Mining News

ECR Minerals (LON:ECR) has appointed Richard Watts, a mining engineer, as a non-executive director. Mr Watts is currently a Principal Mining Consultant for Turgis Consulting and was formerly also a Principal Mining Consultant for SRK UK. This appointment has now completed the reconstitution of its board of directors. The Company now plans to look at maximising the value of its holdings in THEMAC Resources Group Ltd (TSX-V:MAC), West Wits Mining Ltd (ASX:WWI) and Paniai Gold Ltd (unquoted), divestment of non-core assets, principally its 70% interest in the ACS Asia metal products business and continue the exploration and development of its Sierra de las Minas gold project in La Rioja Province, Argentina, in particular focussing on the El Abra gold prospect.

Shanta Gold (LON:SHG) has announced that it plans a 1000 for 1 reverse consolidation of its Convertible Loan Notes due 2017, to amend the nominal value of the notes (US$25m) held by Computershare.

Vane Minerals (LON:VML) has announced the latest results of its porphyry copper exploration programme in SW USA. Unfortunately the two holes drilled at Peg Leg, New Mexico encountered weak sulphidation and weak to no copper values. The Company is now progressing its next target Railroad also in New Mexico, where drilling has commenced. Meanwhile work is progressing to obtain drilling permits at McGhee Peak where previous drilling indicated the presence of mineralisation and drilling is expected to recommence in late June/ early July.

Premier Gold Resources (LON:PGR), the Kyrgyzstan focussed gold exploration company has released its final results for the 11 months until the end of December, 2011. The focus for the year was on establishing the Company and identifying its first targets. This was achieved through the acquisition of Central Asia Resources, which provided two licences, the Cholokkaindy gold prospect and the Uzunbulak lithium prospect. Fieldwork during the year has now established 4 targets at Cholokkaindy with semi-continuous mineralisation and potentially economic gold grades. The 2012 work programme will include continued trenching at two of these targets, Talbaital and Jarkonush, to further constrain mineralisation and the Company expects to drill 1,500m targeting geophysical anomalies. Trenching will also extend to cover the other two targets at Aksai and Torsai in the east and north east of the licence. As well as its exploration targets, the Company is looking at further acquisitions.The Company finished the year with £919,427 in cash and raised an additional £350,000 in May, 2012 post period.

Kryso Resources (LON:KYS) has announced that its largest shareholder, China Nonferrous Metals International Mining (CNMIM), has agreed to provide a secured loan facility to the Company, which completes the planned debt financing requirement to finance the design, construction, operation and administration of the Pakrut gold mine in the Republic of Tajikistan. The loan will be in two denominations of US$ 10 million and RMB 530 million (approximately US$ 83.5 million). The Company expects to draw down the Loan by 20 June 2012. The US$ 10M loan will be disbursed directly to Kryso's bank account, whereas the RMB530M will be used to enter contracts and pay third parties for the development of Pakrut directly. All repayments will be made in US$ and in equal instalments commencing in November 2014, with the final repayment on 31 May 2017. The loan terms include an annual fixed interest rate of 9% together with a one-off management fee of 0.5%, which is payable upfront. Default interest is charged at 13.5% and the loan is governed by the law of China. CNMIM has also indicated that it intends to exercise its warrants for 73,333,333 shares at 21p per share. This will raise £15.4M for the company and take CNMIM's shareholding to 40.7%. However, the Takeover Panel has confirmed that the company does not fall under the jurisdiction of the City Code on Takeovers and Mergers and so CNMIM does not have to make a mandatory offer under Rule 9 of the Code.

