will succeed in becoming the country's new leader, while Eurozone consumer confidence improved for a second straight month in April, as the flash index rose to -3.6 from -5. UK macro releases today include March Retail Sales figures, while the EU provides its February Current Account and Markit Manufacturing and Composite PMI for April. The US also releases its own April Markit data, Existing Homes Sales and the Baker Hughes US Oil Rig Count. FOMC Member Neel Karkashi is also due to make a speech. UK corporates due to release earnings or trading updates today include Close Brothers (LON:CBG), Record (LON:REC) and Bonmarche Holdings (LON:BON). An unsettled background will leave London investors somewhat perplexed this morning, as they try to weight ramifications both of latest news and anticipations ahead of Sunday's important vote. The FTSE-100 is seen simply hitching a ride on the overnight markets, with an opening gain of 5 to 10 points."
- Barry Gibb, Research Analyst


The FTSE-100 finished yesterday's session 0.06% higher at 7,118.54 whilst the FTSE AIM All-Share index was 0.50% better off at 944.95. In continental Europe, the CAC-40 finished up 1.48% at 5,077.91 whilst the DAX was 0.09% higher at 12,027.32.
Wall Street
In New York last night, the Dow Jones rose 0.85% to 20,578.71, the S&P-500 added 0.76% to 2,355.84 and the Nasdaq improved 0.92% to stand at 5,916.78.
In Asian markets this morning, the Nikkei 225 had added 0.79% to 18,576.64, while the Hang Seng rose 0.08% to 24,075.16.
In early trade today, WTI crude was down 0.34% to $50.27/bbl and Brent was up 0.13% to $53.06/bbl.

Company news

Ortac Resources (LON:OTC, 3.75p) - Speculative Buy
Ortac Resources has announced it has entered into a joint venture with a Slovakian company to jointly develop the Sturec gold project (900koz of reserves). The JV needs to be formalised in a legally binding contract, but presumably this is either close or highly likely to complete.

Our view: Ortac has been trying to develop Sturec for too long and most observers have probably written it off. But if this JV can unlock the local political support Sturec requires to achieve mine construction, it will be great news for Ortac shareholders. In fact Sturec's value is hardly, if at all, reflected in Ortac's share price. Assuming reasonable JV terms this development could lead to a re-rating for Ortac and a jump in the share price.

Beaufort Securities acts as corporate broker to Ortac Resources plc

Salt Lake Potash (LON:SO4, 29.50p) - Speculative Buy
Salt Lake Potash visited our London office yesterday. Management discussed its plan to build a small-scale process plant in 4Q17 which should mean production in 2H18. It's being called a pilot plant but it could produce up to 40ktpa of high quality Sulphate of Potash (SOP) and be profitable. Based on a capex estimate of $35m and an our estimate production cost of US$300/t, a 40kt operation could produce US$10m of operating cashflow. Management also described the bigger picture and touched on the interest in SO4's projects being shown by global SOP players. This was also mentioned in yesterday's RNS.

Our view: This pilot plant development should provide catalysts for the stock over the next 12 - 18 months. However the investment case is overwhelmingly dominated by the potential for a large scale and very long life SOP operation. SO4 has a very large footprint in Western Australia with 9 potash containing salt lakes and 4750km2 of licences. It has the potential to be a major low cost SOP producer in an excellent jurisdiction with rail and power infrastructure. Also, unlike standard potash commodities, SOP's price has been strong with a very positive outlook due to its low salt content (SOP is 2.5x the price of benchmark KCL potash products such as Muriate of Potash, MOP). With a market cap of less than £40m we regard SO4 as the next Sirius, certainly in terms of upside potential. In fact unlike Sirius, SO4 has a far lower capex requirement, an established high value end product, and none of Sirius' massive underground engineering challenges. Maybe the trade should be buy SO4 and sell Sirius? We will update you in due course.

Unilever (ULON:LVR, 3,950.00p) – Buy
Unilever plc, a consumer goods company manufacturing, distributing and marketing branded and packaged goods, yesterday provided a trading statement for the 3 months ended 31 March 2017 ('Q1 FY2017'). During the period, revenue advanced by +6.1% to €13.3bn at a reported basis (including a favourable currency impact of +2.4% and +0.7% from acquisitions net of disposals), against the comparable period (Q1 FY2016). Underlying sales growth was +2.9%, supported by +3.0% increase in price, but -0.1% fall in volume. Divisionally, Refreshment (+5.4% underlying sales growth), Home Care (+4.1% underlying sales growth) and Personal Care (+3.1% underlying sales growth) performed ahead of its markets, while sales in Foods division saw flat underlying sales year-on-year due to timing of Easter this year. Geographically, emerging markets continue to show strong growth with +6.1% growth in underlying sales, supported by +0.8% increase in volume and +5.3% rise in price. The increase in price was due to rising commodity costs, particularly in Asia. Developed market, on the other hand, saw decline in underlying sales by -1.5%, fuelled by -1.3% fall in volume and -0.3% drop in price. Europe continue to see weak consumer demand and price deflation in many countries, apart from the UK. On the operational front, the Group said its 'Connected for Growth' programme is starting to "bear fruit", making it more agile and closer to the local markets, unlocking both further growth and margin. Unilever's CEO, Paul Polman commented "The first quarter shows growth once more ahead of our markets. This reflects our continued investment in both innovations and brand support, and reconfirms the strength of our long term sustainable compounding growth model". The Board declared Q1 dividend of 30.21p per Unilever Plc ordinary share, up +18.2% (+12% in Euro term), to be paid on 7 June 2017.

Our view: Unilever delivered strong performance during the Q1 FY2017, continuing to outperform its market. The underlying sales growth of +2.9% came ahead of the consensus Analysts' estimate of +2.0%, despite the effect of stronger comparative period (Q1 FY2016: +4.7% underlying sales growth with +2.6% volume and +2.0% price), one less days in the quarter as well as later timing of Easter. All of the growth came from +3.0% increase in price, which more than offset the tiny volume decline of -0.1%. The increase in price was seen in all division and geographical region other than the Europe which suffers from weak consumer demand and price deflation. Asia has led the price growth due to rising commodity costs. Contrary to Q4 FY2016, Refreshments, Personal Care and Home Care was strong, while Food was at below expectation dragged down by the -5.1% decline in its Spreads business. Excluding the Spread business, which Unilever already confirmed its intension to exit (sell or demerge), Food saw underlying sales growth of +1.7%, leading to Group underlying sales growth to +3.4%. Looking ahead, we continue to sense the Board's confidence in its outlook by confirming its underlying sales growth guidance in the range of 3%-5% (FY2016: +3.7%), and its expectation to improve underlying operating margin by at least 0.8%. A +12% hike in dividend (in Euro term) as promised in its business review announced earlier this month too is a great reflection of its long-term confidence. Furthermore, the Group is also scheduled to commence €5 billion share buy-back programme in FY2017. Given the Group's much higher share price since the offer from Kraft Heinz (which has been rejected by the Unilever and subsequently withdrawn), we see yesterday's Q1 performance as positive step towards delivering upper-end of its FY2017 guidance. The shares are valued at FY2017E P/E of 22.3x, along with dividend yield of 3.0%. Beaufort reiterates its Buy rating on the shares with a target price of 4330p. Unilever is one of Beaufort's 'Tips for 2017' recommendations.

Fri, 21 Apr 2017 08:28:00 +0100
Britain Led by Theresa May Will Become a European Haven of Order and Calm Britain Led by Theresa May Will Become a European Haven of Order and Calm
Here is the opening of this incisive column by Ambrose Evans-Pritchard for The Telegraph:

Assuming that Theresa May wins a landslide victory on June 8, she will be the only leader of a major EU state with a crushing mandate and the backing of a unified parliamentary phalanx.
All others will be in varying states of internal disarray. None will have a workable majority in parliament. Bitter internal disputes will continue to fester over the loss of democratic control under monetary union, whether or not eurosceptic parties actually come to power.
This gives the Prime Minister formidable clout. We have moved a long way from the first chaotic weeks after the referendum when Belgian premier Charles Michel could suggest in all seriousness that the British institutional system was disintegrating, a country led by populist dreamers, disappearing into a "black hole". Such was the view in Brussels.
The tables have since turned. Britain will enter the Brexit talks led by an ancient and disciplined party of great governing credibility - solid on NATO, free trade, climate accords, and liberal principles - with UKIP and the ephemeral forces of populism scattered to the four winds.
Discord lies on the other side of the Channel. Let us suppose that the ardent Europeanist Emmanuel Macron makes it through to the presidential run-off in the French elections on Sunday - far from certain - and therefore captures the Elysee two weeks later. How is he going to govern and reform France?
His manifesto is studiously vague. The French parliament will be split five ways and Balkanized. Anti-EU candidates from hard-Left to hard-Right have garnered half the support in this extraordinary campaign, united on core complaints that the EU has eviscerated French sovereignty and that the euro has become a cloak for German interests.
There is much hope in French progressive circles that Mr Macron will be able to rebuild the eurozone on better foundations with a putative Chancellor Martin Schulz in Germany. Even if Mr Schulz were to beat Angela Merkel in October, this would be wishful thinking.
There is scant difference between the German Social Democrats and Christian Democrats on euro ideology. Both are captive to mercantilist thinking. Both think Germany's current account surplus of 8.5pc of GDP is a virtue. Both are opposed to fiscal union and pooling of debts. Both are wedded to creditor interests. There is only a German view.
Italy above all is a political accident waiting to happen. Beppe Grillo's Five Star movement leads the polls by a staggering eight percentage points. It has suffered no erosion after its latest plans for a parallel "fiscal currency", a Trojan horse for the lira.

David Fuller's view
I think AEP is right, although Mrs May will need to be strong, wise and successful in her negotiations with the EU.  This was never going to be easy, especially as EU officials have so far shown a grab what you can mentality.
A PDF of AEP’s article is posted in the Subscriber’s Area.

Why the Market for Fossil Fuels Is All Burnt Out
Here is an early section of this interesting article by Jillian Ambrose for The Telegraph:

If Helm is to be believed the oil market downturn is only getting started. The latest collapse is the harbinger of a global energy revolution which could spell the end-game for fossil fuels. These theories were laughable less than a decade ago when oil prices grazed highs of more than $140 a barrel. But the burn out of the oil industry is approaching quicker than was first thought, and the most senior leaders within the industry are beginning to take note.
In the past, the International Energy Agency (IEA) has faced down criticism that its global energy market forecasts have overestimated the role of oil and underplayed the boom in renewable energy sources. But last month the tone changed. The agency warned oil and gas companies that failing to adapt to the climate policy shift away from fossil fuels and towards cleaner energy would leave a total of $1 trillion in oil assets and $300bn in natural gas assets stranded.
For oil companies who heed Helm’s advice, the route ahead is a ruthless harvest-and-exit strategy. This would mean an aggressive slashing of capital expenditure, pumping of remaining oil reserves while keeping costs to the floor and paying out very high dividends.
“They’d never do it because no company board would contemplate running a smaller company tomorrow than today. It’s not in the zeitgeist of the corporate world we’re in, but that’s what they should do,” Helm says.
BP and Royal Dutch Shell are slowly shifting from oil to gas and making even more tentative steps in the direction of low-carbon energy. But Helm is not entirely convinced that oil companies have grasped the speed with which the industry is undergoing irrevocable change.
“As the oil price fell, at each point, oil executives said that the price would go back up again,” says Helm. “What the oil companies did was borrow to pay their dividends on the assumption that this is a temporary problem. It’s my view that it is permanent,” he adds.
For a start, there is scant precedent for the price highs of recent decades. Between 1900 to the late Sixties oil prices fluctuated in a range between $15 a barrel to just above $30 a barrel – even through two world wars, population growth and a revolution in transport and industry.
It was geopolitical events which caused oil prices to surge by more than $100 a barrel following the Middle East oil embargoes of the late sixties and early seventies. They collapsed back to $20 by the Eighties.
So, what drove oil prices to the heady levels of $140 a barrel just less than 10 years ago?
“China,” says Helm, barely missing a beat. “If you look at both the rapid growth in emissions and the rapid growth of oil, fossil fuel and all commodity prices, it was while China was doubling its economy every seven years. This is a phenomenal rate.

David Fuller's view
Oil prices spiked above $140 a barrel in 2008 because of supply reductions from OPEC countries, not least due to regional wars.  This has never been fully recognised as a huge factor in what is generally remembered as the credit crisis recession which followed. 
In 2009 OPEC lowered production once again, leading to a move back above $120 a barrel two years later.  By 2014 subsidised renewables were gradually eroding the market for crude oil. However, the really big change was the US development of fracking technology, leading to a surge in the production of crude oil and natural gas.
We should always remember these two adages, particularly with commodities: 1) the cure for high prices is high prices.  These lower demand somewhat but the bigger overall influence is an increase in supply.  Conversely, the cure for low prices is low prices.  Demand increases somewhat when prices are lower but more importantly, supply is eventually reduced.
How have these adages influenced commodity prices in recent years and what can we expect over the lengthy medium term?
This item continues in the Subscriber’s Area, where a PDF of the article is also posted.

The Nightmare Scenario for Florida Costal Homeowners
Here is an early section of this somewhat factual report from Bloomberg:

If property values start to fall, Cason said, banks could stop writing 30-year mortgages for coastal homes, shrinking the pool of able buyers and sending prices lower still. Those properties make up a quarter of the city’s tax base; if that revenue fell, the city would struggle to provide the services that make it such a desirable place to live, causing more sales and another drop in revenue.
And all of that could happen before the rising sea consumes a single home.
As President Donald Trump proposes dismantling federal programs aimed at cutting greenhouse gas emissions, officials and residents in South Florida are grappling with the risk that climate change could drag down housing markets. Relative sea levels in South Florida are roughly four inches higher now than in 1992. The National Oceanic and Atmospheric Administration predicts sea levels will rise as much as three feet in Miami by 2060. By the end of the century, according to projections by Zillow, some 934,000 existing Florida properties, worth more than $400 billion, are at risk of being submerged.
The impact is already being felt in South Florida. Tidal flooding now predictably drenches inland streets, even when the sun is out, thanks to the region’s porous limestone bedrock. Saltwater is creeping into the drinking water supply. The area’s drainage canals rely on gravity; as oceans rise, the water utility has had to install giant pumps to push water out to the ocean.
The effects of climate-driven price drops could ripple across the economy, and eventually force the federal government to decide what is owed to people whose home values are ruined by climate change.
Sean Becketti, the chief economist at Freddie Mac, warned in a report last year of a housing crisis for coastal areas more severe than the Great Recession, one that could spread through banks, insurers and other industries. And, unlike the recession, there’s no hope of a bounce back in property values.
Citing Florida as a chief example, he wondered if values would decline gradually or precipitously. Will the catalyst be a bank refusing to issue a mortgage? Will it be an insurer refusing to issue a policy? Or, he asked, “Will the trigger be one or two homeowners who decide to sell defensively?”
“Nobody thinks it’s coming as fast as it is,” said Dan Kipnis, the chairman of Miami Beach’s Marine and Waterfront Protection Authority, who has been trying to find a buyer for his home in Miami Beach for almost a year, and has already lowered his asking price twice.
Some South Florida homeowners, stuck in a twist on the prisoner’s dilemma, are deciding to sell now—not necessarily because they want to move, but because they’re worried their neighbors will sell first.
When Nancy Lee sold her house last summer in Aventura, halfway between Miami and Fort Lauderdale, it wasn’t because she was worried about sea-level rise, rising insurance costs, nuisance impacts or any of the other risks associated with climate change. Rather, she worried those risks would soon push other people to sell their homes, crashing the region’s property values. So she decided to pull the trigger
“I didn’t want to be there when prices fell,” said Lee, an environmental writer.
Ross Hancock has the same worry, and sold his four-bedroom house in Coral Gables three years ago. He described South Florida’s real estate market as “pessimists selling to optimists,” and said he wanted to cash out while the latter still outnumbered the former.
“I was just worried about my life’s savings,” Hancock said. “You can’t fight Mother Nature.”
A short drive through mangrove trees off Highway 1 in Key Largo, Stephanie Russo’s house backs onto a canal that opens into Blackwater Sound, and from there to the ocean; her neighbors lounge in shorts and flip-flops beside their boats.
A few months after Russo, a partner at a law firm in Miami, moved to Key Largo in 2015, the big fall tides brought 18 inches of water onto the road in front of their house. Unlike previous tidal floods, this one lasted 34 days.
“When we bought, there hadn’t been a flood like that for years,” said Russo, who was sitting at a table between the home’s outdoor bar and its pool.
“Ever,” interjected her husband Frank, who was working on the grill.
The saltwater ruined cars around the neighborhood, destroyed landscaping and sparked a mosquito infestation.
But the worst part might have been the trash.
“When people would drive, it creates a wake,” said Russo. “That knocks over all the garbage cans, and then everybody’s garbage is floating in the streets, and in the mangroves. It’s just disgusting.”
Officials in Monroe County agree there’s a problem, and plan to raise some roads in an attempt to reduce future flooding.
Russo says if she knew in 2015 what she knows now, she wouldn’t have purchased the house. People buying in her neighborhood today are probably just as clueless as she once was, she guesses. “I would bet money that the realtors are not telling them.”

David Fuller's view
Apparently see levels in South Florida are approximately four inches higher than in 1992.  That is certainly a concern and a possible trend.  However, I would take the National Oceanic and Atmospheric Administration’s prediction that sea levels near Miami will be three feet higher by 2016 with a grain of salt.  It is impossible to know.  However, the economic consequences of people voting with their feet right now are certainly an economic concern, as the article explains.
My grumpy old man comment: look at those huge ugly apartment buildings which are completely ruining the coastline.  It looks like a scene from urban China.
When I was a teenager, the Fuller family enjoyed a couple of Christmas holidays at Pompano Beach, not far from Miami in Florida but without the vulgarity.  Pompano was nice and quiet, with people mostly living in one story houses with decent gardens and a few swimming pools.  The occasional hotels were small.  The breach was never crowded.  There was nothing special about the food but I do recall an - “All you can eat for a dollar” – fried chicken restaurant which appealed to me after a good swim.



Fri, 21 Apr 2017 08:20:00 +0100
Trump trade back on? FTSE 100 Index called to open +10pts at 7130, having extended its bounce from 2017 lows of 7090 to reinforce long-term support and clear yesterday’s resistance hurdle of 7125. Rising lows support since the US close bode well for a challenge on Wednesday’s 7150 highs that could open the door for a rally back to 7250. Bulls are looking for a break above overnight highs of 7133.5; Bears want to see overnight rising lows support give way at 7125. Watch levels: Bullish 7135, Bearish 7120.

Calls for a positive open come courtesy of a strong finish on Wall St that gathered momentum overnight. A move by Trump to challenge steel imports and positive tax reform rhetoric from Treasury secretary Mnuchin revived hopes for the fabled Trump ‘reflation trade’, while oil holding firm and rebounds for Copper and Iron Ore have helped boost sentiment towards the commodity sector. Markets have also taken in their stride another terror attack in the French capital just days before Sunday’s first round of the Presidential election.

Japan’s Nikkei outperforms  thanks to the Yen returning towards yesterday’s lows versus the USD after dovish comments from BoJ Governor Kuroda (keep accommodative policy) and the Trump and Mnuchin comments kept the Dollar bid. Australia’s ASX is positive, albeit less so, as oil finds stability to buoy Energy and Mining and Iron Ore and Copper rebound. Chinese shares, however, look headed for their worst week of the year on increased regulatory scrutiny and a crackdown on leveraged trading.

US equity markets closed sharply higher as the Trump administration signalled it was looking into possible tariffs on steel imports, Treasury Secretary Mnuchin suggested major tax reform was close and Q1 earnings remained in focus. The Tech-focused Nasdaq was the biggest beneficiary of the economic chatter yesterday, closing 0.9% stronger, while American Express closed up 6% after strong Q1 results, helping the Dow Jones to climb over 170pts, and a range of other corporate results lifted the S&P 0.8% higher.

Crude Oil prices are virtually unchanged overnight despite the Trump tariff-inspired jump in the wider commodities space. Both Brent and US crude remain in tight ranges following Wednesday’s sell off in reaction to rising US production levels (Brent $52.90-$53.20; US $50.50-$50.90), putting even greater impetus on this evening’s Baker Hughes Rig Count. Will the US production metric post its 14th consecutive weekly increase?

Gold has traded sideways overnight as the French terror attack failed to entice safe haven demand, while a stronger US dollar on account of the Trump administration’s protectionist measures and tax reform kept a ceiling of $1284 on the precious metal. Further US dollar strength would likely see the yellow metal test $1277 support, while further reflation trade doubts could see a test of aforementioned resistance for a return to 5-month highs.

In focus today will be the build up to this weekend's first round of the French Presidential election and all the potential outcomes, especially in light of last night’s Parisian shooting and its impact on undecided voters.

A Macron (centrist) & Fillon (centre-right) win would likely be the most palatable for financial markets. A Le Pen (far right) & Mélenchon (far left) result would surely raise alarms. Markets look to be pricing in something between the two with Macron & Le Pen progressing to the second round in a fortnight’s time, although the last year of global political events has taught us to expect the unexpected.

Data-wise, Eurozone and US PMI Manufacturing and Services are expected largely flat for their preliminary April readings while UK Retail Sales may show a 3-month rebound coming to an end, falling back into contraction following last month’s upside surprise. US Existing Home Sales are expected to show recovery after last month’s drop.

Speakers include ECB President Draghi and colleague Cœuré, participating in the 2017 Spring Meetings of the World Bank Group and the International Monetary Fund in Washington. The Bank of England’s Saunders (12.45pm) talks to the UK Federation of Small Businesses (FSB) while the Fed’s Kashkari (2.30pm) takes part in a Q&A on “the state of the economy, the role local community developers play in our financial health, and what lies ahead for community development corporations”

Fri, 21 Apr 2017 08:19:00 +0100
VSA Capital Market Movers - Goldplat Goldplat (LON:GDP)
Goldplat has announced an operational update for Q3 FY 2017 and reiterated its targets for the full year. Production of 6.7koz in the quarter was down 45% QoQ and 7% YoY, however, this is largely due to a delay in the receipt of processing material in Ghana. Indeed, on a nine month basis, production of 28koz which is up 14% YoY is on track to meet the target of 45koz for group FY 2017 production.

In Ghana 803oz was produced with 5.5koz sold. The discrepancy between gold sold and produced had been expected due to an outstanding license which was received towards the end of Q2 FY 2017. However, this difference was exacerbated by a delay in the receipt of material for processing which negatively impacted production in Q3. Production in Ghana had been expected to be lower in H2 versus H1, however, and with the arrival of the first shipment of material from South America we expect a more normalised production level in the final quarter. Capital projects in Ghana are progressing on target, including the construction of the additional 4t elution column.

The South African operations delivered a robust performance with 5koz produced, up 2% YoY although down 30% QoQ due to a particularly strong prior quarter. Following the recent announcement regarding the legal proceedings with Rand Refinery, GDP has confirmed that it has identified an alternative refinery as well as Aurubis in Germany where shipments can be processed meaning it has largely mitigated the associated operational risk.

At Kilimapesa the ramp up is performing well with quarterly production of 964oz up 70% QoQ and 92% YoY. Stage Two is expected to be completed by the end of April 2017 with the crusher installed by the end of May 2017.

Overall, we remain positive on GDP’s operational performance and our forecasts remain unchanged.

We reiterate our Buy recommendation and 11.2p/sh. target price.

Fri, 21 Apr 2017 08:18:00 +0100
Corero puts a shine on the battered "Bombed Out but Bouncing Back" portfolio Thu, 20 Apr 2017 15:12:00 +0100 Oil price, Amerisur, Jersey Oil & Gas, Thalassa, Echo Energy. And finally... WTI $50.44 -$1.97, Brent $52.93 -$1.96, Diff -$2.49 +1c, NG $3.18 +4c

Oil price

A bit of a tumble for crude yesterday which was mainly down to the EIA inventory stats. Whilst crude drew 1m barrels which was close enough to the whisper, it was the gasoline numbers which showed a build of 1.5m barrels that put the cat amongst the pigeons, a draw of 1.9m b’s was forecast. With a rise of 1.9% to 92.9% refinery rates were indeed high but no more than can be expected given that we are only about a month away from the start of the driving season. Interestingly, distillates drew by 2m barrels showing that the product markets are in a bit of a quandary.

Amerisur Resources

The good news from AMER just keeps on coming and today’s announcement is no exception. The well on Platanillo-22 has flow tested at 613 bopd ‘materially’ in excess of the pre-drill estimates of 300-400 b/d. (it was also slightly better crude at 31.5º API than the main Platanillo field) The crude is already on production and is being trucked the short distance to the OBA pipeline. It gets better, it seems that PAD 2N is a separate closure to the PAD 3N and the greater Platanillo field and the oil/water contact is deeper than the main field.

Accordingly, the PAD 2N recoverable reserves are now calculated at 7.82mmbo up from 1.4m and with the rig now mobilising to drill Platanillo-21 from PAD 2N more good news might be around the corner. The shares are up 7% on the news but at 22.5p are still significantly undervalued.

Jersey Oil & Gas

Results today from JOG and like all results they are history and more so as it is a company with all in front of it. New news since the period end is that mean prospective recoverable resources are at 162 mmboe up from 118m and the COS is up to 29%. With the various carries, the company is fully funded for the drilling programme and it is still out there looking to buy some production. The shares which are in the bucket list, have been strong this year as the market prices in the chance of a success at Verbier, with the ‘lucky’ Transocean Spitsbergen on their  side, the next few months promise to be an interesting ride.

Thalassa Holdings

After yesterday’s  announcement I picked up the phone this morning to Duncan Soukup to try and catch up on what exactly is going on. Always a refreshingly honest and intelligent view on the oil market is forthcoming and today was no exception. There are discussions ongoing about a potential sale of either WGP Group or ARL although I get the feeling that DS wouldnt shed a tear if nothing were to come of it. The company has a terrific record at the moment with activity in most key areas of the North Sea which gives predictable cash flow and of course ARL has potential across a much broader bunch of sectors than just oil  and gas. Always an interesting ride, whatever happens to THAL you know that it is in good hands.

Echo Energy

I attended the EE strategy launch on Tuesday but most of the presentation had been in the announcement that I wrote about then. Briefly, the aim is for EE to become a mid-Cap Latin American exploration company focusing on a regional gas strategy in certain key markets. Initially the suggestion  regarding countries appears to centre on Bolivia, Brazil and Colombia but nowhere has been ruled out as many potential deals are clearly being evaluated.

The question on everybody’s lips was whether, with its similar management and cornerstone investor, Echo is going to be another Sound? There is no doubt that as they describe it ‘the DNA is cloned from Sound Energy’ with its technical focus, and gas based agenda similarities will be clear. Greg Coleman stays on as CEO from IRG and he has experience in the region as do other members of the board coming over from SOU as non-execs. Chairman James Parsons has spent a long time in Brazil and Stephen Whyte has long time regional experience with Galp, BG and Shell. Also on the board is Marco Fumagalli who is the Founding Partner of Continental Partners who cornerstoned Sound and is performing the same task here. Expect more directorial and operational appointments as the company looks to open its first regional office, probably in Bolivia.

And finally…

The Lions touring side for the summer has been announced and as one might expect contains plenty of surprises. To look at it one could hardly guess that Wales came 5th out of 6 in the 6 Nations Championship this spring, only above Italy who were to be frank, only making up the numbers. Former Wales coach Gatland has certainly looked after his own…

No luck for Barca last night who couldnt score in either leg and went out to a highly organised Juve whilst Monaco also progressed and look likely to score all the time. Tonight the Red Devils host Anderlecht in the Boropa Cup, maybe the only way in the CL next year…

Thu, 20 Apr 2017 13:27:00 +0100
Today's Market View - ASA Resource Group, Atalaya Mining, Caledonia Mining, IronRidge Resources and Shanta Gold ASA Resource Group* (LON:ASA) 1.3p, Mkt Cap £22m – Scott Morrison buys stock in company
Atalaya Mining  (LON:ATYM) 143 pence, Mkt Cap £167m – Q1 Results and update
Caledonia Mining (LON:CMCL) 111 pence, Mkt Cap £58m – Q1 gold production increases by 18% at Blanket.
IronRidge Resources* (LON:IRR) price 43p, Mkt Cap £101m – Confirms exploration partnership in Ivory Coast
Ortac Resources* (LON:OTC) 4.4p, mkt cap £3.6m – Joint-venture to develop the Sturec project
(Ortac recently consolidated their shares by 100:1)
Shanta Gold (LON:SHG) 8.9p, Mkt Cap £51.7m – Strong Q4 operational results.  Underground development on target

121 Mining Investment conference – sponsored by SP Angel - 10–11 May 2017
• The 121 team are running the London 121 Mining Investment conference at No 8 Fenchurch Street in The City on 10-11 May.
• The event is for registered investment professionals, mining and exploration companies and mining analysts and brings the industry together alongside a series of investor briefings.
• 65 quality producers, developers and explorers attending / presenting
• I’m talking at 3:00 on the Thursday on:  ‘UK mining outlook - A new era of UK funded exploration and production’.
• Follow link for investor passes -

Dow Jones Industrials  -0.55% at 20,523
Nikkei 225   +0.07% at 18,432 
HK Hang Seng   -0.38% at 23,833 
Shanghai Composite    -0.81% at 3,171 
FTSE 350 Mining   +0.72% at 14,916
AIM Basic Resources   -0.35% at 2,729 

Economic News
US$1.0742/eur vs 1.0726/eur yesterday.   Yen 108.97/$ vs 108.86/$.   SAr 13.237/$ vs 13.352/$.   $1.283/gbp vs $1.284/gbp.
0.752/aud vs 0.751/aud.   CNY 6.885/$ vs 6.884/$.

Commodity News

Precious metals:
Gold US$1,280/oz vs US$1,284/oz yesterday
   Gold ETFs 59.7moz vs US$59.7moz yesterday
Platinum US$970/oz vs US$977/oz yesterday
Palladium US$785/oz vs US$777/oz yesterday
Silver US$18.17/oz vs US$18.21/oz yesterday
Base metals:   

Copper US$ 5,605/t vs US$5,647/t yesterday
Aluminium US$ 1,929/t vs US$1,907/t yesterday
Nickel US$ 9,465/t vs US$9,435/t yesterday
Zinc US$ 2,602/t vs US$2,541/t yesterday
Lead US$ 2,162/t vs US$2,138/t yesterday
Tin US$ 19,870/t vs US$19,700/t yesterday

Oil US$53.2/bbl vs US$54.9/bbl yesterday
Natural Gas US$3.191/mmbtu vs US$3.151/mmbtu yesterday
Uranium US$23.00/lb vs US$23.25/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$62.9/t vs US$63.2/t
Chinese steel rebar 25mm US$504.0/t vs US$504.8/t
Thermal coal (1st year forward cif ARA) US$66.8/t vs US$66.3/t yesterday
Premium hard coking coal Aus fob US$302.0/t vs US$312.4/t


Tungsten - APT European prices $205-215/mtu vs $205-215/mtu

Company News
ASA Resource Group* (LON:ASA) 1.3p, Mkt Cap £22m – Scott Morrison buys stock in company
• Scott Morrison, the senior independent non-executive director has bought £4,909 worth of stock in Asa Resource.
• The purchase is a signal to us that Morrison is deemed to be in possession of no further inside information and that all material news on the missing $4.3m is now in the public domain.
• It appears that the non-executive directors have acted decisively to expose and limit the impact of the missing funds.
• Morrison’s share purchase is a further signal to us that the financial condition of the company should improve from here.
• The auditors, Ernst & Young are to undertake further investigation and it will be interesting to see if there is any restatement of the FY 2016 and H1 2017 figures.
Conclusion:   We have previously forecast a marked turnaround in the fortunes of ASA Resource Group as indicated by management driven and predicated on higher gold production and lower operating and management costs within the group.  We will review our figures in the light of this week’s announcement’s though the revelation of unexplained fund transfers may not have much impact on the operation of the underlying business and our forecasts.
*SP Angel acts as Nomad and broker to ASA Resources and its analysts have visited ASA’s Bindura Nickel, Freda Rebecca and Zani Kodo assets.

Atalaya Mining  (LON:ATYM) 143 pence, Mkt Cap £167m – Q1 Results and update
• Atalaya Mining reports increased Q1 copper production and reduced costs from its Proyecto RioTinto operation is Spain
• Commenting on the results, CEO, Alberto Lavandeira, noted that “since reaching nameplate capacity at Riotinto at the end of 2016, the plant continues to run smoothly and we are on track to meet our production targets”.
• Quarterly production of 8,805 tonnes of copper at a cash cost of US$1.83/lb (all-in cost of US$2.15/lb) compares favourably with the 4,048 tonnes of production at a cash cost of US$2.28/lb ($2.25/lb all-in cost) achieved in Q1 2016 when the mine was in ramp-up phase, and also with the Q4 2016 result of 8,938 tonnes of production at US41.95/lb ($2.15/lb all-in cost).
• The company is maintaining its 2017 production guidance of 34-40,000 tonnes of copper production at cash costs of US41.90-2.10/lb.
• During the construction, commissioning and ramp-up phases of Proyecto Riotinto, the company’s attention to detail and engineering fundamentals allowed an apparently trouble free production build up and we note that the same approach appears to prevail during operations as “Adjustments to geological modelling are currently under evaluation to improve mine-to-mill efficiencies. Drilling and blasting parameters have been adjusted to improve fragmentation, loading rates and crushing capacity.”
• At the recently acquired Touro project in north-west Spain, where the company has the right to increase its initial 10% interest up to 80% in stages, the permitting process is underway and a 7,900m infill and step-out drilling campaign is progressing using two reverse-circulation and one diamond coring rig. “Resource modelling is well advanced … [and] … Metallurgical test work at feasibility study level was completed during 2016”.
• Basic engineering at Touro “is progressing with a view to completing a capital and operating cost estimate as part of the study. Long-lead items have been identified together with suppliers’ quotations.”
Conclusion: Atalya’s Riotinto project appears to be bedding down well and on track to meet 2017 guidance targets. The new project at Touro is advancing through the technical and permitting study phases and we look forward to further news as the work-streams come together.

Caledonia Mining (LON:CMCL) 111 pence, Mkt Cap £58m – Q1 gold production increases by 18% at Blanket.
• Caledonia Mining has announced an 18% year-on-year increase in Q1 gold production to 12,794 oz at its 49% owned Blanket gold mine in Zimbabwe.
• Although production was 6% below the record achieved in the previous quarter, the company notes that “This trend is in line with the historical quarterly production profile at Blanket which typically experiences slightly lower production rates in the first quarter of the year due to holidays and mine scheduling.”
• The result keeps the mine on course to achieve the long term target production of 80,000oz pa by 2021 and the company is maintaining its 2017 production guidance of approximately 60,000oz.
• Commenting on the result, Chief Executive, Steve Curtis, said “Production continues to be supported by access to resources below the 750m level through the development of a second secline into the AR Main ore body as well as though the current decline at AR South and through the 6 Winze shaft.”
• The company reports a cash balance of US$14.3m as at 31st December 2016.
Conclusion: Caledonia Mining remains on course in the delivery of its strategic plan to secure the long term future of the Blanket mine through developing the deeper level resources below the 750m level.

IronRidge Resources* (LON:IRR) price 43p, Mkt Cap £101m – Confirms exploration partnership in Ivory Coast
• IronRidge Resources reports that, following a technical due diligence programme, it has now confirmed the previously announced exploration partnership with Eburnea Gold Resources and Kestrel Mining Exploration over the Marahui, Kineta and Bouna licence applications in the north-east of Ivory Coast.
• The licence areas cover 75 km of a prospective north-south trending gold bearing shear zone along strike from Centamin’s 3.3moz Konkera deposit and Azumah’s 2.2moz Wa-Lawra deposit.
• The due-diligence work included the recovery of 199 soil samples, 67 rock-chip samples and 37 auger drill samples and targeted “prospective structural settings and/or areas of artisanal workings.”
• The results included “Highly anomalous rock chip assay results including 35.1g/t, 32g/t,27.4g/t and 27.3g/t gold” over an area measuring 400m x 100m within the Marahui licence. The company identifies an area of contact between granites and metamorphosed sediments as a high priority target for future exploration although in conjunction with its joint venture partner it “will now lobby the Ministry of Mines to convert the application areas to granted mineral exploration licences prior to commencement of field programmes.”
• The agreements with Eburnea Gold and Kestrel Mining Exploration allow IronRidge to “acquire up to 100% of the projects through staged earn in arrangements and expenditure to Feasibility Study subject to each company retaining and NSR of 2.5% of which 40% may be acquired for US$3 million at any time.”
Conclusion: The confirmation of IronRidge’s agreements over the Marahui, Kineta and Bouna licence application areas underlines the company’s commitment to exploration in Ivory Coast where earlier this week it announced another, similar transaction on the Vavoua South licence in the west of the country. The decision to defer field programmes on the licence areas until the applications are confirmed as granted seems prudent and although the results so far are largely from very early stage rock-chip and soil sampling programmes, the results have been encouraging and the structural setting along strike from substantial discoveries by other companies underline the prospectivity of the targets.

Ortac Resources* (LON:OTC) 4.4p, mkt cap £3.6m – Joint-venture to develop the Sturec project
(Ortac recently consolidated their shares by 100:1)
• Ortac Resources reports that it has reached an agreement “to form a joint venture with a Slovakian company to jointly develop the Sturec Gold Project at Kremnica.”
• The company comments that “Further details of the joint venture agreement will be published when it has been formalised in a legally binding contract.”
• The 900,000 oz Sturec project has been stalled for some time as a result of permitting issues related to historic mine workings beneath the town. These were reconciled late last year and the licence was re-issued in an amended form in March this year. Today’s announcement comments that “the process for final validation of the underground mining licence as announced on 17 March 2017 continues on track.”
• Concerns were also expressed in the past over the proposed use of cyanide in the gold processing circuit and the company conducted tests on the use of an alternative thiosulphate reagent which delivered gold recoveries of over 90% and around 50% for silver.
• A 2015 review of the original 2013 pre-feasibility study conducted by SRK identified capital and operating cost savings of around 3-5% which deliver a project IRR of 23% and an NPV of $111m at a discount rate of 8% using a $1200/oz gold price assumption. At the time, capex was estimated at around US$120m to produce approximately 70,000oz of gold per year at a cash cost of approximately US$550/oz.
Conclusion: The agreement with a local company for the joint development of the Sturec project looks as if it could reinvigorate the project which had encountered delays over permitting and aspects of the proposed treatment process.
*SP Angel acts as broker to Ortac Resources

Shanta Gold (LON:SHG) 8.9p, Mkt Cap £51.7m – Strong Q4 operational results.  Underground development on target
BUY – 12.2p
• Shanta Gold report strong operational results with better than expected Q4 ’16 gold production though this is offset with lower expectations for Q2 ’17.
• Quarterly gold production came in at 20.4koz (Q4/16: 18.9koz) with the processing plant operating at full capacity and treating 151kt at 4.6g/t (Q4/16: 152kt at 4.3g/t).
• Gold recoveries hit record 92%, in line with the revised mine plan which is good news from a cost and gold production perspective.
• Operating (C1) and all-in sustaining (AISC) cash costs averaged $553/oz and $768/oz, respectively (Q4/16: $486/oz and $747/oz).
• Gold sales totalled 23.3koz in the quarter (Q4/16: 15.3koz) with the gold sold at an average gold price $1,249/oz (Q4/16: $1,219/oz).
• Cash generated from operations was boosted by a $3m drop in working capital to $9.5m with $9.9m spent in capex, most of which invested in underground development.
• The government is reported to have not returned any VAT during the quarter with the total amount currently outstanding of $12m.
• The Company said it remains in discussions regarding VAT rebates with the last payment reported to have been received was for Apr/16.
• Given delays in VAT refunds, the Company has deferred non-essential capex which includes Singida Pilot Mining Project, exploration drilling and community projects.
• The closing quarterly cash balance stood at $11.7m (Q4/16: 15.0m)
• Net debt rose slightly to $44.5m (Q4/16: $42.9m) elevated by the late $12m VAT rebate from the government.
• Underground development remains on schedule for commercial production start-up at Bauhinia Creek in Q2/17.
• Shanta extracted 15.7kt of underground ore grading 10.6g/t as part of its development work through the quarter.
• Maiden resource on the recently discovered mineralised zone at the Nkuluwusi target in Q2/17.
• 2017 gold production and costs guidance reiterated at 80-85koz and $800-850/oz (AISC), respectively.
Conclusion:  This looks like a good quarterly operations update highlighting the on target underground development works with annual production and costs guidance intact. Given the transition nature of Q2/17 as the underground operations at Bauhinia Creek launch commercial production, Q2/17 gold production is guided to be the weakest this year before mining ramps up and starts to deliver high grade tonnages through the remainder of the year. With Q1/17 production beating our estimates for 16.4koz, we expect Q2/17 to come in below our 18.4koz estimates, thus, normalising the total for H1/17.  Our earnings estimates remain unchanged.
We note that the problem in rebating outstanding VAT payments from the local government which restricts cash in working capital and looks like a national problem. Acacia Mining reported this morning that they have “incurred approximately $25m in VAT outflows and received no VAT refunds…(with) our total indirect tax receivables increased from $136m to $152m during the quarter”.  Shanta management remain in close contact with the authorities and we hope the government will resolve the issue in due course.

Thu, 20 Apr 2017 10:36:00 +0100
In The News - Plateau Uranium In the news: Plateau Uranium

The announcement from Plateau Uranium – see below – that it has signed an LoI for offtake at $42/lb is a positive, but also a seemingly rare piece of news out of the uranium sector. In late March, Donald Trump signed an executive order designed to reform the previous administrations energy policy. Most of the headlines concern coal where Trump has been prominent in arguing for a return to coal mining, and the impact that would have on jobs in regions where he received strong support in the election. Clearly, Obama was allergic to mining of any type, but there are concerns that the US Energy mix has become too narrow. With America needing more and more energy with the advent of electric cars, these concerns are valid. However, the executive order is also being picked up on by the Uranium industry as well. Trumps order is, in essence, an energy independence policy so you can see the excitement. Earlier this week, the Uranium Producers of America called upon the US Department of Energy to halt the transfer of Federal uranium into the spot market until the spot price moves back up above US$35/lb. While selling US stockpiles at spot strikes me as being akin to Gordon Brown selling the UK’s gold reserves at an historic low, you can sense that the UPA’s call will not fall on deaf ears this time around.


CVE:PLU | C$0.58 | US$24m

Agrees to negotiate first offtake agreement for future production from Macusani uranium project over next 12 months
Plateau Uranium has signed a non-binding, non-exclusive, Letter of Intent for initial uranium offtake from its Macusani Uranium/Lithium Project in south-eastern Peru. Indicative terms consider the delivery of 2Mlb of U3O8 over 5 years at an average price of US$42/lb. The contract is expected to include elements of both fixed and market-related pricing. The company and Curzon (formerly Interalloys), a European commodity based trading company, have agreed to work towards negotiating a possible uranium offtake agreement over the next 12 months.
COMMENT: Although further work is required to finalise the terms of any offtake agreement as outlined in the letter of intent, this announcement indicates that the company is moving forward to put in place the contracts that are likely to be required in order to finance the project’s development.
Having completed a positive updated PEA on the project in January 2016, the company is now working towards the completion of a PFS in 2017. The scope of the PFS is for a combined underground and open pit mining operation allied to a tank leaching facility, which would not only provide for the recovery of uranium, but also would allow, subject to further test work, the production of lithium, which is also present in a number of the deposits. We also await the results of further drilling to test the extent of the high grade Pinocho area of the Kihitian Complex.
The company is also working with the authorities in Peru in order to develop the permitting regulations that will be required for the development of what could be Peru’s first uranium mine. It also has a number of local community programs underway and is working to complete the Environmental Impact Study that will be submitted together with a BFS as part of the mining license application that the company plans to submit in 2018.
Updated Preliminary Economic Assessment (PEA) completed in January 2016 on 61Mlb U3O8 mining inventory — Plateau Mining completed an updated PEA on its Macusani Project in January 2016. The study focused on the development of the Kihitian, Colibri and Isivilla complexes, which contain 114Mlb of the project’s total 124Mlb resources. The total mining inventory was 61Mlb U3O8 at an average grade of 289ppm. Heap leaching and tank leaching options were evaluated. The tank leach option has the potential advantage of decreased plant footprint and increased uranium recovery (93% vs. 88%), and also entails a higher level of confidence in upscaling from test-work to operating conditions, although the heap leach option demonstrated more favourable economics. The study showed that the inclusion of high-grade underground material from the Kihitian deposit is accretive to economics.
PEA of January 2016 base case considered open pit and underground mining combined with heap leaching to produce 6.1Mlb pa U3O8 at AISC of US$18.26/lb and initial capex of US$300m - The Base Case open pit and underground mining options combined with heap leach processing generated average LoM production of 6.1Mlb pa U3O8 over a mine life of ten years, with an initial capital cost of US$300m. Assuming a uranium price of US$50/lb, the resulting post-tax NPV8 was US$603m, the IRR 41% and the payback period 1.8 years. The sub-US$20/lb operating costs are in the first quartile and are in line with Kazakh ISR projects, whilst at US$49/lb pa of annual capacity, and US$4.90/lb U3O8 recovered over the LoM, capital intensity remains competitive with conventional uranium projects.
Prefeasibility Study (PFS) planned for completion later in 2017 likely to involve tank leach processing and to include trade-offs relating to potential for pre-concentration, lithium production and addition of high grade uranium at Pinocho — Since the completion of the Updated PEA, there have been a number of developments that may lead to changes in the scope of the project.
• In March 2016 the company announced that its resource base also contained 176,000t of lithium oxide at a grade of 0.12% Li2O. Recent test-work has indicated that 61-73% of the contained lithium can be leached into solution using sulphuric acid at moderate temperatures of 65-85°C. Further work is planned to confirm the leaching performance and to test the performance of the minerals in the subsequent precipitation stage to establish overall recovery and cost information. Work is also being conducted to establish whether the lithium mineralisation is co-incident with the uranium mineralisation. Recovery of lithium would require the use of tank, rather than heap, leaching as the processing route.
• The company is investigating the potential to upgrade the plant feed by removing barren material contained in the coarse fractions, to improve project economics. In August 2016, the company announced that historic test-work on the material from a number of the deposits had indicated that it was possible to upgrade the uranium grade by 60% with a recovery of 80% by removing a coarse fraction. Work is planned to be done on a number of deposits and also to test what impact the upgrading had on lithium grades.
• Late in March 2017, the company announced drill results from the Pinocho area, which is part of the Kihitian Complex. Assay results from two drill holes confirmed high grade uranium mineralisation that had been identified in underground channel sampling in 2009. Hole PT-PCH1-TNE showed 8m grading 861ppm U from 53m, including 3m grading 2,160ppm U from 53m. Both of these intervals are much higher than the overall resource of 228ppm U in the Indicated category and 240ppm U in Inferred. High grades were also observed in Hole PT-PCH1-TNW, which showed 9m grading 566ppm U from 53m, including 2m grading 2,182ppm U from 53m. Both of these results were from the same platform (PCH1).