Oil & Gas News

Gulf Keystone (LON:GKP) - Drilling Continues on Sheikh Adi: News that the Company has spudded its second exploration well, Sheikh Adi-2 on the Sheikh Adi block is welcome. Of more interest, however, is the geological characteristics of the northern part of the structure where the well is being drilled; this part of the structure appears to be more tightly folded and therefore GKP believes that it is more likely to have a well-developed system of natural fractures. The short-medium term outlook for shareholders is bolstered by the impressive preliminary resource estimate for the block of 1 to 3 billion barrels of gross oil-in-place as a result of the first exploration well, Sheik Adi-1. The medium to longer term outlook is buoyed by the development strategy for its Kurdistan assets and the remainder of its exploration portfolio. In the news:

• Sheikh Adi-2 will target prospective intervals in the Jurassic formation and has a planned TD of approximately 2,450 metres

• Being drilled in the northern part of the Sheikh Adi structure with the Discoverer-4 rig

• The northern part appears to be more tightly folded

• Preliminary resource estimates for the Sheikh Adi block is 1 to 3 billion barrels of gross oil-in-place (P90 to P10 estimates)

Medi Oil & Gas (LON:MOG) - Year-end results encouraging: Since the restructuring in May last year, the Company has made excellent progress across its portfolio as it tries to restructure both its financial and commercial position. Commencing production on the Guendalina gas field and subsequently entering into a gas sales contract with Repower Italia SpA was a significant achievement. In addition, the 18 month extension of the first exploration phase under the Malta offshore Area 4 Production Sharing Contract and the 3 year extension to the Company's exploration permit BR269 GC should both go some way to rebuilding and consolidating the Company's fortunes as it focuses on unlocking value within its Italian and Maltese assets. 

Oilex (LON:OEX) - Prepares for the commercialization of Cambay field: Today's news that the Company is formulating a drilling programme for the next phases of work at Cambay basin is a significant step towards the commercialization of the prospective basin. The Company has concluded suspension of Cambay-76H well following the problems faced during clean-up operations. Drilling has indicated porous hydrocarbon bearing intervals throughout the horizontal section which bodes well for the commercialization of the structure. It is also worthwhile noting that Cambay-76H well is the first tight reservoir well drilled in India. Oilex has identified six potential Eocene reservoirs and now plans to test the deeper zones in a four well drilling programme. Expect positive movements today. In this news:

• The Company previously announced that operations at the Cambay-76H well were to be suspended as a direct consequence of an apparently poor integrity of drill pipe and potentially adverse consequences of continuing to use this equipment.

• The first stage of work will comprise a well to be drilled from the Cambay-76H pad with the intention of re-entering and maximising the value of the large stimulated rock volume around the 610 metre well bore at Cambay-76H.

• The detailed design and precise location of the well will be finalised once engineering feasibility studies have been completed over the coming weeks and an update will be provided once drilling plans are finalised.

• Following demonstration of hydrocarbon flow from this well, the intention is to proceed with a three well work programme.

• Subsequent phase will be designed to acquire cores, modern wireline logs, reservoir fluid information and production test data that would assist the independent certifier to move contingent resources to reserves, generate sales of oil and gas for local markets as well as evaluating the significant potential of the deeper, tight reservoirs at Cambay Field.

Saints & Sinners: Mining   

Arian Silver (LON:AGQ) have slipped to a very interesting level down here at 16.5p a share, which is a fair way from the recent high of almost 30p. The last few times the shares have been down at this level, October last year and January this year, they have jumped rather aggressively. We will be watching for any signs of another bullish turn around in the stock, as I type the share are 3% higher at 16.75p at the mid-price.

Canada's second-largest copper producer First Quantum (LON:FQM) pushed 9% better to 1161p on renewed bid speculation. Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT) have been touted as possible bidders but we can't see this happening given they have both stated their intention to focus less on growth and more on managing costs. However, Anglo American has also been talked of as a possible interested party. Anglo should have a war chest on selling interests in Chile and we think they are the most likely suspect should a bid arise. Regardless of a bid we think First Quantum offer good mid-term value. They have strong growth projects and are projected to boost EBITDA by 84% over the next three years, according to analysts' estimates compiled by Bloomberg. It plans to more than triple copper production within five years as it starts up mines in Peru, Finland and Zambia.

ATH Resources (LON:ATH) collapsed 22% to 10.25p at the mid-price during early trading after the company said that reduced coal prices continue to impact its margins resulting in further reductions to trading performance expectations, adding that it will defer the planned Glenmuckloch Eastern extension due to the lower coal prices. While demand for coal generally remains strong, international prices have fallen significantly in the past nine months, especially in the past few months. The Board will either proceed or begin final restoration of the current site towards the end of this calendar year. The deferment will have little impact on production levels in the current financial year, but if the Board decides not to proceed at all, volumes would be reduced by 500,000 tons during the following two years.