Thu, 20 Apr 2017 10:23:00 +0100
Breakfast News -AIM Breakfast : Ortac Resources, Anglo African Oil & Gas, Braveheart Investment Group, Action Hotels Set menu AIM:

Total number of AIM Companies (Incl Susp):


Total number of AIM Companies trading:


*as at close of business  19 April 2017

Set menu NEX Growth:

Total number of NEX Growth Market Companies (Incl Susp):


Total number of NEX Growth Market Companies trading:


*as at close of business  19 April 2017

Dish of the day

No NEX Growth Market Joiners Today

Off the menu

No NEX Growth Market Leavers Today

What’s cooking in the IPO kitchen?

Global Ports Holding—Intention to float on Standard List.  International cruise ports operator. Seeking $250m raise including $75m primary offer.

Dorcaster—Schedule One Update. Admission now expected  3 May. RTO of Escape Hunt raising £14m at 135p

Verditek— Intention to float on AIM. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Raising £3.5m. Admission in May.

Eddie Stobart Logistics— Schedule 1 update. Admission expected 25 April raising £122m.

ADES International Holding— Intends to join the Standard List in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. Admission expected in May.

Tufton Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.

Breakfast buffet

Ortac Resources (LON:OTC) 3.13p £2.57m

The mineral exploration company operating in Europe and Africa, entered into an agreement to form a joint venture with a Slovakian company to jointly develop the Sturec Gold Project at Kremnica.  The Sturec project has a reserve of just under 900,000 oz gold equivalent which has progressed to pre-feasibility stage. Meanwhile the process for final validation of the underground mining license as announced on 17 March 2017 continues on track. 


Anglo African Oil & Gas (AAOG.L) 27.5p £14.62m

The independent oil and gas developer, has agreed terms to contract the wireline and ancillary equipment for the workover that is intended to undertake the reperforation and acidisation of the R2 reservoir in well TLP-102. The objective of this workover is to bring this well into production at a rate of up to 100 barrels of oil per day. The equipment is anticipated to arrive at the Tilapia field and commence operations on 8 May 2017. The Company will make further announcements in due course, including as to the results of this workover and plans for the workover of TLP-101 and drilling of the new well, TLP-103. 

Braveheart Investment Group (LON:BRH) 15p £4.06m

Trading update from the fund management and strategic investor group. The Group has continued to perform in line with the January 2017 trading update and, as a consequence, the Directors expect that profit before and after taxation for the y/ e March17 will be c. £750k.  As opportunities have arisen, the Group has continued to invest in its strategic investment portfolio and has resulted in an increase its percentage holding in Kirkstall from 28 per cent. to 37 per cent. and following the purchase of existing shares and the provision of a convertible loan to Paraytec, the Group's interest would increase, on conversion, from 33 per cent. to 47 per cent. "We are pleased with our progress over the past year and have cash on our balance sheet available for further investment opportunities over the coming months."

Cluff Natural Resources(LON:CLNR) 2.65p £8.73m

The natural resources investing company  announced results of an independent Scoping Study covering two prospects on its 100% owned Licence P2248 in the Southern North Sea gas basin, which has seen a significant pick-up in operational and corporate activity. Post drill Expected Monetary Value ('EMV') following a discovery for Cadence & Basset of £86.6m & £69m respectively. Implied extrapolated un-risked NPV for the 6 identified prospects on Licence P2248 of £697m. ‘Should exploration wells prove commercial quantities of gas in line with expectations, then the Scoping Study economics demonstrate that cost effective development options are readily available, a key consideration for any operator or investor looking at the Company's exploration assets.’

Walker Greenbank (LON:WGB) 213.5p £149.5m

Thee luxury interior furnishings group, announces has received a further interim insurance payment of £1.5 million following the flood in December 2015 at Standfast & Barracks, the Company's fabric printing factory in Lancaster. In total, £16.9 million of flood-related insurance payments have now been received by the Company in respect of damage to business assets and loss of profits. With the factory having been back in full production for some time and the Company's Milton Keynes warehouse being fully stocked with printed textiles, the Company will be seeking to negotiate a final settlement of the insurance claim with its insurers. It is expected that a settlement will be agreed during the first half of the current financial year. FY Jan 18 rev £122.2m PBT £14.2m.

Modern Water (LON:MWG) 9.88p £7.85m

The owner of world-leading technologies for water and wastewater treatment and for water quality monitoring, has secured a sale of its proprietary Forward Osmosis ("FO") technology for seawater desalination to Hangzhou Water in China. The Company will license its patented FO technology and provide its extensive engineering know-how to Hangzhou Water, for use in a new 500m3/day seawater desalination plant, to be built at the Shengsi Seawater Desalination Base on Sijiao Island. Modern Water will receive licence fees in the short term; and commissioning fees for supervising commissioning of the plant; as well as selling Hangzhou Water specialised equipment and spares on a long term basis. Expected plant completion early 2018.

Paragon Entertainment (LON:PEL) 5.12p £9.62m

FYDec16 results from the attractions design, production and fit-out business. Revenue +70% to £14.4m. Gross profit up 91% to £3.8m. Ebitda of £1.19m vs  £0.24m.  Earnings down to £0.31m from £0.6m following a goodwill write down. Net cash of £1.2m from a £0.2m deficit. ‘In 2017, we expect that £7 million of our turnover will come from repeat partnership business, amounting to approximately 45% of our revenue guidance of £15.7 million for 2017 and we anticipate our work to have the following geographical split: 20% UK, 10% Europe, 65% MENA and 5% China.’


Action Hotels (LON:AHCG) 46p £67.91m

FYDec16 trading update from g owner, developer, and asset manager of branded three and four-star hotels in the Middle East and Australia. The Company expects to report total revenue increased by c.22% to approximately $53.1m adjusted EBITDA + c.16% to approximately $18.5m and the value of Action Hotels' hotel assets increased by c.15% to approximately $458m. As is typical in many development companies, Experienced some unforeseen delays in opening dates of some of its new hotels and this has negatively impacted revenue resulting in a level that is materially below market expectations. Divi to remain in line. Trading in Q1 2017 is solid with total revenue up c.14% over the same period last year.


Redx Pharma (LON:REDX) 35p £45.37m

The research and development company focused on cancer, immunology and infection,  has appointed  Iain Ross as Non-exec Chairman effective from 1st May. Mr Ross has over 35 years' of experience having held Senior Board and Management positions at multiple public and private companies in the life sciences sector. Currently Mr Ross serves as Non-Executive Chairman of AIM quoted e-Therapeutics plc and Biomer Technology Ltd alongside his Non-Executive Directorships at London listed Premier Veterinary Group plc, and ASX quoted Anatara Lifesciences Ltd and Novogen Ltd and as a Director of Aldershot Town Football Club.

Ebiquity (LON:EBQ) 115p £88.78m

The independent marketing and media analytics consultancy, has announced the launch of Portfolio Digital, a new digital ad intelligence platform designed to monitor online display advertising. The UK launch follows the successful release of Portfolio Digital in Australia. Portfolio Digital allows subscribers to track competitors' media strategy, messaging & tactics, including quantum and frequency of spending, how the ads appear in situ, and their position on the web pages where they appear. The platform includes a unique spend calculation model which provides an up to date estimation of actual expenditure.  To be followed by Europe & US launches. PE 11.4x.

Thu, 20 Apr 2017 09:32:00 +0100
Theresa May Wins Support from Parliament to Hold Early Election Theresa May Wins Support from Parliament to Hold Early Election
Here is the opening of this topical article from the Daily Mail:

LONDON, April 19 (Reuters) - Prime Minister Theresa May won parliament's backing for an early election on Wednesday, a vote she said would strengthen her hand in divorce talks with the European Union and help heal divisions in Britain.
May surprised allies and opponents on Tuesday when she announced her plan to bring forward an election that was not due until 2020, saying she needed to avoid a clash of priorities in the sensitive final stages of the two-year Brexit talks.
After addressing a rowdy session of the House of Commons, May won the support of 522 lawmakers in the 650-seat parliament for an election on June 8. Only 13 voted against.
With May seen winning a new five-year mandate and boosting her majority in parliament by perhaps 100 seats, the pound held close to six-and-a-half month highs on hopes she may be able to clinch a smoother, more phased departure from the EU and minimise damage to the UK economy.
"I believe that at this moment of enormous national significance there should be unity here in Westminster, not division," she said.
"A general election will provide the country with five years of strong and stable leadership to see us through the negotiations and ensure we are able to go on to make a success as a result, and that is crucial."
The former interior minister, who became prime minister without an election when her predecessor David Cameron quit after last year's referendum vote for Brexit, enjoys a runaway lead over the main opposition Labour Party in opinion polls.
She has also played up the strength of the economy, which has so far defied predictions of a slowdown - a key campaign theme that her Conservative Party will use to try to undermine Labour in the election.
A victory would give May a powerful mandate extending until 2022, long enough to cover the Brexit negotiations plus a possible transition period into new trading arrangements with the EU.

David Fuller's view
This was a bold, sensible move by Theresa May.  Initially, on taking over as Prime Minister following the Brexit vote, she did not wish to put the country through another General Election before full term.  However, Brexit remains inevitably controversial, albeit chosen by the UK electorate in the most democratic election that I have seen.
With a majority of only 17 seats, which she inherited from Cameron, Mrs May found herself harried, mainly by dissatisfied Remainers who would inevitably weaken her negotiating position with the EU. The political gamble (there is always an element of uncertainty) was to call for a General Election which will hopefully give her a substantial overall majority.
Today, Parliament voted to approve the election on 8th June. Subsequently, we now hear Westminster talk of a ragbag Coalition of mostly Labour, Liberal Democrats and Scottish Nationalists, hoping to defeat the Conservatives.  This would presumably be led by the reassuring hand of Jeremy Corbyn, with Nickola Sturgeon pulling the strings from behind. One would have to swallow hard before voting for that gaggle of has beens, incompetents and single-issue advocates.     


The French Rich Are Considering Exile If Melenchon Wins
Here is a middle section of this informative article from Bloomberg:

Melenchon strikes fear in the hearts of many wealthy voters who remember the early eighties, when Mitterrand ran with Communist backing and promised to nationalize banks. He won the election on May 10, 1981. Soviet tanks never did make it to Paris, but some of France’s wealthiest fled. LVMH Moet Hennessy Louis Vuitton SE’s billionaire Chief Executive Officer Bernard Arnault moved to the U.S. as did Nathaniel de Rothschild. Some others moved to Switzerland.
Melenchon wants to limit executive pay to 20 times that of the lowest-paid employee, ban companies from paying dividends if they’ve laid off workers for economic reasons, impose capital controls to fight tax fraud and expand the base of those paying the existing wealth tax.
“We’ve invented the universal tax,” Melenchon said in a speech in Dijon on Tuesday. “It’s not worth fleeing. There will be tax agents even in hell.”
Melenchon considers anyone earning more than 4,000 euros ($4,287) a month as “rich,” and would expect them to do more to further his aims for France. He would slap a 90 percent tax on anyone who makes more than 400,000 euros a year. He plans to make inheritance tax-free below 130,000 euros per child, compared with 100,000 euros now, but tax it more for higher amounts.
“We want to make those who can afford it pay more,” Manuel Bompard, his campaign chief of staff and son-in-law, said on La Chaine Parlementaire television on April 12. “There should be a cap on the accumulation of wealth in this country.”

David Fuller's view
London remains a very popular destination for educated French entrepreneurs, or indeed similarly qualified people from other EU countries.  We welcome you because you contribute to the diversity, charm and character of this great city.    


Markets Start to Ponder the $13 Trillion Gorilla in the Room
Here is the opening of this article from Bloomberg on a potentially challenging environment for investors as central banks eventually switch from quantitative easing to quantitative tightening:
After heading into the uncharted territory of quantitative easing, the world’s central banks are starting to plan their course through the uncharted waters of quantitative tightening.
How the Federal Reserve, European Central Bank and -- eventually -- the Bank of Japan handle the transition could make the difference between a global rerun of the 2013 "taper tantrum," or the near undetectable market response to China’s run-down of U.S. Treasuries in recent years. Combined, the balance sheets of the three now total about $13 trillion, equating to greater than either China’s or the euro region’s economy.
Former Fed Chair Ben S. Bernanke -- who triggered the 2013 sell-off in risk assets with his quip on tapering asset purchases -- has argued for a pre-set strategy to shrink the balance sheet. Current Vice Chairman Stanley Fischer says he doesn’t see a replay of the 2013 tantrum, but the best laid plans of central bankers would soon go awry if markets can’t digest the great unwinding.
"You know what they say about mountaineering right? The descent is always more dangerous than the ascent," said Stephen Jen, London-based chief executive of hedge fund Eurizon SLJ Capital Ltd. "Shrinking the balance sheet will be the descent."
Economists and investors are stepping up analysis of the implications of balance-sheet contraction after minutes of the Federal Open Market Committee meeting last month showed officials favor kicking off the process as soon as this year.

David Fuller's view
We could speculate and fret about this endlessly but I wouldn’t worry about it until US 10-Yr Treasury Yields sustain a clear break above 3%.

Email of the day 3
On William Hague’s article posted on Tuesday:
A perceptive essay, marred only by the third from last paragraph which is delusional. Turkey was always going to go its own way.

David Fuller's view
Since Erdogan is an Islamist leader who controversially became Prime Minister of Turkey in 2003, ending the country’s secular rule since the days of Ataturk, you may be right. However, I never thought the secular EU would accept open borders with Turkey and its large population, led by an Islamist government. Having not been invited to join the EU, Turkey is now going its own way.
(Subscribers may find this article from The Telegraph interesting: Turkey’s most powerful president since Ataturk: A profile of Recep Tayyip Erdogan)

Thu, 20 Apr 2017 08:43:00 +0100
VSA Capital Market Movers - Acacia Mining and Rio Tinto Acacia Mining (LON:ACA)
Acacia Mining  has announced strong results for Q1 2017 with gold production of 220koz up 15% YoY and 3% QoQ which with an average gold price of US$1,221/oz resulted in revenue of US$234m, up 6% YoY. Cash costs of US$577/oz were down 15% QoQ and 17% YoY resulting from stronger grades and recoveries. EBITDA therefore benefitted from stronger revenues and lower mining costs and consequently was up 25% YoY. ACA reversed a net loss in Q1 2016 of US$52m to produce a net profit of US$27m in Q1 2017.

AISC were down 2% QoQ and 3% YoY to US$934/oz with the decline in operating cash costs offsetting in part an increase in capex of 30% to US$47m. Despite higher capital spending the strong earnings improvement has significantly benefitted ACA’s balance sheet with net cash strengthening further, up 58% YoY to US$196m.

Despite the strong operational performance in Q1 the ban on the export of mineral concentrates from Tanzania has meant that ACA is now unable to export product from Bulyanhulu and Buzwagi as these mines unlike North Mara produce a mixture of concentrate and dore. Concentrate accounted for 30% of group revenues in 2016 and since the ban was implemented a stockpile of c.30koz has been built by ACA who are in negotiations with the government to resolve the issue.

Rio Tinto (LON:RIO)
Rio Tinto  has released weak operating results for Q1 2017 as strikes and bad weather disrupted production. A cyclone in Australia during the period caused flooding at the mine site, damage to railways and prevented ship loading meaning that iron ore production of 77mnt was down 3% YoY and 10% QoQ although the company has reiterated guidance of 330-340mnt for the full year.

Hard coking coal was also impacted by the cyclone and changes to the mine plan timing at Kestrel and production of 1.58mnt was down 20% YoY and 28% QoQ. Semi soft and thermal coal production of 5.2mnt was up 4% YoY and down 1% QoQ.

Copper production of 84kt was down 37% QoQ and YoY as operations at Escondida were disrupted by strikes. In combination with curtailed production at Grasberg Rio has reduced its copper output guidance for the full year to 500-550kt. Bauxite and aluminium saw modest annual improvements of 2% although quarterly declines of 7% and 3% to 11.3kt and 889kt respectively. Diamond production was also weak as Argyle production was down 11% YoY and 16% QoQ to 3mnct and flat YoY at Diavik but up 15% QoQ to 1mnct.

Thu, 20 Apr 2017 08:33:00 +0100
Beaufort Securities Breakfast Alert: Burberry Group Having seen Theresa May secure overwhelming majority support for a June 8th General Election, international traders also regained confidence enough to start unloading some the safe-haven investments they had accumulated in recent days. Gold stocks, for example, moved sharply lower following a slump in the precious metal's price for June delivery, while Treasuries gave ground sufficient for the 10-year yield to rise back to 2.209%. Not that its now 'risk-off' by any means. With investor focus presently at least focussed on blue-chip corporate results, US equities closed modestly mixed overnight. The Dow Jones found itself pressurised by tumbling IBM Corp. shares, which fell as much as 5.8% to their lowest level in over four months on quarterlies detailing weaker than expected revenues. This contrasted with upbeat earnings from Morgan Stanley a day after Goldman Sachs had left investors disappointed, while the NASDAQ found support from Yahoo, which is in the process of selling its core internet business to Verizon, delivering results ahead of estimates. The energy sector also slumped 1.4%, its fifth drop in six sessions, as oil prices settled nearly 4% lower following a smaller than expected decline in US crude stocks. With concerns of geopolitical tensions being temporarily put to the back of traders' minds, the US$ bounced convincingly off its five-month lows early Thursday morning, dismissing Trump's efforts to talk the currency down and reflecting instead on a Fed Futures indicating a 48.5% chance of another rate hike at the June FOMC meeting. London equities stood out from the bulk of European markets on Wednesday to end lower, weighted down by the re-strengthened Pound along with disappointment from a few large caps, including Burberry (BRBY.L) which sank almost 8% after a cautionary statement. The FTSE100 was also knocked by weak base and precious metals stocks which, despite good performances from supermarkets, travel companies and housebuilders providing some respite, means the index has now given back all its gains for 2017. Elsewhere, Europe was helped by new opinion polls confirming centrist independent Emmanuel Macron is retaining his lead ahead of Sunday's first round voting in the French Presidential Election, which was enough to edge the Stoxx Europe 600 up by 0.29%. Confidence here will be supported further this morning, following top ECB officials cautioning against reducing monetary stimulus too soon, suggesting the Central Bank will hold course at its April 26th - 27th policy meeting despite early signs of improvement in the eurozone economy. Asia equities recovered much of their losses from the previous session. Broad gains were led by the Nikkei, recording its fourth daily gain as the region continued to benefit from safety-first Yen investment, with the ASX and Hang Seng making positive similar moves, leaving only the highly volatile Shanghai Composite to close fractionally lower as locals responded to a new government clampdown on speculative trading. The UK today is only expecting a speech in Washington from the Governor of the Bank of England, Mark Carney, while macro releases due from the EU include April Consumer Confidence data. The US is scheduled to detail Initial Jobless and the Philadelphia Fed Manufacturing Survey, while the Treasury Secretary, Steve Mnuchin, is also due to make a speech. UK corporates due to publish earnings or trading updates include Acacia Mining (LON:ACA), Debenhams (LON:DEB), Unilever (LON:ULVR), Polymetal International (LON:POLY), (MONY.L), Go-Ahead Group (LON:GOG) and Man Group (LON:EMG). London is expected to continue its decline of recent days, with the FTSE100 seen down 15 to 20 points in opening trade."
- Barry Gibb, Research Analyst


The FTSE-100 finished yesterday's session 0.46% lower at 7,114.36 whilst the FTSE AIM All-Share index was unchanged at 940.29. In continental Europe, the CAC-40 finished up 0.27% at 5,003.73 whilst the DAX was 0.13% higher at 12,016.45.
Wall Street
In New York last night, the Dow Jones fell 0.58% to 20,404.49, the S&P-500 slipped 0.17% to 2,338.17 and the Nasdaq gained 0.23% to stand at 5,863.04.
In Asian markets this morning, the Nikkei 225 had risen 0.42% to 18,509.34 and the Hang Seng had gained 0.4% to 23,921.39.


Tesco to offload opticians' business to Vision Express
Tesco (LON:TSCO) is to sell its in-store optician business in the UK and Republic of Ireland to Vision Express, who will continue to run the eyeglass outlets. Tesco - which says the sale will "simplify" its business - has 206 optical stores in the UK and three in Ireland, as well as an online outlet. It employs about 1,500 staff, who will be transferred to Vision Express, owned by Dutch-based Grand Vision. The deal is expected to be completed this year, pending regulatory approval. No financial details about the sale have been given. Tesco UK chief executive Matt Davies said: "This allows us to further simplify and strengthen our UK business and ensures our customers are still able to enjoy high quality eye care services from Vision Express in our larger stores." Tesco Opticians, which opened its first opticians in Peterborough in 1998, had revenues of about £90m in 2016. Tesco has been selling off businesses including restaurant chain Giraffe, Dobbies Garden Centres and music streaming service Blinkbox. Vision Express has 389 stores in the UK and about 4,500 staff.
In early trade today, WTI crude was up 0.28% to $50.58/bbl and Brent was up 0.38% to $53.13/bbl.

Company news

Burberry Group (LON:BRBY, 1,566.00p) – Buy
Burberry, a UK based international luxury fashion and beauty brand, yesterday provided a trading update for the 6 months ended 31 March 2017 ('H2 FY2017'). During the period, total revenue fell by -1% to £1,607m (up +14% at reported currency basis), against the comparative period (H2 FY2016). Retail revenue advanced by +3% to £1,268m at underlying basis (up +19% at reported currency basis), while on a like-for-like ('LFL') basis, sales increased by +3%. Wholesale revenue fell by -13% to £327m (down -1% at currency basis), which was in line with guidance, with majority of the decline coming from a rationalisation of distribution in key markets and distributor de-stocking in Beauty. Licensing revenue declined by -38% to £12m, in line with guidance, primarily reflecting the planned expiry of the Japanese licences. On the operational front, the Group announced strategic partnership in Beauty with Coty, subject to regulatory approvals. The Group has also completed £100m of announced £150m share buyback programme, while confirmed that it is on track to deliver planned cost savings of £20m in FY2017 increasing to at least £100m annualised in FY2019. Burberry's CEO (and Chief Creative Officer), Christopher Bailey, commented "The outperformance of fashion and the strong customer response to new products underline our renewed creative momentum. While we have more to do, as we build on our progress so far, we remain confident about Burberry's prospects in the longer term."

Our view: Burberry has delivered good result for the H2 FY2017 amid uncertain environment. Its shares fell sharply yesterday as total revenue of £1.61bn came slightly below the consensus Analysts' estimate of £1.62bn. Furthermore, the LFL sales growth has slowed down in the Q4 to +2% (Q3: +3%) which resulted in nervous investors to sell. The Group said Asia Pacific region (+1% underlying revenue) was driven by the strong growth in Mainland China and double-digit growth in EMEIA (+5% underlying revenue) was led by exceptional performance in the UK. The positive performance was offset by the challenging environment in Americas which declined by -10% underlying revenue. Its Accessories outperformed (+4% underlying revenue), with mid-teens percentage growth in leather goods. The Group did not change its expectation for FY2017 adjusted pre-tax profit at FY2016 rates and said movement in exchange rate has boosted its reported adjusted retail/wholesale profit by £130m (previously announced £120m). Looking ahead, in FY2018, the Group said exchange rate at 31 March spot rates, it expects adverse movement in reported adjusted pre-tax profit of around £10m (previously announced c.£20m-£30m favourable), but the majority of this is expected to be offset by an improvement in underlying performance. We see yesterday's sell off was over-reaction. The recovery in mainland China and UK's continuous exceptional growth fuelled by both travelling luxury customers and domestic customers is a positive sign. While the recent strength in Sterling means foreign currency translation will cause adverse effect in FY2018, the Group is confident to absolve this through ongoing productivity and efficiency initiatives, along with improvement in underlying performance. The shares are valued at FY2017E and FY2018E P/E multiple of 21.0x and 19.4x along with dividend yield of 2.3% and 2.5% respectively. Given reiterated full year outlook with long-term confidence, Beaufort repeats its Buy rating on the shares with a price target of 1,920p.

Thu, 20 Apr 2017 08:13:00 +0100
Oil keeps foiling FTSE FTSE 100 Index called to open -10pts at 7105, with an overnight rebound from 2017 lows and pivotal support at 7090 finding resistance at 7120 on account of falling highs since Tuesday afternoon. Whilst the  index has held above 7100 since midnight, note the aforementioned falling highs also preventing any bettering of 7110 over the last hour. Bulls, noting an oversold RSI, are looking for a break above 7120 overnight highs to give hopes of a reversal back towards 7400. Bears want to see 7100 give way in order for 7090 to be troubled again to increase the probability of bigger declines. Watch levels: Bullish 7120, Bearish 7090.

Calls for another negative open come after a mixed session on Wall St and in spite of a decent performance in Asia overnight. Blame can be pinned on another drop in oil prices which will likely put another dent in the FTSE via disproportionately influential Oil Majors, with a negative read across for a commodity sector still troubled by lower metals prices and global growth uncertainty. Geopolitics is also keeping market guessing ahead of this weekend’s too tough to call first round French presidential election.

Cautious trade in Asia sees Australia’s ASX is outperforming in spite of Energy sector weakness while gains, something that is offsetting strength in financials, hopes of strong results from Canon and a weaker Yen to keep Japan’s Nikkei around breakeven.

US equity markets were mixed on Wednesday as Energy names weighed on blue-chip indices, while the Tech-focused Nasdaq avoided losses to close higher. The Dow Jones was led lower by underperformance from IBM on account of weak Q1 results and the crude oil price slide hurting oil major Chevron, while the S&P500’s Energy sector was the index’s greatest laggard.

Crude Oil prices have found support overnight following yesterday’s 3% slide for global benchmarks. The sell-off came as US EIA inventories report noted US crude oil production reached its highest level since June 2015, offsetting the bullish impact of the first back-to-back weekly drawdowns in inventories. Investors will be hoping a weaker US dollar or talks of an extension to OPEC-led production cuts could inspire a further recovery from lows of $52.60 and $50.50 for Brent and US benchmarks respectively, although note the potential emergence of bearish flag patterns.

Gold price has fallen further from its recent 5-month high as the US dollar attempts to recover from Tuesday’s 3-week lows, however is retaining support around $1278 as geopolitics remains at the fore.
Investors in the precious metal will have one eye on the performance of the global reserve currency following strength in its European counterparts earlier in the week, while the other will be focused on the latest news from the French presidential race, the Korean Peninsula and Syria.

In focus today will be, continued analysis of this weekend's French first round Presidential election as well as preparations and polls for our own UK snap general election in early June.

Data-wise, we have nothing until this afternoon when we get the US Philly Fed, forecast to give up yet more ground in April after February’s 33yr high, taking us back closer to levels seen in Jan. Thereafter, the US Leading Index is expected to see its pace of growth slow in March. Closer to home, Eurozone Consumer Confidence for March is expected to confirm improvement in March, getting back its levels from the turn of the year and best in around 2 years.

Speakers include the Fed’s Powell alongside European Commission Vice President Dombrovskis in a Q&A discussing "Capital Markets, Growth & the Economy of Tomorrow" at the "Global Finance Forum" held in Washington. Bank of England Governor Carney is also in Washington, participating at events by the Institute of International Finance (IIF) and Bank of France.

Thu, 20 Apr 2017 08:11:00 +0100
Market Briefing - Amur Minerals, Stratex International, Sula Iron & Gold, Edenville Energy and others Amur Minerals* (LON:AMC) – Road Access Update
ASA Resource Group* (LON:ASA) – Cash flow expected to be adequate for normal working capital requirements despite missing millions
Edenville Energy (LON:EDL) -  Coal wash plant for the Rukwa coal project
European Metals (LON:EMH) – Cinovec Preliminary Feasibility Study
Stratex International (LON:STI) – Stratex update on Turkey Dalafin and Egypt
Sula Iron & Gold (LON:SULA) – Drill samples dispatched for assay

Cobalt – Cobalt production stopped at Lubumbashi tailings operation as Gecamines argues over contract limits
• The Forrest Group which produces around 5,000tpa of cobalt from tailings at Lubumbashi has had access denied to its operations by Gecamines.
• Forrest International reckons Gecamines grievance is without merit.

BlueJay – The market for pigments and their feedstock, titanium mineral sands (Ilmenite), is hotting up as prices rise and US paint manufacturer PPG fights to buy AkzoNobel for $24bn.
• AkzoNobel has reported record Q1 earnings as it prepares to split its business into paints and speciality chemicals units.
• The company reckons its pre-tax earnings will be around €100m higher in 2017
• The separation is designed to create €50mpa of cost savings which is unusual as its normally combinations that result in these sorts cost benefits.
• Significantly higher ilmenite prices are being driven by strong demand for paint feedstocks as well as lower supply from titano-magnetite processing in China.
• We believe Chinese steel producers are moving away from titano-magnetite feedstocks for pricing and environmental reasons with better quality and cleaner Australian iron ore as a beneficiary of this shift in processing.

Gold is off slightly today(-0.5% or $6/oz) consolidating at the $1,285/oz level.
• US equities closed in the red yesterday as both S&P and Dow recorded declines led by financial and healthcare sectors.
• The pound holds onto its gains posted on Tuesday when the currency climbed 2.7% against the US$ following the announcement of snap elections and on expectations it will provide the PM more control over Brexit negotiations.
• The House of Commons will be voting on the PM proposal to call snap elections on 8 Jun later today.
• Base metal prices were up this morning with the US$ index hovering around a one-month low as market odds of a Fed rate hike in Jun subside.
• Chances the Fed will raise rates for a second time this year in Jun came down to 44% from more than 60% seen earlier in Apr as investors grow sceptical over the timing of pro-growth Trump changes to the current legislation.
• Iron ore futures extended declines to a third day now (Sep/17 contract -1.7%) while steel rebar prices have also trended lower (Oct/17 contract -1.0%).
• The spread between the higher grade benchmark (62% Fe) and the lower quality material (58% Fe) has also been narrowing over the past eight weeks from the peak of $29.5/t recorded in Feb/17 to c.$25.
• Crude is little changed trading at $54.9/bbl following two days of declines.

Economic News
IMF confirmed stronger global economic growth rates for 2017-18 in its latest review, slightly revising its estimates upwards.
• World economy is estimated to expand 3.5% this year and 3.6% in 2018.
• This compares to a 3.1% increase recorded in 2016 and forecasts for 3.4% and 3.6% growth rates in 2017 and 2018 estimated in the January release.
• “Stronger activity, expectations of more robust global demand, reduced deflationary pressures, and optimistic financial markets are all upside development,” the report said.
• In particular, the US is expected to post an acceleration in growth through the two year horizon to 2.3% and 2.5% in 2017/18, up from 1.6% in 2016.
• Euro-area growth is estimated to remain broadly unchanged from 1.7% recorded in 2016 – 1.7/1.6% in 2017/18.
• China, in line with market expectations, to continue gradual deceleration from 6.6% and 6.2% in 2017/18 from 6.7% in 2016.
• UK saw an impressive upgrade of 0.5pp in 2017 growth rates to 2.0% and 0.1pp in 2018 to 1.5%.

US – Industrial production and capacity utilization numbers beat estimates in Mar.
• Excluding auto production that weakened on the back of slowed sales and high inventories, industrial output posted an annualised increase of 3.1%yoy over Q1/17, the strongest quarter in almost three years.

US$1.0726/eur vs 1.0648/eur yesterday.   Yen 108.86/$ vs 109.02/$.   SAr 13.352/$ vs 13.377/$.   $1.284/gbp vs $1.259/gbp.  
0.751/aud vs 0.755/aud.   CNY 6.884/$ vs 6.889/$.

Commodity News
Precious metals:
Gold US$1,284/oz vs US$1,283/oz yesterday
   Gold ETFs 59.7moz vs US$59.6moz yesterday
Platinum US$977/oz vs US$983/oz yesterday
Palladium US$777/oz vs US$789/oz yesterday
Silver US$18.21/oz vs US$18.39/oz yesterday
Base metals:   
Copper US$ 5,647/t vs US$5,663/t yesterday – Total number of protesting miners increased by 800 workers to 3,000 at Peru operations at Southern Copper.
• The Company is planning to meet with union representatives tomorrow.
• Previously, the strike has been declared illegal as the union are expecting to file an appeal to contest the labour authority decision.
• Workers are said to have occupied the rail link between mining operations and an owner operated smelter; although the Company says the rail blocaked will have limited impact on output.
• Local Toquepala SX-EW and concentrator operations together with the Cuajone concentrator produced 312.8kt of copper in 2016.
Aluminium US$ 1,907/t vs US$1,940/t yesterday
Nickel US$ 9,435/t vs US$9,595/t yesterday
Zinc US$ 2,541/t vs US$2,597/t yesterday
Lead US$ 2,138/t vs US$2,210/t yesterday
Tin US$ 19,700/t vs US$19,680/t yesterday
Oil US$54.9/bbl vs US$55.4/bbl yesterday
Natural Gas US$3.151/mmbtu vs US$3.143/mmbtu yesterday
Uranium US$23.25/lb vs US$23.50/lb yesterday
Iron ore 62% Fe spot (cfr Tianjin) US$63.2/t vs US$61.2/t
Chinese steel rebar 25mm US$504.8/t vs US$512.7/t
Thermal coal (1st year forward cif ARA) US$66.3/t vs US$65.9/t yesterday
Premium hard coking coal Aus fob US$312.4/t vs US$314.0/t           

Tungsten - APT European prices $205-215/mtu vs $205-215/mtu

Base metals:   
Copper US$ 5,647/t vs US$5,663/t yesterday – Total number of protesting miners increased by 800 workers to 3,000 at Peru operations at Southern Copper.
• The Company is planning to meet with union representatives tomorrow.
• Previously, the strike has been declared illegal as the union are expecting to file an appeal to contest the labour authority decision.
• Workers are said to have occupied the rail link between mining operations and an owner operated smelter; although the Company says the rail blocaked will have limited impact on output.
• Local Toquepala SX-EW and concentrator operations together with the Cuajone concentrator produced 312.8kt of copper in 2016.
Aluminium US$ 1,907/t vs US$1,940/t yesterday
Nickel US$ 9,435/t vs US$9,595/t yesterday
Zinc US$ 2,541/t vs US$2,597/t yesterday
Lead US$ 2,138/t vs US$2,210/t yesterday
Tin US$ 19,700/t vs US$19,680/t yesterday

Oil US$54.9/bbl vs US$55.4/bbl yesterday
Natural Gas US$3.151/mmbtu vs US$3.143/mmbtu yesterday
Uranium US$23.25/lb vs US$23.50/lb yesterday

Iron ore 62% Fe spot (cfr Tianjin) US$63.2/t vs US$61.2/t
Chinese steel rebar 25mm US$504.8/t vs US$512.7/t
Thermal coal (1st year forward cif ARA) US$66.3/t vs US$65.9/t yesterday
Premium hard coking coal Aus fob US$312.4/t vs US$314.0/t           

Tungsten - APT European prices $205-215/mtu vs $205-215/mtu


Company News

Amur Minerals* (LON:AMC)6.1p, Mkt Cap £36m – Road Access Update
• The Company received topographic and hydrological data over the 4x320km corridor for the proposed road link between the Kun Manie polymetallic project and the Baikal Amur rail head.
• The information will be incorporated in the preliminary estimates for the optimised access route design.
• Road access development project is expected to consist of three phases:
o Complete a desktop study based on preliminary information including base level estimates for capital and operating costs;
o Preparation of a detailed engineering design supported by geomechanical and hydrological studies involving drilling, trenching and excavation activities; this phase also includes estimation of detailed capital and operating costs;
o Construction phase.
o Two Russian companies qualified for the engineering, design and construction of the transportation link have been shortlisted and are expected to submit respective offers for the first phase of works.
o The road is expected to be used all year around for transportation of 700-1,000kt of concentrate which in turn is planned to be either shipped to a third party for toll smelting or processed in-house for production of nickel matte.
o Given a relatively diverse topography including number of water crossings and bridges, the Company commissioned UK-based Mabey Bridges, a specialist in the design and construction of bridges suitable for arctic weather conditions, to work on the major infrastructure project.
o The Company is studying a potential to use geogrid on parts of the access route which comes at lower capex and maintenance costs.
o The management remains in close contact with the sovereign Far East and Baikal Area Development Fund over the source of infrastructure funding.
* SP Angel act as Nomad and broker to Amur Minerals

ASA Resource Group* (LON:ASA) 1.3p, Mkt Cap £22m – Cash flow expected to be adequate for normal working capital requirements despite missing millions
• The board of ASA, less the ceo and fd who were sacked without notice over the weekend have reported further on the missing funds.
• The board report $4.3m of funds are unaccounted for.  Eg funds which have been paid out but where there is no adequate explanation for goods or services received.
o $2.7m of funds relate to the year ending March 2016
o $1.6m of funds related to the year ending March 2017 and have been traced to two companies administered from Hong Kong.
o The board is trying to determine if there is any chance of recovering these funds and if the money is still in the two HK companies and may be recovered.
o The good news is that the board reckon that “continuing cash flows are expected to be adequate for the normal working capital requirements” of the mines and that each mine has its own banking facilities that are being utilised in the normal way.
o There are some costs relating to outstanding creditors and unpaid directors fees and salaries and to some legacy litigation which are expected to be paid in due course from management fees.
o A further ~$500,000 is owed to creditors as at 31 March in relation to its exploration around Zani Kodo in the DRC.  This is in line with normal working practice.
o The board now consists of
 David Murangari, non-exec Chairman,
 Scott Morrison, senior independent non-executive director, a metallurgical engineer and advisor to Metalor the gold refiners
 Olivier Barbeau, non-executive director and a chartered accountant
 Niall Patrick Henry, non-executive director
 Hu, Yuan Ching, former general manager of Taiwan A-Life Company remains as a non-executive director
 Ching Fung Hung, previously an auditor for Deloittes and Grant Thornton and a director of two HK companies remains as a non-executive director
• Mr Toi Muganyi, interim ceo and Mr Batirai Manhando, interim executive director, have yet to be elected to the board
Conclusion:  The realisation that so much money was siphoned out of the company before the directors responsible were fired suggests to us that the two mining operations are operating more profitably than previously appreciated.
We see the the misappropriation of funds by Chinese nationals is a stain on the reputation of China and will not help already strained Chinese relations within Africa.
*SP Angel acts as Nomad and broker to ASA Resources and its analysts have visited ASA’s Bindura Nickel, Freda Rebecca and Zani Kodo assets.

Yesterday’s comment repeated
ASA Resource Group* (LON:ASA) 0.95p, Mkt Cap £16m – Ning and Kwan terminated without notice as company continues investigation
• ASA Resources Group directors have been investigating allegations made with respect to payments to certain Hong Kong companies authorised by two Chinese directors of the company.
• “The Board is extremely disappointed to report that there is strong evidence of funds amounting to several million US dollars being transferred from the accounts of Freda Rebecca Gold Mine ‘FRGM’ to entities in China, without full value being received by ‘FRGM’.”
• Mr Ning, the ceo and Mr Kwan, FD, have been terminated immediately and without notice, due to findings by the board and their lack of explanation.
• “The financial controller of FRGM, another Chinese national, was suspended from his duties on 10th April 2017 in light of perceived breaches of FRGM procedures.”
• Mr Toi Muganyi has been appointed as interim ceo, Mr Batirai Manhando as an interim executive director and Ms Carla Mackay as interim finance director.  Mr Muganyi, Mr Manhando and Ms Mackay have extensive experience working within the group.
• “The Directors are satisfied that a number of anonymous allegations and press reports into matters at FRGM are unfounded and, particularly, that there has been no thefts of gold from the gold room at FRGM, nor had there been shipments of gold ore to China.“
• Ernst & Young, auditors to the Group will undertake further investigation. “It is intended that a full procurement audit will be undertaken as necessary.”
• “The Company has identified that funds are still to be accounted for by Group subsidiaries managed from Hong Kong.”
• “Cash analysis reveals that there is a pressing need for cash at ASA, FRGM and BNC levels and that the matters now under investigation have prejudiced their normal cash flows.”
• “Steps are being taken to bring all cash management under the direct control of Ms Carla Mackay and Jan Lampen (deputy finance director who already has been given a dual role of heading financial controls at BNC and FRGM).”
• “In consequence of the developments, a number of appointments made by Mr Yat Hoi Ning of Chinese managers and department heads are being rapidly reviewed and are likely to change.”
• “The Directors know that this news will come as a shock to many who have placed their trust in Mr. Yat Hoi Ning and Mr. Yim Kwan and they share the consequent disappointment with a feeling that they have been misled.”
Conclusion:  The non-executive directors have been following lines of enquiry and have acted quickly.  The board are thankful for the anonymous allegations which led to the inquiry.
*SP Angel acts as Nomad and broker to ASA Resources and its analysts have visited ASA’s Bindura Nickel, Freda Rebecca and Zani Kodo assets.

Edenville Energy (EDL LN) 0.76 pence, Mkt Cap £8.2m -  Coal wash plant for the Rukwa coal project
• Edenville Energy reports that its coal wash plant for the Rukwa project in Tanzania is now ready for shipping from the UK and that it expects the first shipments to leave on 20th April and take approximately 6 weeks to arrive in Tanzania.
• “The cargo consists of 15 main containerised units” and has been “fully inspected by an independent wash plant consultant for suitability and condition prior to purchase.  A new spares package has also been purchased which will ensure critical area components such as pumps are readily available should the need arise.”
• The company’s “team will follow the shipments to Tanzania to supervise the construction and commissioning phases.  The focus for this particular part of the Project now moves to preparations on site” and the company will provide “further updates on this as appropriate."
Conclusion: The shipping of the wash plant for Rukwa represents a milestone for Edenville Energy. The six-week long shipping period may be extended by port clearance and internal shipment of the containers within Tanzania, and we look forward to news of the start of installation of the wash plant on site as the next significant landmark in the evolution of the project.

European Metals (LON:EMH) 64 pence, Mkt Cap £83m – Cinovec Preliminary Feasibility Study
• European Metals Holdings has released the highlights of its Preliminary Feasibility Study (PFS) on the Cinovec lithium and tin project in the Czech Republic.
• Based on processing an average of 1.7mtpa of ore to produce 20,800tpa of battery grade lithium carbonate over a 21 years mine life, the study indicates that capital expenditure of US$393m generates an after tax NPV of US$540 discounted at 8% and delivers an after tax IRR of 21%. The study is based on metal prices of $10,000/t for lithium carbonate; $22,500/t for tin; $330/mtu for tungsten ad $520/t for sulphate of potash. We note that the assumed by-product prices are somewhat higher than the prevailing prices of US$19,885/t for tin and US$210/mtu for ammonium paratungstate.
• The company’s Managing Director, Keith Coughlan noted that “The study highlights the potential for Cinovec to be the world's lowest cost hard rock producer of lithium carbonate due to its unique geological and metallurgical characteristics.” The net overall cost of production is reported to be $3,483 per tonne of lithium carbonate.
• Among the characteristics of the project which contribute to the competitive cost structure, the company highlights:
o “By-product credits of tin, potash and tungsten
o The ore is amenable to single-stage crushing and single-stage coarse SAG milling, reducing capital and operating costs, whilst reducing complexity;
o Low temperature roasting and reagent recycling;
o Low cost access to extensive existing infrastructure and grid power;
o Highly skilled workforce and comparatively low costs of employment;
o Historic mining and chemical plant region - strong support by the local community for job creation in areas that have both historic and current operations; and
o Established and transparent mining code.”
o The company now plans to “move directly into a definitive feasibility study to accelerate the project towards development.”
o The PFS is based on overall extraction of 34.5m tonnes of ore, which represents only 9.9% of the total indicated resource, suggesting that, at a future date, there may be scope to expand the operation.
Conclusion: The Cinovec project is now moving into a definitive feasibility study which should firm up the project parameters – we look forward to future developments.