Aquarius Platinum (LON:AQP) eased another 4% to 71.75p on decent volume after Morgan Stanley started the company at Underweight. The shares have been under a lot of pressure since they announced the underground fire at its Mimosa mine in South Africa has been extinguished and a damage assessment has been made, adding that mining operations are expected to restart by May 28 and that mining output will be at an average of 70% of normal production for about three weeks.

The rollercoaster ride that is Rare Earths Global (LON:REG) jumped 36% to 450p after hitting a recent low of 330p. The shares are still a long way from the 52 week high of 1250p.

After the recent slip from 5p down to 1.875p it was no real surprise to see a few bargain hunters stepping in on a very bullish day in the markets on Botswana Diamonds (LON:BOD) The shares jumped by 13% to 2.125p at the mid-price during afternoon trading.

From the Trading Floor   

Another bullish session in the FTSE 100 today, but the real question is, can we string more than just a one day bonce together before we have another big sell off? As I type the FTSE 100 is 74 points higher at 5340 +1.36% on volume of 437 million shares, which does not show me that people are jumping in feet first believing this rally will continue. The FTSE AIM All-Share Index is 0.29% higher on volume of 487 million shares.

Commodities Corner   

Gold - ↑Trading at $1568, up $8 (+0.56%)

Silver - ↑Trading at $28.29, up 51c (+1.86%)

Copper - ↑Trading at $7572, up $29 (+0.38%)

Zinc - ↓Trading at $1867, down $6 (-0.32%)

WTI Crude - ↑Trading at $90.61, up 71c (+0.79%)

Brent Crude - ↑Trading at $106.19, up 64c (+0.61%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Uranium Resources (LON:URA) has issued a further 14 drill results from its exploration programme at its Mtonya uranium project. Significant eU3O8 intercepts include 397ppm over 1.0m at 170.4m, 460ppm over 4.0m at 170.4m and 329ppm over 3.8m at 73.7m. Significantly, the Company is intercepting higher grade and thicker intersections than previously encountered as drilling intercepts new roll-fronts. To date the Company has drilled 5,400m of its planned 20,000m 2012 drilling programme with three rigs on site and a fourth expected in mid-July. The Company expects it will then have sufficient data to estimate a maiden resource. Mtonya is a classic sandstone-hosted roll-front deposit which the Company believe is amenable to in-situ leaching. It is located 60km south of Uranium One's Nyota project (previously owned by Mantra Resources).

ATH Resources (LON:ATH) has deferred commencement of its planned Glenmuckloch Eastern extension due to falling coal prices. This will have no impact on FY'12 production, but will reduce FY'13-14 by 500kt of coal. The project is an extension to the Glenmuckloch colliery and was approved by the local planning authority in Dumfries and Galloway in June last year in the hope of safeguarding 90 jobs. The Company also stated that the current coal prices will mean that margins have been reduced and it will update the market in its interims to be released in late June.

Caledonia Mining Corporation (LON:CMCL) has issued an update on its progress with indigenisation at its Blanket Mine in Zimbabwe. The Company has signed two new agreements following the signing of the Memorandum of Understanding with the Government of Zimbabwe on February 20, 2012, which will see Indigenous Zimbabweans acquire an effective 51% ownership of the Blanket Mine for US$30.09M, paid through deferred dividends. The first agreement was signed for the sale of 10% of Blanket for US$7.339M to the Blanket Mine Employee Trust; a trust that has been established for the benefit of the present and future managers and employees of Blanket. A second agreement has been signed for the donation of 10% of Blanket to the Gwanda Community Share Ownership Trust, a trust that has been established for the benefit of the local community. As announced last week, Blanket will now make a non-refundable donation of US$1.0M to this trust. The final 16% interest will be to the National Indigenisation and Economic Empowerment Fund and Caledonia has submitted an agreement for this. Further announcements will be made in due course. All these transactions will be vendor financed by Caledonia to be repaid from future dividends from Blanket.Outstanding balances on these loans will attract interest at a rate of 10% over the 12-month LIBOR. Caledonia is the first mine to fully go through the indigenisation process and although the US$30.09M valuation may be viewed as somewhat arbitrary, the funding solution is most effective in providing benefit to indigenous Zimbabweans without providing undue burden on the Company.