Stratex International (LON:STI) 2p, Mkt cap £9.3m – Stratex update on Turkey Dalafin and Egypt
• Stratex has today provided an update which indicates that a resolution to its continuing discussions with its Turkish partner, Bahar Madencilik, over the cash distribution from the Altintepe mine may be about to be reached  .
• Chief Executive, Marcus Engelbrecht commented “We are pleased to report our discussions with Bahar have been highly constructive over the last month and we look forward to a positive outcome that will see accretive value to the Company.”
• In addition, the company notes that, in conjunction with its local partner  Energy and Mining Corporation, a review of the 85% owned Dalafin exploration project in Senegal is nearing completion with ”a significant in-country cost reduction initiative” and the development of a joint strategy for the advancement of exploration. Stratex underlines its commitment to the Dalafin project “and believes the exploration done to date shows significant up-side potential.”
• The company has also released details of the latest drilling at the Anbat gold project in Egypt where 30.4% owned Thani  Stratex Resources’ (TSR) latest hole TSAND-07 has encountered promising gold intersections including 30.4m at an average grade of 1.71g/t gold from a depth of 34m; 0.75m averaging 45.5g/t from 113.25m and 34.45m averaging 0.54g/t from a depth of 136.55m.
• The results from Anbat  appear to mirror earlier drill-holes where what appear to be multiple flat lying mineralised horizons have been reported previously. Although the project remains at an early stage of exploration, and we look forward to further results as the 2017 exploration programme progresses.
Conclusion: If achieved in the near future, the resolution of the cash distribution from Altintepe offers the potential to fund the group’s exploration projects in Senegal, Egypt and elsewhere. We look forward to further news on both the negotiations with Bahar and the 2017 exploration programme.

Sula Iron & Gold (LON:SULA) 0.47p, Mkt Cap £10.4m – Drill samples dispatched for assay
• Sula reports that it has dispatched the first batch of samples from its current drilling programme on the Ferensola Gold Project in Sierra Leone for assay by the ALS laboratory in Ireland. Results are to be released as soon as they become available.
• The company has two drilling rigs deployed in Sierra Leone. “The first rig is drilling additional holes on Sula's Sanama Hill” property to test “for extensions of the known gold mineralisation”. The company’s consultants, SRK, have defined an exploration target of “5 to 7 million tonnes, grading at between 4g/t - 8g/t for 0.8 - 1.5 million ounces of gold” at Sanama Hill.
• The second rig “is focusing on Sula's Eastern Target, comprising a 4km long ridge, which has a very strong Induced Polarisation anomaly, and which Sula believes is indicative of pyrite mineralisation. Elsewhere on the Ferensola licence, notably at Sanama Hill, such pyrite mineralisation is associated with gold”.
Conclusion: We look forward to the assay results from the Ferensola Gold Project when they become available.

Wed, 19 Apr 2017 10:34:00 +0100
Breakfast News -AIM Breakfast : Lombard Risk Management, Forbidden Technologies and others Dish of the day

No NEX Growth Market Joiners Today

Off the menu

No NEX Growth Market Leavers Today

Dish of the day

Ten Entertainment Group—The UK's second largest ten-pin bowling operator with 40 sites announced that it has been admitted to the premium segment of the Official List

Off the menu

NetDimensions has left AIM following a cash offer

What’s cooking in the IPO kitchen?

Global Ports Holding—Intention to float on Standard List.  International cruise ports operator. Seeking $250m raise including $75m primary offer.

Dorcaster—Schedule One Update. Admission now expected  3 May. RTO of Escape Hunt raising £14m at 135p

Verditek— Intention to float on AIM. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Raising £3.5m. Admission in May.

Eddie Stobart Logistics— Schedule 1. Admission expected 25 April but capital raising details TBC.

ADES International Holding— Intends to join the Standard List in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. Admission expected in May.

Tufton Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence. 

Breakfast buffet

Reabold Resources (LON:RBD) 0.75p £2.4m

Reabold has entered into an agreement to buy an initial 2% interest in the advanced San Jose Lithium-Tin Project in Spain for a consideration of A$500,000. Raising £367.5k at 0.5p. High grade intercepts include 142m @ 1.2% Li2O from 67m, 68m @ 1.1% Li2O from 91m,    45m @ 1.0% Li2O from surface  and 250m @ 1.0% Li2O from surface. In excess of 1.1 million tonnes of LCE resource (Non JORC 2012). Updated JORC compliant resource expected May 2017 (including recent drilling).  Exceptional metallurgy results - 97% lithium recovery achieved in first stage metallurgical testwork.

Stanley Gibbons Investment (LON:SGI) 8.62p £15.4m

The world's pre-eminent, prestige collectibles merchant, has sold one of the rarest pieces of Indian Philately to a private collector-investor in Australia for £500,000, the highest price ever paid for a single Indian philatelic item.  The unique strip of four 1948 Gandhi 10 rupee Purple-Brown and Lake 'SERVICE' stamps is considered the most important and desirable item of post-1947 Indian philately. "The market for high-quality Indian rarities has been strong for several years and is supported by the on-going desire of the wealthy, Indian diaspora and savvy international clients to own these historic assets. Given Stanley Gibbons' specific expertise, we are best placed to identify, authenticate and trade rare Indian stamps of the highest quality."  There are no market forecasts,

Magnolia Petroleum (MAGP.L) 0.19p £1.66m

The US focused oil and gas exploration and production company, announced its participation in 12 new wells in proven and producing US onshore hydrocarbon formations, including the Bakken/Three Forks Sanish in North Dakota, and the Woodford, Mississippi Lime in Oklahoma.  The 12 new wells, which have an aggregate net cost of US$270,300, are in line with the Company's strategy to rapidly build production through drilling and to prove up the reserves on its leases. “Half of these new wells are increased density wells on leases where production has already been established. They therefore offer a low risk route to increasing production and upgrading reserves to the proven developed producing (`PDP') category.  As a result, we anticipate further growth in our PDP reserves which were recently assigned a value of US$4 million, almost double our current market capitalisation.”    

Lombard Risk Management (LON:LRM) 10.63p £42.56m

FYMar17 trading update form the provider of integrated collateral management and regulatory reporting technology solutions for the financial services industry. It expects to report revenues for the year, ahead of current market forecasts, in the region of £34.0m to £34.4m, primarily driven by strong revenue growth in the Company's Risk Management and Trading Software division. The Company expects to report a year-end net cash balance of £7.0m and adjusted EBITDA in the region of £2.4m to £2.8m, significantly better than market expectations. The year-end cash balance was higher than expected due to a strong focus on debt collection and improved working capital management. Capitalised Research and Development is expected to be in the region of £7.5m.  FYMar17E £31.9m rev and £4m pre-tax loss.

Vianet (LON:VNET) 105.5p £26.99m

FYMar17 trading update from the international provider of actionable data and business insight through devices connected to its Internet of Things platform. Trading for the second half of the year has continued to improve as anticipated and, as a result, the Group's full year profits will be broadly in line with market expectations and ahead of last year's outturn of £3.02 million from continuing operations.  We could see no market forecasts.

Bomarché Holdings (LON:BON) 75p £37.5m

Trading update (14 and 53 weeks) to 1 April from  one of the UK`s largest women`s value retailers.  14 weeks sales increased by 2.7% against the corresponding period in FY16. Store LFL sales decreased by 0.5% and online sales increased by 15.2%.  53 weeks sales decreased by 0.5%; store LFL sales decreased by 4.3% and online sales grew by 2.2%. The Board expects that the pre-exceptional PBT for the 53 week period ended 1 April 2017 will be slightly above the mid-point of the £5.0m to £7.0m range previously quoted on 21 September 2016. The Group`s financial position remains sound. ‘Whilst we expect the apparel market to remain challenging during the coming financial year, we are actively taking measures to improve our proposition to customers.’

European Metals Holdings(LON:EMH) 82p £98.4m

Successful completion of the Preliminary Feasibility Study ("PFS") for development of the Cinovec Lithium & Tin Project, which highlights that Cinovec could be a low cost lithium carbonate producer. Net overall cost of production -$3,483 /tonne Li2CO3. Net Present Value (NPV) -$540M (post tax, 8%).  Internal Rate of Return (IRR) - 21 % (post tax). Total Capital Cost -$393 M.  Annual production of Battery Grade Lithium Carbonate—20,800 tonnes. Study based on only 9.9% of defined Indicated Mineral Resources. ‘The study highlights the potential for Cinovec to be the world's lowest cost hard rock producer of lithium carbonate due to its unique geological and metallurgical characteristics. ‘ Strong macro outlook for Lithium.

System 1 Group (Formerly BrainJuicer) (LON:SYS1) 850p £104.25m

FyMar17 trading update. ‘The Company has continued to trade strongly since December 2016.  For the 12 month period ended 31 March 2017, vs the 12 months to 31 March 2016, revenue grew by some 27% to approximately £33m and gross profit (our main top line performance indicator) has grown by some 29% to approximately £27m.  Excluding the impact of exchange rate movements the increase in revenue was approximately 13% and gross profit was some 15%.  These growth rates are similar to those for the 12 month period ended 31 December 2016, as are the product mix and geographic split.’ Expects FYMar17 PBT post exceptional costs of £6.2m +25% in line with expectations.


Altitude Group (LON:ALT) 60p £27.83m

The provider of innovative technology solutions for small to medium sized businesses, has announced two new North America supply agreements. Firstly Buffalo NY based Market Brands who has undertaken to recruit 100 new sales staff to target the creation of tens of thousands of branded web stores for small businesses throughout the USA.  Altitude will receive a percentage of every order. Secondly, Altitude has signed an agreement for the supply of print, signage and photo book products ("Print Products") with a leading Tier One manufacturer that enabling the addition of these categories to the technology and supply chain platform.  FYDec17E rev £6.8m and PBT £2m. 18.8x PE.

Forbidden Technologies (LON:FBT) 6.88p £12.4m

The owner and developer of Forscene (the market-leading cloud video platform), announces that the Company's Forscene proof of concept with a major UK broadcaster has been extended to complete the testing and evaluation impacted by organisational changes at the broadcaster client.  The extended proof of concept with the broadcaster, which covers a workflow that includes the editing software of a major US technology player, is expected to conclude towards the end of the calendar year.  There are no market forecasts.


*A corporate client of Hybridan LLP

Wed, 19 Apr 2017 09:35:00 +0100
Northland Capital Partners View on the City - Edenville Energy Edenville Energy (LON:EDL) – CORP: Rukwa update
Market Cap: £8m; Current Price: 0.76p

Wash plant being loaded on to vessels
  Edenville Energy’s coal wash plant has been delivered to port in the UK, inspected and cleared by the appropriate authorities. Loading of the 15 containers onto vessels is currently occurring with the first shipment expected to leave the UK 20/04/2017 and arrive six weeks later.
NORTHLAND CAPITAL PARTNERS VIEW: Edenville Energy has commenced the shipment of its wash plant and associated equipment on schedule. The Company will now focus its efforts on preparations on site.

Wed, 19 Apr 2017 09:07:00 +0100
Oil price, President Energy, And finally... WTI $52.41 -24c, Brent $54.89 -47c, Dif -$2.48 -24c, NG $3.14 -2c

Oil price

A lacklustre day yesterday with little trade and few signs of position taking. The US shale production story from Monday was bearing down on the price whilst the Saudis are rumoured to be cutting more than they have to. The API stats showed a draw but not as big as hoped so the EIA numbers today may move the market.

President Energy

There is much going on at President both in Argentina and in the US, today is the turn for news from Louisiana. PPC has announced that it acquiring incremental production in its Triche well, East Lake Verret property in Louisiana which makes a lot of sense. The gain will be around 150 b/d and they will take on the operatorship which means no increase in G&A costs. The cost of the deal is $2.5m plus $400/- earn out which means that this will pay back in 30 months at $50 oil.

The deal takes PPC to production of 1,100  b/d and the work in Argentina continues so expect that figure to rise as workovers and cleanups deliver value added throughput. Overall this is very good news, with no further G&A, PPC can use their detailed knowledge of the well and the benefit of operatorship to take this production rapidly to the bottom line. One way and another there is mounting evidence that things are changing at President and for the better, weather apart, the good news shines through and patient shareholders can expect some decent upside in the coming months.

And finally…

Bad news for the Foxes as they were knocked out of the Champions League last night at the QF stage. Going behind early almost finished them as the away goal made the task almost impossible. With Real going through courtesy of a Ronaldo hat-trick the semis will be worth watching.

Wed, 19 Apr 2017 08:45:00 +0100
VSA Capital Market Movers - Altyn Altyn (LON:ALTN)
Altyn  has provided an update on Q1 2016 production highlighting the ramp up progress. Ore milled, grades and recoveries have all improved through the first quarter resulting in production of 5.2koz gold compared to 7.3koz in the entire of H2 2016.

The monthly ramp up demonstrates a clear positive progression with ore milled at 17.8mnt followed by 18.1mnt and 28.5mnt in each month through the quarter. Grades and recoveries of 1.79g/t, 2.59g/t and 2.55g/t and 73%, 86%, and 87% respectively demonstrated similar progression.

Through the year we anticipate further improvement in grades as higher grade ore is accessed while the improvement in recoveries is expected to be sustained now that the company is focussed on processing ore solely from the underground mine. Q2 production is expected to benefit from the addition of a load haul dumper for filling underground trucks which was delivered in March. Furthermore, a prospect drilling machine delivered in April will be operational in May 2017. This should enable more accurate definition of mineralisation and reduced dilution.

We believe that the company is on track to achieve its guidance for 2017F of 40-45koz and our estimates remain unchanged.

We reiterate our Buy recommendation and 5p target price.

To read our recent initiation report please click here.
Sula Iron & Gold (LON:SULA)
Sula Iron & Gold has announced that the first batch of samples to be assayed have been dispatched for analysis at the ALS laboratories in Ireland. Currently two rigs are on site with one focusing on the Sanama Hill area where the JORC Exploration Target was previously defined and the second on the significant IP anomaly known as the Eastern Target.

We reiterate our Speculative Buy recommendation and 1.6p target price.

Wed, 19 Apr 2017 08:33:00 +0100
Theresa May Snap Election Call Is Right for Brexit Britain Theresa May Snap Election Call Is Right for Brexit Britain
Here is the opening of today's main story, from the Financial Times:
Even by her Sphinx-like standards, Theresa May’s announcement of a snap general election was a well-kept secret. It was also an abrupt reversal: since entering Number 10 after the vote for Brexit, the UK prime minister has insisted repeatedly there was no need for an election before the scheduled date in 2020. Nonetheless, this is the right decision.

Britain is embarking on the most important constitutional change in its postwar history. The Brexit negotiations, set to begin in earnest after the French and German elections, will be tough, and they will require trade-offs that many voters will find hard to accept. Since triggering Article 50, the government has shown welcome signs of realism — recognising that business needs a transitional period when Britain leaves the EU and acknowledging that many jobs cannot be filled without migrants.
A strong mandate will help Mrs May to remain on this pragmatic course. It lessens the risk of her being held hostage at every stage of the negotiations by minority pressure groups. With polls giving her Conservative party a 21-point lead over the dysfunctional Labour opposition, she appears likely to win by a landslide.
The prime minister is disingenuous, though, to claim the election has become necessary because of “game-playing” by opposition parties. In fact, resistance has been lame to the point of culpability. Mrs May wants to avoid the fate of her predecessor John Major, whose authority was destroyed by Eurosceptic rebels. Today, a growing number of pro-Brexit zealots are clamouring for a crash exit from the EU rather than Mrs May’s vision of a “deep and special partnership”.
How she chooses to interpret these words if and when she is handed a commanding majority is unclear. Mrs May was notionally against Brexit before last year’s referendum but is now a committed advocate. The decision to call a snap election is intended to free her from unwanted interference from the Remainers among her MPs, just as much as from hardliners on the right.

David Fuller's view
This is a welcome move by Theresa May and her reasons are certainly not “disingenuous”, as suggested two paragraphs above.  She needs her own election victory and a strong majority to represent Britain most effectively in the important Brexit negotiations with the EU.
While the PM favours a mutually beneficial Brexit Agreement, this may not be possible, at least initially.  The EU is a troubled, protectionist organisation, determined to extract the highest possible price from any country which decides to leave.  Therefore, instead of negotiating in line with the EU’s extortionist terms, Mrs May must be prepared to walk away (effectively, hard Brexit) before a sensible new trade relationship can be agreed.
It would obviously be more difficult to do this with a slender overall majority of 17 seats, as EU Brexit negotiators certainly know.  Currently Conservatives have 330 seats, Labour 229, Scottish National Party 54, Liberal Democrats 9, Democratic Unionist Party 8, Independents 4 and Sinn Fein 4.
Of the Parties currently holding less than 10 seats, my guess is that Liberal Democrats will see the biggest percentage gain, attracting some protest votes from disillusioned Remainers. The others could gain a seat or two, at best, as could UKIP or the Greens.  I think seats held by the Scottish National Party will decline below 50 in a rebuff to Nicola Sturgeon.  Divided Labour will see the biggest losses, falling well below 200 seats.  Conservatives are likely to have a significantly increased majority approaching 400 seats.
(See also: Theresa May announces snap general election on June 8 to ‘make a success of Brexit’, from The Telegraph)

Europe Drove Turkey Towards an Autocrat. We Cannot Now Turn Our Backs on His People
Here is the opening and also a latter section of this perceptive column by William Hague for The Telegraph:

From opposite corners of our continent, Britain and Turkey have for some decades shared a similar perspective on the European land mass between us. Both have looked to Europe to boost their prosperity and, through NATO, to reinforce their common security. Both have an imperial past and a strong sense of independence, but have tried to find a way to work within the EU nonetheless – Turkey by applying to join it as long ago as 1987.
A Europe that could have held on to Britain and accommodated Turkey in its ranks would have contained crucial gateways to both the transatlantic world of the west and the Muslim and Asian worlds of the east. Indeed, the great vision of a fully democratic Muslim nation becoming permanently anchored in Europe was what motivated British politicians to support EU membership for Turkey. This was a great strategic prize – the answer to any ‘clash of civilisations’, the proof that Islam and Christian democracies could join together, and a way of forcing the EU to be broad and decentralised at the same time.
Yet now the EU is not only losing Britain. Sunday’s referendum result and the events of recent years mean it has lost Turkey as well. Albeit by a very narrow margin in a referendum in which airtime was systematically denied to the opposition side, Turkish voters approved a new constitution giving sweeping powers to President Erdogan and set their country clearly on the path to becoming an autocratic and probably authoritarian state.
To any outside and friendly observer, this is not good news. As foreign secretary I made more visits to Turkey than I can remember, worked closely with ministers in Ankara, encouraged their aspirations to join the EU alongside us, and admired the revival of the Turkish economy and an outward looking foreign policy in the early years of Erdogan. But now, on the back of a failed coup used as a reason to purge and arrest tens of thousands of opponents, the same man is leading his country down a dead end of intolerance, division and repression.
The result will be a weakened economy, as international confidence in the rule of law is diminished. Even worse, the concentration of such power in a more centralised state will make it harder to reconcile the many divisions between Turks who happen to be secular, or religious conservatives, or Kurds. Tens of thousands of people are in jail for political reasons, media outlets are ruthlessly intimidated, and a 51 per cent victory will now be treated as a mandate to implement everything the President desires. Excessive faith is being placed in one man, who shows all the signs familiar through the ages of having too much power for too long: paranoia, extreme sensitivity to criticism and the destruction of all potential successors. Few countries have ever become prosperous or happy places on the basis of such rule.
This prospect is deeply disheartening to Turkey’s friends abroad. But it cannot be dismissed as just a random event brought about by one man and his cronies. The result in Turkey tells us some things that are very important about where the world is heading.
A final lesson is that Europe’s collective mishandling of Turkey has been tragic. Year after year vital parts of Ankara’s accession negotiations were blocked, usually in Paris, Athens or Nicosia. Turkey was kept at a distance and obstructed in its efforts to become a European state, until eventually it has turned away, disillusioned and contemptuous. The EU could have embraced Turkey, just as it could probably have kept Britain as a member if it had been prepared to make compromises on migration. It lacks the collective will to do what is necessary for its own success.
The result of the referendum should therefore not be seen as Turks taking leave of their senses for reasons of their own, but as one manifestation of wider trends and failures, in their country but also around them. And that also means we must not turn our backs on them. They remain pivotal in resolving the war in Syria, and in attempting to manage flows of migration that seem destined to grow much larger. They are a vital ally and sit in one of the most strategically crucial points of the entire globe.
Even though they have voted to place their faith in one man in a way that British people think we never could, we still have a lot in common with the Turkish people. We should be sad for them this week. But, for the long-term, we should keep open to them our trade, alliances, understanding and friendship.

David Fuller's view
A more business-savvy EU might have accepted Turkey but that never seemed to be a realistic possibility.  Erdogan won’t be there forever and I agree with William Hague that the UK should take a long-term view on Turkey, by reaching out to maintain an alliance based on understanding, friendship between our two countries and trade.  Erdogan might well respond, given David Cameron’s previous efforts and also Brexit. 
A PDF of William Hague's column is posted in the Subscriber's Area.

Trump Congratulates Erdogan on Referendum as Europe Seethes
Here is the opening of this topical article from Bloomberg:

President Donald Trump congratulated Turkey’s President Recep Tayyip Erdogan on his referendum victory, a sharp departure from the critical reception many European officials have given the vote to expand Erdogan’s powers.
The Turkish leader stepped up his vitriol against European critics on Monday, telling a crowd of supporters, “We don’t care about the opinions of ‘Hans’ or ‘George’ or ‘Helga’.” All debates about the constitutional referendum “are now over,” he said.
European officials have deplored the concentration of so much power in one person’s hands, and the Organization for Security and Cooperation in Europe has faulted Sunday’s election process. The vote fell under suspicion because ballots that didn’t carry an official stamp were allowed to be tallied. The approval of expanded presidential powers won by a narrow majority of 51.4 percent.

David Fuller's view
It appears that Trump holds a similar view to Hague on Turkey and also the EU.  I am sure this has been noted by both Prime Minister Theresa May and Foreign Secretary Boris Johnson. 

Email of the day
On compulsory military service:
Dear David Have only just caught up with Roger Bootle's column re: Defence Spending, and your comments. Was particularly interested in your suggestion re: 2 year military service as I am old enough to have done National Service 1953-55, in Egypt and Cyprus. At that time there we had 80,000 men "guarding" the 99 mile long Suez Canal, while the UK had many other worldwide military commitments and had been heavily involved in the Korean War. I believe that the estimated TOTAL size of our army within a few years will be - below 80,000! Apart from financial constraints the Army is facing a severe recruitment problem. I suggest this is partly to do with the lack of support that soldiers receive after discharge. A significant number finish up on the streets and in prison. The meagre government aid available to these heroes is clearly insufficient, and it is left to charities like "Walking With the Wounded" and "Help for Heroes" to try to bridge the gap. I commend them to your readers. With best wishes

David Fuller's view
Thank you for this thoughtful email, which will certainly be of interest to many subscribers, not least those of a similar age.  A country can always do more to help solders who have suffered fiscal and mental injuries in battles. This should be a priority, in my opinion.  Government support is essential but it is also a national effort, involving charities and businesses.  Prince Harry’s efforts on behalf of wounded soldiers are both a credit to the Royal family and a testimony to his character.

Wed, 19 Apr 2017 08:14:00 +0100
The GBP escape? FTSE 100 Index called to open -10pts at 7135 but in the midst of a rebound and retest of overnight highs. This follows a flirt with 7100 Feb lows that took the recent sell-off from 7400 April highs to just over 4%. Support over the last few hours at 7120, coupled with overnight rising lows offers hope for a bullish turnaround, bolstered by oversold RSIs (hourly/4-hourly) in recovery, although Bears point to a daily RSI yet to go oversold and 200-day moving average support still 65pts away. Watch levels: Bullish 7140, Bearish 7120.

Calls for a negative open for equities come after losses on Wall St amid mixed corporate results overnight (Yahoo! beat, IBM missed), another leg down for Crude Oil drove a poor session in Asia and additional GBP strength took FTSE futures lower. Copper may be off its worst levels, but remains in a clear downtrend, although a rebound for Iron Ore offers some respite for a commodity sector troubled by scepticism about stimulus; too much in China and nothing to show yet from Trump in the US.

Australia’s ASX is in the red as Energy gets a hit from lower oil prices following less bullish than expected US API inventory data, while Real Estate was also weak. Japan’s Nikkei is outperforming despite pain in the Energy sector as a weaker Yen provides a translation boost for exporters.

US equity markets closed lower on Tuesday as weak Q1 earnings data hurt investor sentiment. A surprising miss from major component Goldman Sachs saw the Dow Jones underperform to close over 100 points lower, while a miss for Johnson & Johnson also hurt the index. The S&P500 fared a little better, down 0.3% as Healthcare names proved to be the biggest laggard, while the Tech-focused Nasdaq outperformed, albeit still closing lower by 0.1%, as Yahoo!’s final earnings report showed a 22% revenue jump.

Crude Oil prices have continued their retracement from last week’s highs as an extension to the OPEC-led production cuts continues to be downplayed, while an 840K barrel API inventory drawdown overnight fell short of expectations for this afternoon’s EIA data (1.4m drawdown expected). Meanwhile, a US dollar rebound overnight adds yet further bearish sentiment into the mix, even if it does take GBP from its 5-month highs (vs USD) to assist the FTSE.

Gold price continues to hover around falling highs resistance at $1286, as the precious metal has fallen from overnight highs of $1292 following an early rally during the US trading session on account of the weaker US dollar and persistent geopolitical tensions. An overnight rebound from the global reserve currency means it is off its worst levels, a bearish factor for the dollar-denominated commodity, although remains some distance from former support.

In focus today will be UK parliamentary vote on the proposed snap general election on 8 June. Theresa May’s government needs two thirds of MPs to approve a second general election in only three years, and with the opposition Labour party announcing that they will back the government’s proposal, it will likely be confirmed after Prime Minister’s Questions at midday.

Data-wise, the notable release of the day will be the final reading of March Eurozone Consumer Price Inflation (CPI). The headline figure is expected to be confirmed at 1.5%, having fallen back from February's highs of 2%, which will likely ease pressure on the European Central Bank to remove accommodative monetary policy measures ahead of their policy meeting next week. The ECB’s preferred Core metric is also expected to cool to 0.7% from 0.9% previously, well off its 2% target.

Also of note, US Q1 earnings season continues, with Dow Jones component American Express, online auctioneer eBay and banking stalwart Morgan Stanley all reporting first quarter figures. The latter will be hoping to avoid a repeat of peer Goldman Sachs’ surprising earnings miss yesterday.

Wed, 19 Apr 2017 08:12:00 +0100
Beaufort Securities Breakfast Alert: Keras Resources,Westminster Group, Zenith Energy, Motif Bio That sure took everyone by surprise! The FTSE-100 index plummeted 2.5% yesterday, its worst fall since the aftermath of the EU referendum pushing it back to February’s low, as market weighed a 1.6% jump in Sterling to a four-month peak against the US$ following Theresa May’s announcement of a snap general election on June 8th. Behind the PM’s ‘one-issue’ campaign is the prospect of an increased majority for the ruling Conservatives with the expectation this will strengthen the Government’s hand with forthcoming Brexit negotiations. Tumbling iron ore prices, which fell to a near six-month low on Tuesday, also contributed to the fall and left a number of major mining stocks were severely punished. BHP Billiton, Glencore and Anglo American, for example, all lost more than 5% during the European session. US indices tracked this with banking and health-care sectors sliding as individual quarterly results disappointed. Leading the former was Goldman Sachs Group, whose trading gains fell short of those recently posted by peers, while Johnson & Johnson tumbled after it detailed what analysts considered to be rather underwhelming sales. After a batch of disappointing recent US macro releases and a sharp rise in geopolitical tensions, with more than 60 firms in the S&P 500 expected to report this week, including more top tier banks and major industrials, continued evidence of good corporate health remains absolutely key to equities sustaining their positive momentum. Reflecting on this, some investors yesterday took opportunity yesterday to lock-in profits of recent months, reinvesting instead into safe havens like Gold, the Yen and Government Bonds. The yield on 10-year U.S. Treasuries, for example, fell to 2.177%, from 2.248% Monday, its lowest close since 10th November. Asian equities also suffered broad declines this morning amid continuing regional tensions, led by the Shanghai Composite Index which was down more than 1% to a two-month low, putting losses since Friday at more than 3%; elsewhere, Australia's S&P/ASX 200 fell around 0.5%, while the Nikkei slipped between gains and losses to end marginally in the positive helped by a softer Yen. National security concerns meanwhile remain high and rising, with the US being forced overnight to intercept Russian bombers off the coast of Alaska for the first time since 2015, while Washington expressed concerns regarding Iran’s role in supporting terrorism and two men were detained on suspicion of planning an imminent terror attack in the French city of Marseille after pledging allegiance to Islamic State. Traders consider the US$ will remain under pressure until next Tuesday’s Military Foundation Day in North Korea, which some believe may be the most obvious day for premier Kim Jong-un to make a defiant military gesture to Donald Trump’s administration. Selling pressure in crude futures continued during the Asian session, amid renewed worries about oversupply following weeks of gains on hopes of more constrained global output. UK corporates due to release earnings or trading updates today include AB Foods (LON:ABF), Burberry Group (LON:BRBY), Bunzl (LON:BNZ), Rio Tinto (LON:RIO) and Rentokil Initial (LON:RTO). No macro releases are due from the UK on Wednesday, but the EU is due to publish its harmonised Consumer Prices for March along with its February trade balance. The US meanwhile is schedule to provide its MBA Mortgage Applications and the Fed Beige Book. With investors convinced that Theresa May will enjoy an improved majority post 8th June, Sterling may well continue to appreciate against the presently out of favour US$ and Euro. This, along with heightened international uncertainty reducing appetite for risk, suggests equities in London will again open weaker once again, with the FTSE-100 seen down over 20 points in early trade. "
- Barry Gibb, Research Analyst

The FTSE-100 finished yesterday's session 2.46% lower at 7,147.50 whilst the FTSE AIM All-Share index lost 0.65% to stand at 940.29. In continental Europe, the CAC-40 finished down 1.59% at 4,990.25 whilst the DAX was 0.90% lower at 12,000.44.
Wall Street
In New York last night, the Dow Jones fell 0.55% to 20,523.28, the S&P-500 slipped 0.29% to 2,342.19 and the Nasdaq lost 0.12% to 5,849.47.
In Asian markets this morning, the Nikkei 225 had risen 0.07% to 18,432.20, while the Hang Seng shed 0.50% to 23,804.77.
In early trade today, WTI crude had fallen 0.1% to $52.36/bbl and Brent had lost 0.16% to $54.80/bbl.

RBS stake may be sold at a loss, chancellor admits
The chancellor has admitted for the first time that the government is prepared to sell its stake in Royal Bank of Scotland (RBS) at a loss. The Treasury bailed out the bank by buying a 72% stake for £45bn, at 502p a share, at the height of the financial crisis in 2008. Shares in the loss-making lender are now trading at less than half that price at 223p. Philip Hammond told MPs on Tuesday: "We have to live in the real world." He added: "Our policy remains to return the bank to private hands as soon as we can achieve fair value for the shares, recognising that fair value could well be below what the previous government paid for them. "We have to live in the real world and make decisions on the future of our holding in RBS in the best interests of taxpayers."

Company news

Keras Resources (LON:KRS, 0.42p) – Speculative Buy
Keras' spin off of its Australian gold assets is progressing well. It's acquirer, an Australian listed vehicle (which will be called Calidus Resources) has raised the A$620k it needs to get the RTO process started. The placing was oversubscribed. The next stage is a larger up to A$8m raise to fund a major drilling campaign and development programme at the Warrawoona Gold Project. Post RTO, and assuming an A$8m raise, Keras will own 31% of Calidus which increases (potentially to 60%) if certain milestones are achieved.

Our view: It is good news that the RTO is going to plan and that the placing was oversubscribed. Keras' gold assets should attract the funding they need on ASX while Keras can focus on its African portfolio of projects which includes manganese in Togo and potentially a nickel and cobalt project in west Africa (licences under application). Bear in mind that two of Keras' board members will be on the board of Calidus including Dave Reeves who will be managing director, so very well positioned to advance Warrawoona and win the milestone share payments for Keras and its shareholders. We have a Speculative Buy recommendation on Keras Resources.

Beaufort Securities acts as Corporate Broker to Keras Resources plc

Westminster Group (LON:WSG, 10.38p) – Speculative Buy
The AIM listed supplier of managed services and technology-based security solutions to governments and government agencies, non-governmental organisations (NGO's) and blue-chip commercial organisations worldwide, yesterday announced a placing of 10,000,000 new ordinary shares of 10p each to raise £1million before expenses. It also confirmed the conversion of the balance of the Convertible Loan Notes issued to Darwin Capital Limited, thereby eliminating the facility. Application will be made for the New Shares, which will rank pari passu with the Company's existing issued, to be admitted to trading on AIM, which is expected that will become effective for commencing on or around 2 May 2017. The new funding will support the development of the Company, with a particular focus on investment in its Managed Services division.

Our view: This new funding, together with the elimination of the Darwin facility, places the shares on a much firmer footing. Strategically, Westminster’s Aviation Security business identifies a highly compelling customer with powerful regulatory, political and economic drivers. It is an area at the forefront of many government’s security concerns, as was highlighted by UN Security Council Resolution 2909 which was passed in September 2016 following pressure from the British Government. With the Group’s strong governmental and industry connections and a proven business model, it is positioned to demonstrate strong cash and margin generation capability from long-term contracts, together with the potential to expand revenues by an order of magnitude. Indeed, its trading update from just two months back, confirmed the Board expects to report a much-improved financial performance for the year ending 31 December 2016, with revenue growth up 22% year-on-year and an expected break-even at the adjusted EBITDA level. The Managed Services division continues to make progress on a number of fronts. It's West African airport operations have experienced steady growth in embarking passenger numbers as the recovery from the Ebola crisis continues. In January 2017 (a seasonally strong month), for example, the airport operation recorded its second highest number of embarking passengers since commencing operations there in 2012, showing a 40% increase on the comparable period and following on from a 35% increase year on year in December 2016 (albeit December 2015 and January 2016 were still affected by the tail end of Ebola). The continuation of this growth pattern will potentially benefit both the Group's airport and ferry operations. Westminster's Cargo screening operations in Sierra Leone also commenced in West Africa during 2016, following the cargo operations and security screening service achieving the coveted RA3 status. The new cargo sheds currently have far greater capacity than current utilisation and the authorities are looking to build on this with create a regional hub for cargo services. In September 2016, management provided an update on its various airport opportunities under previously announced MoU's, all of which remain live and with certain opportunities having made good progress in recent weeks. Foremost amongst these is a major 15-year term, Middle Eastern airport contract opportunity which is expected to have annual revenues in excess of £35m. Elsewhere, Sovereign Ferries commenced operations utilising its Sierra Princess vessel in December 2016. Passenger numbers to date are in line with management expectations following a planned soft start in December designed to trial services and timetables. It is now operating 68 crossings a week to coincide with flight schedules and at full capacity is capable of carrying around 9,000 passengers a month. Marketing exercises have now begun including street video screen displays in country and plans are in place for ticketing sales through airlines, travel agents and hotels using its online booking system due to go live in the near future. This new service has been well received by passengers and the aim is to reach a minimum of 50% capacity during the second half of 2017, which should make a healthy contribution with continuing growth as the service expands. Having secured over £100,000 of annual recurring revenue maintenance contracts and further recurring contracts, the Technology division has also made a strong start to the year and continues to make a positive contribution to the Group with increasing margins. The long-term cash flow profile of these businesses, which require only limited additional capital support to fully secure their opportunity, make for a strong operational and financial business model, albeit with the risks incumbent with the geographical locations from which it operates. Beaufort commence coverage of Westminster Group with a Speculative Buy recommendation.

Beaufort Securities acts as Corporate Broker to Westminster Group PLC

Zenith Energy (LON:ZEN, 10.12p) – Speculative Buy
Zenith has published detailed updates on its workover activities in Azerbaijan. At well M-195, workover Team B has started a sidetrack operation due to metal debris encountered towards the bottom of the hole. Although this is a change from the original plan, it should be a positive as it will test an undisturbed section of the reservoir. Meanwhile, Zenith’s own team (named Team A which operates Zenith’s rig) recently replaced pumps at four wells and is now tackling some more challenging work. First is the recompletion of M-45 (in the Muradkhanli field) which requires reperforating and some production tubing replacement. Second is at Jafarli (J-2) which also requires removal of stuck production tubing and metal debris. Third is at Zardab (Z-28) where the whole length of production tubing needs removing and replacing if necessary. Team A is starting work on M-45 this week.

Our view: It is good to see a detailed description of Zenith’s workover programme. With two teams (and two rigs) active and plenty of wells to work on, we should see an uplift in production throughout 2017. Management has an ambitious target of 1,000 bopd by the end of 1Q18 which if achieved would push Zenith in to a different category of junior and clearly demonstrate the quality of its Azerbaijani asset. Bearing in mind Zenith's three fields in Azerbaijan have 2P reserves of 76 million barrels. We look forward to operational updates throughout the rest of 2017 and reiterate our Speculative Buy recommendation.

Beaufort Securities provides Investor Relations services to Zenith Energy plc

Diversified Gas & Oil (LON:DGOC, 66.50p) – Speculative Buy
Diversified Gas & Oil plc (‘DGOC’), the US based gas and oil producer, yesterday announced that it has acquired a package of 1,300 producing oil and gas wells in the states of Ohio and Pennsylvania, as per the announcement made on 24 February 2017. This expanded DGOC’s held production acreage by approximately 75,250 acres (in existing operating geography), gross gas production by +14% to approximately 30,000 Mcfd and gross oil production by +23% to approximately 585 bopd. For a purchase price of US$1.75 million, being funded through existing cash resources, the acquisition is expected to contribute operating cash flow for the Company of approximately US$1.0 million per annum, represents less than a 2-times multiple of forward operating cash flows, in line with the Company's acquisition criteria for acquiring mature assets. The wells generated net revenues of approximately US$3.0 million in the year to 31 December 2016.

Our view: : Doing exactly what they promised! This acquisition is immediately accretive to cash flow and represents a sizeable addition to existing Group assets. Given the Board’s IPO pledge to return 40% of Free Operating Cash Flow to shareholders in the form of dividends, based on the current share price this means the Group’s 2017E yield can now be expected to be in excess of 7%. Its existing portfolio comprises a large inventory of mature, conventional wells (75% gas, 25% oil), with very long lives, slow decline rates and minimal maintenance. This provides an ideal formula for high visibility free cash generation. Operating in an environment that presently lacks intense competition for the purchase of new assets, DGOC finds itself spoiled for choice from existing large shale gas operators in the Appalachian basis that are currently offloading non-core conventional production at bargain basement prices. By retaining rights to the shale opportunity below the conventional resource, however, continuation of production above entitles the shale operator to return to the deeper opportunity at a later stage without the need to secure new exploration permits. DGOC’s management, not surprisingly, has taken this exceptional opportunity to grab one of these and more can be expected to follow. Six packages have now been acquired over the past 18 months at highly favourable multiples of between 1x and 3x EBITDA, and there is presently another half-a-dozen or so being reviewed right now. DGOC is favourably aligned to the US gas market’s tight fundamentals, against a background of rising demand and flattening shale supply. As and when commodity prices do rise, the Group can also be expected to take advantage of over one million gross acres it holds as available for drilling out. DGOC look far too cheap on both peer group and DCF assessments for both income and growth investors. Beaufort reiterates its Speculative Buy rating with a price target of 95p per share.

Motif Bio (LON:MTFB, 32.50p) – Speculative Buy
The clinical stage biopharmaceutical company specialising in developing novel antibiotics, yesterday announced positive Topline results from REVIVE-1, a global Phase 3 clinical trial of its investigational drug candidate iclaprim in patients with acute bacterial skin and skin structure infections (ABSSSI). Iclaprim achieved the primary endpoint of non-inferiority (NI) (10% margin) compared to vancomycin at the early time point (ETP), 48 to 72 hours after the start of administration of the study drug, in the intent-to-treat (ITT) patient population. Iclaprim also achieved NI (10% margin) at the test of cure (TOC) endpoint, 7 to 14 days after study drug discontinuation, in the ITT patient population. In an analysis of a pre-specified secondary endpoint, 60.4% of patients receiving iclaprim demonstrated resolution or near resolution at end of therapy (EOT), compared to 58.3% of patients receiving vancomycin (treatment difference: 2.07%, 95% CI: -5.80% to 9.94%). In another pre-specified secondary endpoint analysis, using a modified clinical cure TOC endpoint defined by a >90% reduction in lesion size at TOC, no increase in lesion size since ETP and no requirement for additional antibiotics, clinical cure was seen in 68.5% of patients receiving iclaprim and 73.0% of patients receiving vancomycin (treatment difference: -4.54%, 95% CI: -11.83% to 2.74%). REVIVE-1 is a 600-patient double-blinded, active-controlled, global, multicentre trial, in patients with ABSSSI that compares the safety and efficacy of an 80mg intravenous dose of iclaprim with a 15mg/kg intravenous dose of vancomycin. Treatments were administered every 12 hours for 5 to 14 days. Iclaprim was well tolerated in the study, with most adverse events categorised as mild.

Our view: : Hooray!! Exactly the news we have been patiently waiting for! Early completion of the REVIVE-1 trials is an excellent sign in all respects. Not only has iclaprim’s primary end-point been met, but it was well tolerated, data from the second Phase 3 ABSSSI is expected in 2H’2017 and the NDA submission is expected in 1H’2018. This successful completion is a significant achievement in that iclaprim could be an important option for such patients, especially those with severe infections who may also have kidney disease with or without diabetes. It will come with it FDA Fast track approval followed by 10 years or market exclusivity. Unlike current standard of care antibiotics, in clinical trials to date, nephrotoxicity has not been observed with iclaprim and dosage adjustment has not been required in renally impaired patients. It is estimated that up to 26% of the 3.6 million ABSSSI patients hospitalised annually in the U.S. have kidney disease. This, of course, suggests very significant prospective demand for this novel antibiotic for this particular indication; investors should, however, recognise that much greater potential prospectively comes from the molecule becoming the foundation for a platform of drugs across several other key hospital conditions (beyond the skin and pulmonary that have already been cited). In this respect, the opportunity for iclaprim is very large indeed. Beaufort retains its 110p target price for Motif Bio and points to US peer Achaogen Inc. [NASDAQ:AKAO] as an obvious comparative that experienced a 500% share price appreciation on the days that immediately followed its own, similar positive antibiotic Topline data release. The fact that yesterday’s share price reaction for Motif was rather modest by comparison perhaps is more a reflection of London’s typical caution when in receipt of blockbuster news from early stage drug development companies. Thankfully, Motif has now achieved its own NASDAQ listing and, as such, New York can be expected shortly to start dominating daily trading in the shares, given that specialists in the territory appear to have a greater understanding as to the significance of yesterday’s news. As it stands, the current Motif Bio share price presents an important buying opportunity. Beaufort reiterate its Speculative Buy rating on the Shares.

Wed, 19 Apr 2017 08:07:00 +0100
Oil price, SDX Energy, Sound Energy, Independent Resources, And finally... WTI $52.65 -53c, Brent $55.36 -53c, Diff -$2.71 n/c, NG $3.16 -6c

Oil price

As predicted, the oil market was very quiet on thursday with few positions being taken ahead of the weekend especially with events in North Korea warming up. New oil rigs were up 11 units which was in line and the IEA are becoming more positive about the world supply and demand position. The EIA has slightly put a spanner in the works by predicting a big May for US shale but to be frank, not much more than expected.

SDX Energy

When it was first thought of, South Disouq was just a gas prospect but fresh mapping meant that the seismic showed the potential of a deeper target that might contain oil. Today’s result therefore has effectively delivered everything that was expected from the well and the company can drill on for oil as an added bonus.

Having reached 7,777 ft the well has found conventional natural gas bearing horizons in the Abu Madi with 65′ of net pay with a porosity of 25%. This was in line with pre-drill estimates and proved with remarkable accuracy the company’s mapping ability which bodes well for future targets here and elsewhere. Next here the well will continue to the deeper Abu Roash and AEB sections, targeting oil and in the meantime shareholders can stand by for some recoverable volume estimates which should make very pleasant reading indeed. The statement rightly points out that this is only part of the bigger plan, although this has been an excellent start it looks like there is much more to come…

Sound Energy

Sound has mobilised its Saipem rig from TE-8 and it is now on its way to drill Sidi Moktar which those with a long memory will remember Longreach for. Initially the rig will re-enter and test the two Kechoula discoveries and may side-track if it looks interesting. With the farm-out having been left behind Sound feels that it can use its strong financial position to retain its 75% WI and participate in any upside from the well. This strategy appears, well, sound as the Sidi Moktar licences expire on 28 August this year and with any luck the results should enable the company to renew for another eight year period.

Independent Resources

IRG has announced that following its earlier news regarding ownership etc it will proceed with a strategy based on a regional gas focus in South and Central America. They are planning an exploration and production campaign based on a ‘multi TCF, low cost onshore gas programme’ piping to high value markets on the continent. Initially they are to concentrate on Bolivia, Colombia and Brazil where the management have many years of experience.

Funding is to start with £10m of equity from Spartan Fund and €15m of debt from Greenberry both which will have warrants attached. These funds are intended to be used to evaluate, drill and develop assets acquired by the company and it is planned that, with approval, the shares will be consolidated by 25:1. Existing assets in Italy and Egypt are for sale and in Tunisia are under review.