Cluff Gold (LON:CLF) has announced the completion of its acquisition of the Sega Gold project from Orezone Gold Corporation in exchange for 11M new shares in Cluff Gold. The project is located 20km north of Cluff Gold's Kalsaka heap leach operation in Burkina Faso, and has a current indicated resource of 450,366oz (8.3Mt at 1.69 g/t) and an inferred resource of 147,344oz (2.9Mt at 1.58g/t). This should provide an immediate bolt on to Kalsaka for limited upfront capex.A preliminary economic assessment of Sega is currently in progress and is expected to be completed later in 2Q'12. An environmental and social impact assessment is also currently underway.

Richland Resources (LON:RLD) has released a 1Q'12 Operational and Sales Update. Total production was 533,400 carats at an average grade of 51cpt. The Company limited sales during the quarter to US$1.5Mm to take advantage of the inaugural Arusha International Gem, Jewellery and Mineral Fair in Tanzania which occurred post period between the 26 -29 April. The Company achieved sales of approximately US$3M at the fair. During the period, Richland also increased its JORC resource to 105Mcts Inferred and Indicated and started bulk sampling at Tsavorite following successful pilot sampling. However, due to delays in achieving a secondary listing on the Dar es Salaam Stock Exchange, the Company has further extended its option to acquire a sapphire project in Australia until the end of August 2012, or later if required, in order to avoid having to submit additional information to the Tanzanian Capital Markets & Securities Authority.

Griffin Mining (LON:GFM) has released further good drill results from at its Caijiaying mine in northern China. Highlights from the 190 diamond drill hole/ 30,244m programme include 37.4m @ 6.55 g/t gold & 4.33% zinc, 35.0m @ 5.23 g/t gold & 4.47% zinc, 25.40m @ 15.50% zinc and 30.00m @ 10.91% zinc. High-grade gold mineralization was identified in underground extensions of the Ju Long, Fu Long, Xiao Long and Qing Long ore bodies. High-grade zinc zones were also intersected within a wider envelope of medium-grade zinc-gold-lead-silver ore. All these results are outside the updated JORC released on Tuesday and should be expected to further increase this. The Company stated that drilling will continue during 2012 to further delineate the mineralisation at Caijiaying.

Baobab Resources (LON:BAO) has released a drilling update from its Ruoni Flats pig iron, vanadium and titanium project in Tete Province, Mozambique. As the drilling programmes in the Ruoni prospect area are nearing conclusion the Company states it has intersected a heavily mineralised package, up to 100m thick, that it believes represents the down-dip continuations to the Ruoni North and Tenge resource blocks. In addition recently completed diamond twin holes have penetrated deeper through the current 159Mt resource block and demonstrate that the mineralised package is substantially thicker than that modelled in the resource estimate. Resource upgrade drilling is on-going at Chitongue Grande, Ruoni North and Ruoni South resource blocks. To date more than 7,500m of diamond and reverse circulation (RC) drilling has been completed at Ruoni Flats and we expect the Company should be able to increase the size of its current resource at Ruoni Flats.

Oil & Gas News

Providence Resources (LON:PVR) Oil and gas zones have exceeded the Company's pre-drill expectations, both in terms of reservoir development and more importantly, oil and gas flow rates; the Company believes that a proposed horizontal well could deliver an initial production of about 12,500 bopd. This will be a significant achievement, and no doubt would establish a platform for explosive hydrocarbon production growth. Today's announcement has further highlighted Barryroe's Basal sands prospectivity, and with further work imminent in order to better quantify any remaining resource potential and hydrocarbon in place estimates in the licence area, investors can look forward to further news as management look to unlock value within this high productivity system. The news should also bode well for San Leon Energy (SLE LN) as the Company has a 4.5% Net Profit Interest in the Licence area.

Leni Gas & Oil (LON:LGO)- Ready to commence drilling operations at Goudron Field in south-eastern Trinidad: Today's news of re-entering and completing 5 wells on the Goudron Field is a positive development. Updates on production and well results provides near term catalyst. Expect positive movements today. In this news:

• Re-enter, clean out and re-complete three wells; GY-190, GY-254 and GY-63.

• A further two wells; GY-66 and GY-200, are also candidates for work in this initial trial phase.

• Rig will arrive at the field over the weekend and will commence work immediately.

Faroe Petroleum (LON:FPM) The Company has taken another step forward towards the monetization of its prospective block resources in the Norwegian North Sea as it successfully commenced drilling on its Clapton prospect. Investors can also be buoyed by management's aggressive and accelerated approach towards the drilling programme which could be the catalyst to creating value for shareholders. In the news:

• Clapton prospect in the Norwegian North Sea (Faroe 40% and operator)

• Good address with Giant fields in close proximity

• Faroe Petroleum's first operated well in Norway

• three high impact exploration wells drilling at the same time; Clapton, Cooper, and North Uist

Wentworth Resources (LON:WRL) Sharper focus: Wentworth has a strong liquidity position following the issue of additional equity and monetization of 4.95% net profits interest from Cove Energy's 8.5% working interest in the Offshore Rovuma Area 1 Concession. It expects to commence drilling operations on the Mnazi Bay and Msimbati gas fields, which is another positive key take-away from the today's announcement. The Company sold its power operations segment in the last quarter to focus on the oil and gas operations. Being fully funded for exploration programmes for 2012 and 2013, we expect traction in the drilling activities across its oil fields in Tanzania and Mozambique.

Saints & Sinners: Mining   

Bumi Plc. (LON:BUMI) Slipped 8% to 400p at the mid-price during afternoon trading after its cracking run yesterday. It was no surprise to see a few short term traders taking a little profit off of the table as the market continued its slide once again. The next major support line I can see is around the 390p to 400p area, so it will be interesting to see if the long term holders, or the day traders look to jump back in on this dip.

Aquarius Platinum (LON:AQP) eased 7% to 77.5p during early trading after the company said Mimosa (50% owned by Aquarius) wishes to advise that all employees have now been safely evacuated from the mine. No injuries have been reported. Details concerning the extent of damage and impact on production will be made available in due course.

Sirius Minerals (LON:SXX) bucked the negative trend in the market today, by pushing 6% higher to 15.625p during early afternoon trading. The company did announce yesterday the appointment of Jason Murray to the board as Finance Director and Chief Financial Officer, adding that Andrew Lindsay has resigned from his executive and board roles but remains a consultant to the company.

West African Minerals (LON:WAFM) jumped 15% to 66.5% on decent volume after the company announced late yesterday afternoon that it reached an agreement to acquire the 5% interest not previously in its control in Compagnie Miniere du Cameroun SA, or CMC Cameroon. Following the acquisition, CMC Cameroon will become an indirect wholly-owned subsidiary. On completion of the acquisition WAFM will issue to the vendors a total of 18.5 million new ordinary shares representing approximately 6.7 per cent. of the enlarged share capital. Based on 21 May closing price of 54.75 pence, the shares are valued at approximately £10,128,750. Completion is expected within 10 days. The principal vendor is Colosseum Holdings Ltd.

Vane Minerals (LON:VML) pushed 10% higher during early trading after the company said it has reached an agreement with the holders of its convertible loan notes over repayment of the notes. Currently has two convertible loan notes outstanding, the first for GBP1 million issued to Geiger Counter Limited; and the second loan, amounting to GBP500,000, issued to City Natural Resources High Yield Trust PLC. Principal points of the agreement are, Will repay GBP500,000 on May 31, out of existing cash resources, to settle the loan with City Natural Resources. Will carry forward a loan note of GBP1 million, issued to Geiger Counter. Maturity date for the new loan note is May 31, 2017. New loan note will continue to attract interest at 8% per annum, payable every six months. New loan note is convertible by the holder, at any time, into 80 million ordinary shares in Vane at a price of 1.25 pence a share.