I will write more tomorrow as I am heading now to the GM and strategy launch for what will become Echo Energy, however with such a strong team of backers, regional knowledge and significant potential this may become very much one to watch…

And finally…

Briefly, I suppose the news from the Prem is that with Chelski losing at the Theatre of Dreams Spurs may feel that they have a chance to mug them on the way to the party but looking at the run-in’s it may be easier said than done. Aftera  miserable run the Gooners won away from home but at ‘Boro it’s not much to shout about…

Tue, 18 Apr 2017 12:12:00 +0100
Market Briefing - Anglo Asian Mining, ASA Resource Group, IronRidge Resources, Vast Resources and others Anglo Asian Mining* (LON:AAZ) 19.5p, Mkt Cap 22m – Operations review
ASA Resource Group* (LON:ASA) 0.95p, Mkt Cap £16m – Ning and Kwan terminated without notice as company continues investigation into missing millions
Bluejay Mining* (LON:JAY– formerly FAM LN) 15p, Mkt Cap £110m – BlueJay steps further toward commercialisation on Pituffik project in Greenland
IronRidge Resources* (LON:IRR) price 43p, Mkt Cap £101m – Expanding the exploration portfolio in Ivory Coast
Metal Tiger (LON:MTR) 2.8 pence, Mkt Cap £22m – Metal Tiger placing falls short of expectations.
Vast Resources (LON:VAST) 0.5 pence, Mkt Cap £23m – Vast Resources warrants from offering to become tradeable on JP Jenkins

Major miners pull back on weaker iron ore prices and base metals with although the latest Chinese economic data showing better than expected growth in Q1/17.
• Gold prices came just $5/oz off the $1,300/oz mark on Monday before settling at $1,285/oz this morning on the back of safe haven demand amid continuing aggressive rhetoric between North Korea and the US.
• Copper prices are off slightly this morning trading $5,655/t extending the recent weakness in the metal’s price amid ramp up of major operations post temporary disruptions.
• Iron ore futures on the DCE are off 3.7% today on top of a nearly 3% decline on Monday with prices having now undone all gains seen earlier in the year and posting a 5.3% decline YTD.
• Steel rebar prices in China are also weak (-2.2%) taking the YTD run to -0.1%.

121 Mining Investment conference – sponsored by SP Angel - 10–11 May 2017
• The 121 team are running the London 121 Mining Investment conference at No 8 Fenchurch Street in The City on 10-11 May.
• The event is for registered investment professionals, mining and exploration companies and mining analysts and brings the industry together alongside a series of investor briefings.
• 65 quality producers, developers and explorers attending / presenting
• I’m talking at 3:00 on the Thursday on:  ‘UK mining outlook - A new era of UK funded exploration and production’.
• Follow link for investor passes - 

Dow Jones Industrials  +0.90% at 20,637
Nikkei 225   +0.35% at 18,419
HK Hang Seng   -0.97% at 24,027
Shanghai Composite    -0.79% at 3,197
FTSE 350 Mining   -2.41% at 15,157
AIM Basic Resources   -0.29% at 2,739

Economic News
US – The US Treasury confirmed that the tax reform bill timing has slipped following delays in getting changes to the healthcare legislation through the Congress, FT reports.
• Steven Mnuchin said the deadline for tax reforms to pass through the Congress before August was “highly aggressive to not realistic at this point”.
• “It started as an aggressive timeline. It is fair to say it is probably delayed a bit because of the healthcare.”

• GDP (%yoy): 6.9 v 6.8 in Q4/16 and 6.8 forecast.
• Industrial Production (%yoy): 7.6 v 6.0 in Feb and 6.0 forecast.
• Retail Sales (%yoy): 10.9 v 10.9 in Feb and 9.7 forecast.
• FAI (%YTD): 9.2 v 8.9 through Feb and 8.8 forecast.

France – Mr Melenchon, a far-left presidential candidate, expected to take 11% in coming elections a week ago increased his support to 19% ahead of the first round of votes due this Sunday.
• This compares to 22.5% for Macron and 23% for Le Pen.
• The second round of votes are expected in May 7.
• The risk of having a far right candidate and a far left one in the vote off in the second round of elections increased nervousness in the marketplace with French bond yields climbing to the highest in a year.

IMF – Christine Lagarde insisted that the Fund’s participation in the third Greek bailout for €86bn is conditional on the government implementing reforms agreed by euro zone finance ministers earlier this month.
• “If Greeks debts are not sustainable based on IMF rules and reasonable parameters, we will not take part in the programme,” Lagarde told German newspaper Die Welt in an interview published today.
• Despite little clarity on the IMF contribution to the bailout programme, Greek bond prices are stable with yields on benchmark 2y and 10y notes trading at the lowest since the beginning of the year.

Philippines – Rodrigo Duterte supported the Regina Lopez candidacy as head of the Department of Environment and Natural Resources (DENR).
• Under the protocol, Lopez candidacy will now need to be approved by the Commission on Appointments during the hearing on May 3.
• Duterte has long been in support of Lopez saying that he would rather give up 70bn peso ($1.4bn) per annum in mining royalties than fail to protect the environment (Mar11).

US$1.0648/eur vs 1.0655/eur yesterday.   Yen 109.02/$ vs 109.08/$.   SAr 13.377/$ vs 13.484/$.   $1.259/gbp vs $1.256/gbp.
0.755/aud vs 0.758/aud.   CNY 6.889/$ vs 6.884/$.

Commodity News
Precious metals:
Gold US$1,283/oz vs US$1,285/oz last week
   Gold ETFs 59.6moz vs US$59.3moz last week
Platinum US$983/oz vs US$974/oz last week
Palladium US$789/oz vs US$804/oz last week
Silver US$18.39/oz vs US$18.52/oz last week
Base metals:   
Copper US$ 5,663/t vs US$5,703/t last week
Aluminium US$ 1,940/t vs US$1,911/t last week
Nickel US$ 9,595/t vs US$9,765/t last week
Zinc US$ 2,597/t vs US$2,613/t last week
Lead US$ 2,210/t vs US$2,261/t last week
Tin US$ 19,680/t vs US$19,810/t last week
Oil US$55.4/bbl vs US$55.9/bbl last week
Natural Gas US$3.143/mmbtu vs US$3.158/mmbtu last week
Uranium US$23.50/lb vs US$23.50/lb last week
Iron ore 62% Fe spot (cfr Tianjin) US$61.2/t vs US$66.5/t
Chinese steel rebar 25mm US$512.7/t vs US$522.4/t
Thermal coal (1st year forward cif ARA) US$65.9/t vs US$65.3/t last week
Premium hard coking coal Aus fob US$314.0/t vs US$300.3/t
Tungsten - APT European prices $205-215/mtu vs $205-215/mtu

Company News
Anglo Asian Mining* (LON:AAZ) 19.5p, Mkt Cap 22m – Operations review
• The Company completed operations in the wake of changing mineralogy of mined ores at Gedabek as well as incorporation of recently discovered Ugur deposit into the mining plan.
• At Gedabek, mined gold grades have been trending lower recently while copper grades in mined ores increased.
• The management decided to suspend mining operations at the Gedabek open pit in Q2/17 to conduct more drilling (15,000m) and update the geological model.
• Mining is expected to restart in Q1/18.
• At Gadir, mined grades have also been declining (2.97g/t in Q1/17 v 5.84g/t in Q1/16) with mining operations temporarily suspended in Feb/17 for more exploration and underground development works.
• Mining is expected to restart in Q4/17.
• In the meantime, the processing plant will operate on accumulated stockpiles estimated at ”1.1mt of high copper content ore”.
• As a reminder, the Company operates a 1mtpa heap leaching operation and an 750ktpa tank leaching plant.
• In addition, the management expect to expedite development plans at the near-by Ugur located only 3km NW from Gedabek processing facilities with first ore from the proposed open pit targeted for Q4/17.
• No details on the potential size of the resource and indicative grades were provided in the announcement.
• 2017 gold production guidance is for 52-58koz (2016: 65.4koz) including 8-10koz contained in flotation copper concentrate and 8-10koz from the new Ugur mine.
• 2017 copper production guidance is for 2-2.4kt (2016: 1.9kt).
• On Q1 production results, gold output totalled 11.1koz (Q1/16: 14.0koz; Q4/16: 15.5koz) including:
o 9.3koz in gold dore from the heap and agitation leaching operations (Q1/16: 13.4koz; Q4/16: 14.2koz);
o 1.8koz gold contained in the copper flotation concentrate (Q1/16: 0.6koz; Q4/16: 1.3koz).
o Copper production came in at 0.6kt with 2-to-1 split between flotation and SART operations (Q1/16: 0.4kt; Q4/16: 0.6kt).
o Quarterly gold sales were 8.3koz at an average price $1,220/oz (Q4/16: 13.0koz at $1,227/oz), while copper concentrate shipments of 2.2kdmt generated $4.4m in sales proceeds (post PSA) (Q4/16: 2.1kdmt  for $3.9m).
o Net debt stood at $33.1m as of Q1/17, slightly down on $35.1m at YE16.
Conclusion: A revision to the mining plan and an urgent drilling programme commissioned at Gedabek to recalculate reserves led to a temporary suspension of all mining operations at the mine through to Q4/17-Q1/18 and resulted in a weaker production guidance for the year versus 2016. The management is advising the shortfall in the plant feed from Gedabek and Gadir mines is expected to be compensated by the processing of onsite available stockpiles as well as expediting development works at the next door Ugur mine to bring it in production in Q4/17. 2017 gold production target of 52-58koz includes 8-10koz from Ugur, equivalent to 15-20% of the annual guidance. As such, delivery of targets relies on the timely start of mining operations at Ugur, but more importantly on the ability to feed the agitation leaching plant with around 2g/t material (on our estimates). The announcement does not provide information on grades of onsite stockpiles or on the potential size and quality of the Ugur deposit.
The 2017 guidance comes in significantly below our previous estimates for 78.2koz contained in dore and concentrate reflecting a reduced contribution from the Gedabek and Gadir mines. While cash flows will benefit from the processing of stockpiles and reduced mining costs, the net effect on FCF is negative given weaker gold output estimates. Although, we estimate that even under updated reduced production schedule FCF generation should be enough to cover $7.5m debt repayment due to ATB and Gazprombank in Q2-Q4/17.
With the Company in the middle of reworking its mine plan at Gedabek and pending more details on Ugur, we suspend our recommendation (HOLD previously) and withdraw our previous earnings estimates.
*SP Angel act as Nomad and Broker to Anglo Asian Mining

ASA Resource Group* (LON:ASA) 0.95p, Mkt Cap £16m – Ning and Kwan terminated without notice as company continues investigation
• ASA Resources Group directors have been investigating allegations made with respect to payments to certain Hong Kong companies authorised by two Chinese directors of the company.
• “The Board is extremely disappointed to report that there is strong evidence of funds amounting to several million US dollars being transferred from the accounts of Freda Rebecca Gold Mine ‘FRGM’ to entities in China, without full value being received by ‘FRGM’.”
• Mr Ning, the ceo and Mr Kwan, FD, have been terminated immediately and without notice, due to findings by the board and their lack of explanation.
• “The financial controller of FRGM, another Chinese national, was suspended from his duties on 10th April 2017 in light of perceived breaches of FRGM procedures.”
• Mr Toi Muganyi has been appointed as interim ceo, Mr Batirai Manhando as an interim executive director and Ms Carla Mackay as interim finance director.  Mr Muganyi, Mr Manhando and Ms Mackay have extensive experience working within the group.
• “The Directors are satisfied that a number of anonymous allegations and press reports into matters at FRGM are unfounded and, particularly, that there has been no thefts of gold from the gold room at FRGM, nor had there been shipments of gold ore to China.“
• Ernst & Young, auditors to the Group will undertake further investigation. “It is intended that a full procurement audit will be undertaken as necessary.”
• “The Company has identified that funds are still to be accounted for by Group subsidiaries managed from Hong Kong.”
• “Cash analysis reveals that there is a pressing need for cash at ASA, FRGM and BNC levels and that the matters now under investigation have prejudiced their normal cash flows.”
• “Steps are being taken to bring all cash management under the direct control of Ms Carla Mackay and Jan Lampen (deputy finance director who already has been given a dual role of heading financial controls at BNC and FRGM).”
• “In consequence of the developments, a number of appointments made by Mr Yat Hoi Ning of Chinese managers and department heads are being rapidly reviewed and are likely to change.”
• “The Directors know that this news will come as a shock to many who have placed their trust in Mr. Yat Hoi Ning and Mr. Yim Kwan and they share the consequent disappointment with a feeling that they have been misled.”
Conclusion:  The non-executive directors have been following lines of enquiry and have acted quickly.  The board are thankful for the anonymous allegations which led to the inquiry.
*SP Angel acts as Nomad and broker to ASA Resources and its analysts have visited ASA’s Bindura Nickel, Freda Rebecca and Zani Kodo assets.

Bluejay Mining* (LON:JAY– formerly FAM LN) 15p, Mkt Cap £110m – BlueJay steps further toward commercialisation on Pituffik project in Greenland
(formerly FinnAust Mining)
BUY Target Price 22p, recently raised from 15p
• BlueJay Mining report that the Government of Greenland has entered into a pre-consultation phase with regards to the exploitation application process.
• The public pre-consultation takes 35 days and designed to create a collaborative dialogue between interested individuals and stakeholder groups.
• “The Company recently concluded settlement meetings throughout Greenland as part of the Social Impact Assessment process.  Importantly, there were no issues raised by the community, only that it should employ local people.”
• The company recently declared the delineation of an inferred resource of 23.6mt bearing 8.8% ilmenite in-situ across the total area tested and a high-grade zone of 7.9mt grading 14.2% ilmenite at Moriusaq bay where feasibility and production studies are ongoing.
• The resource contains world-class grades and are looking to drill a larger exploration target of 90-130mt which they estimate may grade between 6.3-8.4% ilmenite
*SP Angel act as nomad and broker to Bluejay Mining

IronRidge Resources* (LON:IRR) price 43p, Mkt Cap £101m – Expanding the exploration portfolio in Ivory Coast
• IronRidge Resources reports that it has secured an earn in agreement over a further 400 square kilometres exploration area, known as Vavoua South, adjacent to its existing Major Star-Vavoua exploration licences in Ivory Coast.
• The transaction comprises “staged earn-in arrangements, and following staged expenditure to Feasibility Study”. The vendors, Blue Fin SARL, will hold 30% of a special purpose vehicle. “In the event that BF's shareholding becomes diluted below 10 per cent of the issued share capital of the SPV then it is entitled to retain a NSR of 2.5% of which 40% may be acquired by IronRidge for US$3million at any time.”
• The additional Vavoua South area increases IronRidge’s overall land package in the country by around 12% to 3510 square kilometres comprising the Gboguhe, Vavoua and Vavoua South areas. A map published on the company’s website shows the landholdings straddling over 70 km of a belt of Birimian age rocks which includes the Abujar deposit which has a JORC resource of some 700,000oz of gold.
• The map portrays Abujar lying between IronRidge’s Gboguhe project to the south and its Vavoua South area towards the north. The area is an established Birimian shear zone where “The tenement portfolio covers major shear zones and associated second and third order structures along proven, gold bearing shears”.
• Details are sparse but our enquiries suggest that Abujar is controlled by Tietto Minerals, an unlisted Australian company based in West Perth, with a resource of 704,000oz of gold at an average grade of 2.1 g/t.
• IronRidge is targeting “Two significant splay structures off the Sassandra Shear Zone … Similar splay-off structures host the world-class Syama (7Moz) and Tongon (5Moz) gold mines to the north” as well as the southern extensions of well-known Ghanaian gold bearing structures which include the Bibiani (7moz) Ahafo (23m oz) and Chirano (5m oz) deposits.
• The company notes that the “projects are well serviced, with an extensive bitumen road network, well established cellular network and good high-voltage transmission line network.” which should facilitate the future exploration work.
Conclusion: The additional exploration ground increases the company’s footprint in what is an increasingly recognised gold exploration province in west Africa. In November 2016, Randgold Resources Chief Executive, Mark Bristow, announcing an exploration joint-venture with Newcrest in Ivory Coast, commented “both Newcrest and Randgold believe in Côte d’Ivoire and the potential for the discovery of truly world class gold deposits”. We look forward to further news as IronRidge’s exploration proceeds.
*SP Angel act as Nomad and Broker to IronRidge Resources

Metal Tiger (LON:MTR) 2.8 pence, Mkt Cap £22m – Metal Tiger placing falls short of expectations.
• Metal Tiger report that the previously reported financing with Sprott may fall short of the £4.29m previously reported.
• The closing date of the financing has been extended to Thursday.
• The offering is conditional on certain conditions being met before the closing date and may not if these conditions are not met.
• The statement does not state what the conditions are.
Conclusion:  This is an embarrassing and relatively unusual statement and leaves us wondering why the deal has not closed, what the conditions are and what happens if the funds are not received?  This does not look good for the name of Sprott or the brokers involved.

Vast Resources (LON:VAST) 0.5 pence, Mkt Cap £23m – Vast Resources warrants from offering to become tradeable on JP Jenkins
• Vast Resources report that the warrants issued on 1 August last year will become tradeable on JP Jenkins, the leading and possibly only matched bargain trading facility.
• The company recently reported a mineral resource from the Faneata tailings dam at the Baita Plai polymetallic project in Romania of ~3.0mt of total resource with 2.4mt of this attributable to Vast Resources.
• The tailings grade is estimated at 0.05g/t gold, 8.65g/t silver, 0.092% copper, 0.101% lead, 0.171% zinc, 0.013% bismuth, 0.006% molybdenum, 0.017% tungsten.

Tue, 18 Apr 2017 10:56:00 +0100
Breakfast News -AIM Breakfast : Ironridge Resources, APQ Global, Keras Resources, Faron Pharmaceuticals, Mosman Oil & Gas Dish of the day

No NEX Growth Market Joiners Today

Off the menu

No NEX Growth Market Leavers Today

Dish of the day

No AIM Joiners Today

Off the menu

No AIM Leavers today


What’s cooking in the IPO kitchen?

Ten Entertainment Group—The UK's second largest ten-pin bowling operator with 40 sites announced the successful pricing of its initial public offering and the placing of 16,250,000 Shares at a price of 165 pence per Share. Admission due 19 April.

Verditek— Schedule One. On Admission, the Company's subsidiaries will be involved in advanced solar photovoltaic, filtration and absorption technologies specialising in providing environmental services. Funding and admission date TBC.

Eddie Stobart Logistics— Schedule 1. Admission expected 25 April but capital raising details TBC.

ADES International Holding— Intends to join the Standard List in May raising up to $170m plus a vendor sale. Provider of offshore and onshore oil and gas drilling and production services in the Middle East and Africa. Admission expected in May.

Tufton Oceanic Assets– Offer extended to 9 May to enable investors to complete further due diligence.


Breakfast buffet

Keras Resources (LON:KRS) 0.4p £6.88m

Pharmanet Group Limited  (ASX: PNO), the ASX listed company which the Company will reverse its wholly owned gold subsidiary, Keras (Gold) Australia Pty Ltd into, has successfully raised A$620,000 (before expenses) from sophisticated investors in Australia.  The Proceeds of the Placing will support the planned listing of Keras' Australian gold assets on the Australian Securities Exchange as previously announced on 21 March 2017. It is anticipated that Pharmanet, which is currently suspended from trading subject to completion of the proposed acquisition, will relist on the ASX as Calidus Resources Limited in Q2 2017.

APQ Global (LON:APQ) 104.5p £81.57m

The emerging markets growth company incorporated in Guernsey which is listed on the Channel Islands Securities Exchange Authority Limited and admitted to trading on AIM announced that as at the close of business on 31 March 2017, the unaudited book value per Ordinary Share was 97.23 pence.

Ironridge Resources  (LON:IRR) 44p £104.8m

Ironridge has secured the right to acquire an additional highly prospective gold license application which complements and enhances the existing projects within Ivory Coast, West Africa.  Acquisition complements and enhances existing 3,110km2 portfolio in Ivory Coast for a combined total 3,510km2 land package over highly prospective geology. Strategic acquisition is adjacent to, and along strike from, a recently defined and growing third party 700Koz JORC compliant gold resource and complements the existing Vavoua and Gboguhue license applications in the west of the Country. Good access via extensive bitumen road networks. Ivory Coast represents an underexplored and highly prospective gold rich terrain within the prolific West African Birimian Greenstone sequence, with a diversified economy and pro-mining investment framework.

Faron Pharmaceuticals(LON:FARN) 612.5p £170m

The clinical stage biopharmaceutical company, has signed an agreement with the University of Birmingham Medical School, UK, to initiate a liver cancer program testing Clevegen, the Company's immuno switch antibody, in clinical trials. This collaboration will focus on trial and protocol design for a Phase I/II trial,) in liver cancer patients at Birmingham Health Partners' NIHR Clinical Research Facility and the Centre for Liver Research.  Approval will be sought from MHRA for an adaptive protocol, which would allow flexible administration of Clevegen based on results obtained in previous dosings. Faron and the University of Birmingham anticipate filing the clinical trial application  with the MHRA in late 2017 or early 2018.

Bluejay Mining (LON:JAY) 14.5p £106.3m

Permitting activities at the Pituffik Titanium Project in Greenland have commenced, having been notified by the Mineral Resource Authority ('MRA') of the Government of Greenland that it has entered the pre-consultation phase of the process.  The  period covers 35 days. By facilitating early input, this phase is aimed at creating a collaborative dialogue between any interested individuals and stakeholder groups throughout the later public consultation process and exploitation application process. The Company recently concluded settlement meetings throughout Greenland as part of the Social Impact Assessment process.  Importantly, there were no issues raised by the community, only that it should employ local people.

Begbies Traynor (LON:BEG) 49.75p £53.1m

According to Begbies Traynor's Red Flag Alert research for Q1 2017, which monitors the financial health of UK companies, levels of 'Significant' financial distress within key sectors of the UK supply chain have risen by 26% on average over the past year following increased cost pressures from rising inflation in both fuel and food prices. This follows the news that UK inflation rose to 2.3% in March, its highest level since September 2013, with transport costs being the biggest contributor, increasing 6.6% over the past 12 months.  This is before the impact of the National Living Wage that came into effect 1 April. The independent insolvency firm trades on 15.3x FYApr17E earnings and yields 4.4%.