Eurasia Mining (LON:EUA) eased 15% to 0.50p before settling back at 0.60p, down 7.5% by the end of lunch. The company have been slipping ever since the company announced back on the 4th of April that it issued 288.5 million ordinary shares to Queeld Ventures Limited at a price of 1 pence per share, raising GBP2.9 million. Placing will help the company to take the West Kytlym project to production and to develop other projects. Following the issue of shares, Queeld Ventures will hold 29.9% of the total issued share capital of the company.

From the trading floor   

Comments from former Greek prime minister Lucas Papademos late last night was the reason for the aggressive market sell of today, pushing the FTSE 100 Index 93 points easier as I type to 5310 (-1.75%) on volume of just over 400 million shares, which is thin volume for this time of day given the move in the market. The FTSE AIM All-Share index was 1.12% easier also on thin volume of just over 450 million shares.

Commodities Corner   

Gold - ↓Trading at $1559, down $8 (-0.49%)

Silver - ↓Trading at $27.66, down 45c (-1.59%)

Copper - ↓Trading at $7595, down $95 (-1.23%)

Zinc - ↓Trading at $1872, down $30 (-1.51%)

WTI Crude - ↓Trading at $91.40, down 43c (-0.47%)

Brent Crude - ↓Trading at $107.10, down $1.30 (-1.21%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Anglo Asian Mining (LON:AAZ) has released its FY'11 final results. Overall gold production was down to 57.068koz (67.267koz FY'10), and costs were up to US$448/oz (US$358/oz FY'10). However, the rising gold price (US$1,573/oz vs. US$1,241/oz) meant revenues (US$83.8M) and profit before tax (US$31.6M) were up strongly. Cash at year end was US$9.9M with total debt US13.1M (net debt US$3.2M). The Company operates its sole producing Gedabek on a production sharing arrangement with the government of Azerbaijan and it currently receives 87.5% of all metal produced until it has recovered all its costs. This is scheduled to continue until the end of the year; however, if the government approves the construction of an agitation leach plant announced earlier this month this period will be extended until the additional US$52M capex is recovered.

Aquarius Platinum (LON:AQP) reported a fire overnight at its jointly owned Mimosa operation in Zimbabwe, caused by the conveyor belt in the main decline igniting.The fire has been contained and thankfully the Company has now reported that all employees have now been safely evacuated from the mine and no injuries have been reported. At this stage, the extent of the damage and impact on production cannot be ascertained.

Gemfields (LON:GEM) has released a 3Q'12 market update with production (4.9Mcts) and grade (236cpt) both up on the previous quarter. Production costs per carat were down to US$0.85/ct, although rock handling costs rose to US$3.73/t as the material mined is harder than previously encountered. All cash costs exclude waste stripping costs which the Company has capitalised since July last year. The Company ended the quarter with US$46.6M in cash and receivables having received the US$21.4M proceeds from the March auction in Singapore. The next auction will be for lower quality rough emeralds and will be held in Jaipur in June. During the quarter Gemfields signed a new US$9.3M debt facility with Barclays Bank Zambia to contribute towards the waste removal programme at Kagem. This programme has impacted gemstone production, but the Company expects production to continue to improve in the coming months.

Horizonte Minerals Plc (LON:HZM) announced the signing of a Heads of Terms with Magellan Minerals Ltd. The Heads of Terms provides Magellan Minerals with an option to earn up to a 70% interest in the Company's Agua Azul gold property located in the Carajas region of Brazil. Magellan has the option to earn an initial 51% interest in Agua Azul for a total cash consideration of US$320,000, together with a minimum exploration expenditure of US$1,500,000. Upon earning a 51% interest, Magellan has the option to increase its ownership in Agua Azul to 70% upon completion of a Pre-Feasibility Study together with a further cash payment of US$500,000 to Horizonte. If Magellan has earned to 70% of Agua Azul, both companies will contribute to ongoing development costs as per their respective interests. If HZM's interest drops below 10%, its interest will be converted to a 1% net smelter royalty on any production arising from resources discovered within the Property area.

Solomon Gold Plc (LON:SOLG) provided an update to the market on the Rannes Project resource estimate. The latest resource estimate totals 18.7 million tonnes at 0.5g/t gold and 16.9g/t silver (0.9g/t gold equivalent) for 550,000 gold equivalent ounces in the Indicated and Inferred category. This is down from the previous Inferred resource of 25.5 million tonnes at 0.6g/t gold and 15.9g/t silver (1.0g/t gold equivalent for 812,000 gold equivalent ounces), but now includes resources in the higher confidence Indicated category.