Mosman Oil & Gas (LON:MSMN) 0.83p £1.7m

The oil exploration and development company, has executed contracts to acquire 50% of the Strawn Oil Project  located in Young County, Texas for a consideration of USD$75k. The Project will be operated as a JV and Mosman's Strategic Alliance Partner Blackstone Oil & Gas, Inc. has acquired the other 50% of the Project. Mosman will act as operator on the Project. Mosman has examined a number of production projects internationally and in the USA. The acquisition announced today is a small part of a larger overall strategy and other potential acquisitions continue to be examined and evaluated. This process is not limited to the previously announced Strategic Alliance or the Strawn Oil Project. Strawn is a small producer but  with potential to increase with modest workover budget,

Verona Pharma (LON:VRP) 0.83p £75.14m

The clinical-stage biopharmaceutical company focused on developing and commercialising innovative therapeutics for the treatment of respiratory diseases, announced  that the FDA has authorised the initiation of a pharmacokinetic clinical trial in the U.S. for the Company's product candidate, RPL554. RPL554 is a first-in-class, inhaled, dual inhibitor of the enzymes phosphodiesterase 3 and 4 designed to have anti-inflammatory as well as bronchodilator properties, currently in development for the treatment of chronic obstructive pulmonary disease and cystic fibrosis. With the IND effective, the Company plans to initiate a PK clinical trial in the middle of this year  with top-line data is expected in the fourth quarter of 2017.

redT Energy (LON:RED) 8.38p £54.77m

The energy storage technology company, has signed an agreement with The Olde House, a working farm and holiday retreat, situated in North Cornwall, to place six of its redT energy storage machines, totalling 1.08 MWh. The Olde House is an early leading innovator in using renewable technology to support its business, adopting solar and biomass generation as well as demand use management. The installation is being supported by energy services company Centrica who will also work with the site owner to optimise the use of the redT's energy storage assets. ‘redT's machines will demonstrate how distributed energy grids such as this can embrace solar generation by coupling with energy storage to provide reliable, cheap energy all day and night.’

Zoo Digital Group (LOO:ZOO) 11.25p £3.67m

The provider of subtitling and digital distribution services for the global entertainment industry, is proposing to raise gross funds of approximately £2.58 million, through a Placing and Subscription at 9 pence. The Company has further announced that it is proposing to issue 12,222,223 New Ordinary Shares at 9 pence in respect of the Capitalisation and by way of the Extensions, to extend the terms of its outstanding CLN1 and CLN2 (Convertible Loan notes) by a period of three years. The transaction includes Director participation. There are no market forecasts.


*A corporate client of Hybridan LLP

Tue, 18 Apr 2017 10:16:00 +0100
Northland Capital Partners View on the City - Motif Bio, Veltyco Group, Keras Resources, Motif Bio Plc (LON:MTFB) – BUY*: Positive Phase 3 results
Market Cap: £67m; Current Price: 34p; Target Price: 90p

Iclaprim achieved primary endpoints in REVIVE-1 Phase 3 trial
  Motif announced positive top-line results from REVIVE-1, its flagship global Phase 3 clinical trial of investigational drug candidate iclaprim in patients with acute bacterial skin and skin structure infections (ABSSSI).
  Iclaprim achieved the primary endpoint of non-inferiority (NI) (10% margin) compared to vancomycin at the early time point (ETP), 48 to 72 hours after the start of administration of the study drug, in the intent-to-treat (ITT) patient population.
  Iclaprim also achieved NI (10% margin) at the test of cure (TOC) endpoint, 7 to 14 days after study drug discontinuation, in the ITT patient population.
  The drug was well tolerated in the study, with most adverse events categorized as mild.
  Data read-out for REVIVE-2 is anticipated in the second half of 2017.


Veltyco Group plc (LON:VLTY) – BUY*: Acquisitions
Market Cap: £27m; Current Price: 40p; Target Price: 52p

From Thursday: Acquisitions expand service offering
  The board of Veltyco Group plc (‘Veltyco’) announced last week that it had raised €2.5m through the issue of 5.6m shares via a subscription. The new shares represent c. 7.7% of the Company’s enlarged share capital and is expected to commence trading on 24 April.
  Veltyco proposed to acquire controlling stakes in two synergistic businesses, Bet90 an online sports betting brand and (T4U) an online sports-betting forum for a combined consideration of €2.5m.
  Veltyco will acquire 51% of Bet90 for a consideration of €2m and build a new online sports betting business focused on the Nordic and South American regions. The Bet90 online platform is being upgraded to a new SBTech sportsbook and is scheduled to go live in June/July 2017. SBTech is arguably best of breed concerning online sportsbooks, the business has over 70 customers using its technology, provides a full omni-channel solution for online, mobile and retail sports, offers betting on over 55 sports, importantly offers over 20,000 in-play events a month and more than 2000 betting markets. This combined with Veltyco’s expertise in online marketing should put the Bet90 brand in good stead to drive online sports betting customers to the Bet90 brand.
  T4U is a marketing business which acts as an affiliate for major sportsbook brands, such as Bet365, and has a growing player database of c. 14,000 active players. Veltyco will acquire 51% of T4U for a consideration of c. €0.5m, with an option to acquire the remaining 49% for c. €0.5m in cash based on performance. Though smaller in nature the T4U marketing business is high margin, c. 69%, in nature as per management information to December 2016 and is expected to be earnings enhancing for Veltyco. The profit of €0.2m to December 2016 will add c. 10% to Veltyco’s profit of c. €2m to December 2016 as per Veltyco’s trading statement dated 14 February.

Keras Resources (LON:KRS) – CORP: Pharmanet placing
Market Cap: £6.9m; Current Price: 0.4p

Pharmanet completes A$620,000 placing
  Pharmanet Group (PNO.ASX), the ASX company that Keras Resources will reverse its wholly owned gold subsidiary, Keras Gold Australia into, has raised A$620,000.
  The proceeds of the placing will support the listing of Keras’ gold projects on the ASX.
  Pharmanet is expected to relist on the ASX as Calidus Resources in Q217.
NORTHLAND CAPITAL PARTNERS VIEW: This oversubscribed placing has given Keras Resources management confidence that a larger placing can be completed as part of the ASX transaction. Following the RTO, Keras will initially hold c. 31% of Calidus Resources, 85% of the Nayega Manganese Project, located in Togo and 100% of the five exploration licences applications in West Africa that cover previously discovered, cobalt and nickel mineralisation.  The Company is confident these projects offer further upside opportunity to our investors.

Tue, 18 Apr 2017 09:12:00 +0100
Jeff Bezos Shareholder Letter: Do Not Let the World Push You into Becoming a Day 2 Company Jeff Bezos Shareholder Letter: Do Not Let the World Push You into Becoming a Day 2 Company
Here is the opening of this interesting letter, posted by UK Business Insider:

Amazon CEO Jeff Bezos knows a thing or two about building a successful business. Several analysts have predicted that Amazon will be the world's first company with a trillion dollar valuation, and Bezos recently become the second richest person on earth.
In his latest letter to Amazon shareholders published Wednesday, Bezos explains why he believes that centering a business around "obsessive customer focus" is the best way to succeed.
He also touches on Amazon's use of machine learning and artificial intelligence, one of the biggest trends in tech, and how it touches nearly every part of the company.
"Jeff, what does Day 2 look like?"
That's a question I just got at our most recent all-hands meeting. I've been reminding people that it's Day 1 for a couple of decades. I work in an Amazon building named Day 1, and when I moved buildings, I took the name with me. I spend time thinking about this topic.
"Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1."
To be sure, this kind of decline would happen in extreme slow motion. An established company might harvest Day 2 for decades, but the final result would still come.
I'm interested in the question, how do you fend off Day 2? What are the techniques and tactics? How do you keep the vitality of Day 1, even inside a large organization?
Such a question can't have a simple answer. There will be many elements, multiple paths, and many traps. I don't know the whole answer, but I may know bits of it. Here's a starter pack of essentials for Day 1 defense: customer obsession, a skeptical view of proxies, the eager adoption of external trends, and high velocity decision making.

David Fuller's view
I commend this letter to subscribers because Jeff Bezos is well known as one of the most successful people on the planet.  He is a creative, ambitious, original thinker and a perfectionist.  He is also very good at motivating his team, and not afraid of making a mistake.


Europe Risks Nightmare as Anti-Euro Bolshevik Storms France
Here is the opening and also a latter section of this fascinating column by Ambrose Evans-Pritchard for The Telegraph:

France suddenly faces the real possibility of a presidential run-off between the Eurosceptic hard-Left and the Eurosceptic hard-Right.
The meteoric rise of Jean-Luc Mélenchon on a Proudhonist - if not Bolshevik - platform has changed the equation. He is just as nationalist and radical as the Front National's Marine Le Pen, and certainly more dangerous for the owners of capital.
"Absolute catastrophe. Mélenchon is the Venezuela scenario, Le Pen is the Argentine scenario," warns Pierre Gattaz, head of the French employers' federation MEDEF.
Both candidates are anti-German, anti-American, anti-globalist, anti-NATO, and pro-Putin. Both want to rip up the EU Treaties. Both want some sort of parallel currency or sovereign monetary control.
Both are viscerally hostile to financial markets and to liberal labour reform. Both want a bigger French state financed by borrowing, and damn the deficit. The ideologies merge. 'Les extrêmes se touchent', as the French say.
If the complex arithmetic of the first-round election on April 23 leads to a duel between these two wings of the French Resistance, the outcome will be shattering for monetary union and the European project.
While it is true that neither would have a working majority in the French parliament, this alleged safeguard raises as many questions as it answers. Does anybody think that the euro experiment - already fragile and damaged - can survive for long if one of its two anchor states is embroiled in political civil war with no functioning government?
It is fitting that Mr Mélenchon's "Left Front" movement has been renamed "France Insoumise" (Unsubjugated France). He is playing the Left-nationalist card as hard as Mrs Le Pen plays the Right-nationalist card.
Among his policies are a 32-hour week, retirement at 60, a top tax rate of 90pc, effective confiscation of any income above €400,000, a higher wealth tax, a luxury tax, recruitment of 60,000 more health workers for a larger state heading for 60pc of GDP, and fiscal slippage of €175bn over five years according to the Coe-Rexecode institute. Mr Macron rightly calls him a "revolutionary Communist".
Whether voters really would vote for Mr Mélenchon's fiery cocktail in preference to Le Pen's more cautious bourgeois variant is far from clear, once they discover what he is actually proposing. Either way, a victory by one or the other would be an earthquake.
The political contours of Europe have changed in this election. It has shown that the Brussels and the EU system can no longer rely on the emotional consent of the French Left.

David Fuller's view
This is all very exciting, or terrifying depending on your perspective. While interested, I am only a distant observer and although looks can be deceiving, in the photo posted in AEP’s column, Jean-Luc Mélenchon looks like a kindly gentleman and he has been described as articulate by the press. That does not remind me of a “revolutionary Communist”, as he has been described by Emmanuel Macron who currently has a slight lead in the French polls.  I expect revolutionary Communists to look more like the UK’s Corbynistas.
What I do know, given Mélenchon’s policies mentioned above, is that they would drive even more of France’s entrepreneurial families to London, where they remain most welcome.
My hunch is that the youthful, fresh faced former banker Macron will win, now that he has positioned himself at the political centre of French politics.
However, if Le Pen or particularly Mélenchon becomes the next president of France, that should make the UK’s Brexit a little easier.

The Swamp Is Rooting for Kushner
Here is the opening of this interesting column by Albert R Hunt for Bloomberg View:

Jared Kushner has only been in Washington for several months, but he's already benefiting from a law of bureaucratic nature: The right rivals make you look good.
In a White House awash in internecine warfare, the most prominent combatant is Kushner, President Donald Trump's son-in-law, who has been given a wide-ranging portfolio. Kushner's chief adversary is Steve Bannon, the nationalist champion of the alt-right who says he wants to deconstruct the administrative state. Not surprisingly, the capital establishment, not eager to be deconstructed, despises Bannon and thus puts its hopes on the 36-year-old Kushner.
Kushner's backers, including some closeted Democrats, argue that he's getting Trump to govern in a rational way. Some contend that he'll turn Trump into a mainstream Republican or even persuade the president to return to his roots as a conservative Democrat. Both notions are preposterous. The best critics can hope for is that Kushner will diminish the influence of Trumpist extremists, especially Bannon. The inside-the-Beltway betting is on Kushner.
Internal White House friction isn't unusual and there usually is an establishment favorite. Sometimes the favorite is also the best person: in President Ronald Reagan's White House, for example, the pragmatic Chief of Staff James Baker was more talented than his arch-conservative rival, the White House counselor Ed Meese. In President Bill Clinton's administration, by contrast, the conventional wisdom was that the Washington insider and White House counselor David Gergen would save the president from his inexperienced political aides; that was wrong.

David Fuller's view
Jared Kushner appears to be a great find for Trump and his best asset is his smart, sensible wife, Ivanka Trump.


Tue, 18 Apr 2017 08:30:00 +0100
VSA Capital Market Movers - LGO Energy LGO Energy (LON:LGO)
LGO Energyhas announced that the second development well of its drilling campaign in the Mayaro Sandstone is now on production. It was drilled to a total depth of 1,250ft and perforated over a 269ft interval of net oil pay before flowing at an initial rate of 80bopd, above company guidance of 45bopd. Once the natural flow period ends the well will be placed on pump at an initial stabilised rate of c65bopd.

LGO has approvals in place for the next three wells in its campaign and is now evaluating the drilling contracts before embarking on the next 3-5 wells in its programme. We maintain our BUY recommendation.
Benchmark Prices
- Brent:   US$55.36/bbl -US$0.53/bbl
- WTI:   US$52.65/bbl -US$0.53/bbl
- Henry Hub:   US$3.16/MMBtu -US$0.06/MMBtu

Tue, 18 Apr 2017 08:27:00 +0100
Beaufort Securities Breakfast Alert: Weetabix "Apparently shrugging off geopolitical tensions and a batch of disappointing macro releases, US traders yesterday instead chose to concentrate on the release of quarterly corporate earnings. This allowed US equities to bounce quite decisively, with the S&P500 off the two-month low recorded in its previous session with banks and tech shares leading a broad rally. Having seen Citigroup and JP Morgan the first beat consensus quarterlies last week, hopes are also high today for Goldman Sachs while Morgan Stanley and Blackrock follow tomorrow; tech investors are similarly optimistic that results will justify the sector's recent run with Amazon last night's largest gainer amongst the blue chips. By the close of business, all three principal US indices closed near their highs of the day, despite poor data from the National Association of Home Builders and an unexpected dip in retail sales. Yet with US and North Korea exchanging harsh warnings as rising tensions between the two powers resulted in an envoy from the Peninsular telling the US President that "Nuclear war may break out at any moment ", traders can be expected to remain touch-sensitive with safe-haven assets, such as the Yen, Gold and Triple A-rated government bonds, likely to return to favour at a moment's notice. The US$, which normally enjoys default status amongst international currencies during time of uncertainty, however, remained out of favour in response to comments last week from Donald Trump forcing the Greenback to a 5-month low against the Yen, after he suggested it was "getting too strong" and that he preferred a low interest rate policy. Indeed, his apparent recent preference for a dovish Fed, has been enough for some to suggest that Janet Yellen may, after all, be invited to remain the Reserve's Chairwomen. Asia this morning ended mostly down with only the Nikkei recovering slightly from recent falls despite the impact of Yen strength, while other regional bourses not surprisingly weakened amid rising local tensions. Europe's opening this morning is likely to focus on the French Presidential Election which is now less than a week away. Recent strength of far-left Jean-Luc Mélenchon and the accompanying decline of Emmanuel Macron has left traders concerned that the expected 7th May run-off could even end up being fought between two relatively extremist parties positioned at either side of the political spectrum, neither of which would be considered good for either the Euro or long-term survival of the EU. There are no significant UK or EU macro releases due today, although the US is due to provide March building Permits, its Redbook Index, Industrial Production and Capacity Utilisation. The only UK corporate due to report earnings or trading updates is Headlines
Weetabix to be sold to US company Post Holdings
UK cereal firm Weetabix is to be bought by US firm Post Holdings for $1.8bn (£1.4bn), its owner has confirmed. Weetabix - made in the UK since 1932 - was put up for sale in January by China's Bright Food, which bought a 60% stake in 2012. Bright's acquisition was the largest by a Chinese firm at the time, but it is believed to have struggled to build significant market share in China. Chinese consumers prefer a hot, rice-based breakfast to cold cereal. While Weetabix doubled sales in China in 2016, the UK still accounts for the majority of its sales. Post Holdings is the third-largest cereal firm in the US and owns brands including Great Grains, Golden Crisp and Cocoa Pebbles. Some of the world's biggest names in food, including the UK's Associated British Foods and Italy's Barilla, had been named as possible suitors for Weetabix. Northamptonshire-based Weetabix, which has a royal warrant, was family-owned until 2004, when it was bought by private equity firm Lion Capital. (LON:ASHM). With few other significant new drivers, caution is expected to reign on this morning's openings right across Europe, with London for once not expected to simply take its lead from the US close. The FTSE100 is seen down 10 to 15 points in early trading."
- Barry Gibb, Research Analyst



The FTSE-100 finished Thursday's session 0.29% lower at 7,327.59 whilst the FTSE AIM All-Share index added 0.47% to stand at 946.43. In continental Europe, the CAC-40 finished down 0.59% at 5,071.10 whilst the DAX was 0.38% lower at 12,109.00.
Wall Street
In New York last night, the Dow Jones rose 0.90% to 20,636.92, the S&P-500 added 0.86% to 2,349.01 and the Nasdaq rose 0.89% to 5,856.79.
In Asian markets this morning, the Nikkei 225 had risen 0.35% to 18,418.59, while the Hang Seng shed 0.82% to 24,062.97.
In early trade today, WTI crude had fallen 0.15% to $52.57/bbl and Brent had declined 0.14% to $55.28/bbl.

Weetabix to be sold to US company Post Holdings
UK cereal firm Weetabix is to be bought by US firm Post Holdings for $1.8bn (£1.4bn), its owner has confirmed. Weetabix - made in the UK since 1932 - was put up for sale in January by China's Bright Food, which bought a 60% stake in 2012. Bright's acquisition was the largest by a Chinese firm at the time, but it is believed to have struggled to build significant market share in China. Chinese consumers prefer a hot, rice-based breakfast to cold cereal. While Weetabix doubled sales in China in 2016, the UK still accounts for the majority of its sales. Post Holdings is the third-largest cereal firm in the US and owns brands including Great Grains, Golden Crisp and Cocoa Pebbles. Some of the world's biggest names in food, including the UK's Associated British Foods and Italy's Barilla, had been named as possible suitors for Weetabix. Northamptonshire-based Weetabix, which has a royal warrant, was family-owned until 2004, when it was bought by private equity firm Lion Capital.

Tue, 18 Apr 2017 08:24:00 +0100
Metals prices ignore China GDP FTSE 100 Index called to open -10pts at 7315 holding April rising support at 7300 which could help with a repeat of the overnight attempt to better Thursday’s highs of 7345, a break above which could open the door for another challenge on last week’s 3-week highs of 7400. Bulls are looking for a break above the 7325 highs of the last hour while Bears require a test of 7300 to trouble overnight lows. Watch levels: Bullish 7325, Bearish 7300.

Calls for a negative open come after a mixed return by Asian investors following the long Easter weekend, at odds with last night’s positive close on Wall Street. Geopolitical concerns may be off the boil and safe haven assets off their best, but they continue to simmer be it from a nuclear standpoint on the North Korean peninsula or politically in France and Turkey and across the Atlantic with the US Treasury secretary suggesting Healthcare bill problems will delay tax cuts.

Japan’s Nikkei is positive, although off its best levels as Yen weakness reverses. Australia’s ASX is in the red as commodity prices continue to give up ground to hamper Energy and Miners so watch London peers and FTSE dual listings.

Oil is flat and safe haven precious metals are also off their panic highs. Note also Iron ore dropping to 5-month lows and Copper erasing most of last week’s rebound as investors believe major restocking from Chinese stimulus may now be complete. Said price falls are clearly ignoring Chinese GDP picking up from recent 6.7% lows to hit 6.9% - fastest since Q3 2015 - albeit fuelled by credit and infrastructure investment and a relentlessly booming property market.
US equity markets remained open on Monday as Europe enjoyed an extended weekend, with major bourses closing sharply higher as company earnings reports continue to flood the airwaves. Financials contributed significant gains to both the Dow Jones and the S&P500 ahead of results from banking giants Bank of America and Goldman Sachs today, while the Tech-focused Nasdaq also enjoyed a healthy session, with all three indices +0.9% at the close.

Crude Oil prices have continued to fall back from Wednesday’s highs (Brent $56.65; US $53.75) as rising US production levels continue to err investors. With OPEC mouthpiece Saudi Arabia playing down talks of an extension to the group’s production cuts while warning that the market remains oversupplied, the global consumption barometer remains on the back foot in a tight falling channel.

Gold price, having traded at fresh 5-month highs during the extended Easter break for Europe, has since retraced gains as geopolitical tension eases, subsequently diminishing safe-haven demand into the new trading week. Although the precious metal has recovered from overnight lows at $1281 support, it has been unable to overcome falling highs resistance at $1284. Should geopolitics once again be a driver this week, investors will be looking for a return to last week's highs.

In focus today, as we return from the Easter weekend, will be continuation of US Q2 earnings, especially following last week’s consensus profits beats from JPMorgan, Citigroup and Wells Fargo,   so listen out for results side of midday from Bank of America and Goldman Sachs..

Data this afternoon includes March US Housing Starts and Permits with the former forecast to pull back from Feb’s 4-month high to equal Jan’s print while the latter bounces back to the midpoint of January’s upside surprise and February’s come-down to slightly exceed the 6-month average. US Industrial Production is seen continuing its rebound from Jan's flirt with contraction to trouble Dec’s near 2-year best although Manufacturing may go the other way while Capacity Use improves.

The Fed’s George speaks at the 26th Annual Hyman P. Minsky Conference which will address the implications of the new administration’s “America First” policies, focusing on the outlook for trade, taxation, fiscal, and financial regulation. Note Johnson & Johnson results may move the healthcare sector just before midday while IBM and Yahoo! are likely to move not only Tech but also global markets after the US close and overnight.

Tue, 18 Apr 2017 08:23:00 +0100
VSA Capital Market Movers - Metal Tiger Metal Tiger
Metal Tiger (LON:MTR) has announced that the closing date for the previously announced placement of £4.29m with Sprott Private Wealth has been extended from the 17th April to the 20th April. The placement is subject to certain conditions being met ahead of closing.

We reiterate our Buy recommendation and 4.8p/sh. target price.

Tue, 18 Apr 2017 08:22:00 +0100
Rock n roll and small Caps: URU Metals Mon, 17 Apr 2017 08:48:00 +0100 THE NAKED FUND MANAGER: Platforms are taking over the world Mon, 17 Apr 2017 08:31:00 +0100 Battle of Britain - what do Hurricane Energy’s successes tell us about Scotland’s oil future Mon, 17 Apr 2017 07:34:00 +0100 Dividends don't lie revisited: two new ingredients for the pot but RPS is removed Mon, 17 Apr 2017 06:32:00 +0100