Vane Minerals (LON:VML) has restructured its convertible loan notes from two funds managed by New City Investment Managers, due to be repaid this year. The Company will repay the £500k loan note with City Natural Resources High Yield Trust due at the end of September, at the end of the month. The Company will also carry forward the £1M convertible from Geiger Counter Limited due at the end of May. The new loan note will mature on 31 May 2017 and carries an 8% coupon, payable every six months. The new loan note is convertible by the holder, at any time, into 80 million ordinary shares in VANE at a price of 1.25p. The Company may also repay the loan note early in the event that either the share price is equal or greater than 2.5p or after three years, the share price is equal or greater than 1.25p. If converted the maximum dilution would be 15.3% of the enlarged share capital.

Oil & Gas News

Roxi Petroleum (LON:RXP) The Central Asian oil and gas company took another step towards the monetization of its asset base with the news that the NK7 well has not only reached TD, but encountered oil bearing zones. With this being the first of 6 wells expected to be drilled across the Group's assets before the end of the year, shareholders can look forward to a flurry of drilling updates as the Company looks to unlock value. In the news:

• TD of 1,360 metres

• Oil bearing zones in the lower Cretaceous and Upper Jurassic

Cove Energy (LON:COV) "…the only way we see this changing is if there is a firm hostile counterbid made directly to investors" is a snippet from one of our recent morning notes, and today's announcement hasn't really come as a surprise especially following the recent news of that second discovery at Golfino. The find further validated the Company's hypothesis of the regional geology, and has clearly sharpened the focus of Cove's bidding parties. In the news:

• PTTEP and Cove have reached an agreement for each Cove hare held, 240 pence in cash

• The Acquisition values the entire issued and to be issued share capital of Cove at approximately £1,221.4 million

• The directors of Cove will unanimously recommend that Cove Shareholders accept or procure acceptance of the Offer

• The Acquisition is conditional

Aurelian Oil & Gas (LON:AUL) - Release of new Competent Person's Report: RPS has released an updated CPR for Aurelian. It estimates net 2C contingent resources at 379 bcf for the Siekierki field and net 17.3 bcf from the remaining Poland and Romanian fields. It estimates €364mm post-tax Net Present Values (NPV) of the Company's Contingent Resources at 10% discount rate.

Zhaikmunai (ZKM) The Company reported a 4x increase in hydrocarbon production to 33.5 mboed and expects further increases in volumes with the commencement of three additional wells. The exploration programme for 2012 looks upbeat as it plans to drill a total of 11 new wells of which 2 will be new exploration / appraisal wells and the remaining 9 production wells. Updates on production and well results provides near term catalyst. Expect positive movements today. In this news:

• Production:

o More than five-fold YoY increase to 3,053,210 boe total

o Average Q1 2012 daily production of 33,552 boepd

o Average April 2012 daily production of 37,237 boep

• Financial:

o Close to four-fold YoY increase in EBITDA to US$110.9 mm

o Over four-fold YoY increase in Net Income to US$ 48.4 mm

o Over three-fold YoY increase in Revenue to US$163.4 mm

o Further strengthening of the Balance Sheet to US$144.3 mm in cash

• Targets for Q2 and 2012:

o Connection of one further gas condensate well (Well #218) to continue bringing GTF to full design capacity in Q2

o Connection of two crude oil wells (Wells #116 and #67) to bring crude oil production above 7,500 boepd in Q2

Saints & Sinners: Mining   

Bellzone Mining (LON:BZM) surged 24% to 22.5p on huge volume after the company said the government of Guinea has approved the startup of commercial production at its Forecariah iron ore project, a joint venture between Bellzone and China International Fund Ltd. The intention is to mine and export the initial 2 million tons of high grade material identified during the first year of operations, with the aim of achieving the design capacity of 4 million tons annually by the year end. Post the initial 2 million tons of high grade material, the low grade iron oxide will be upgraded to produce a +58% pure iron product, said the company. "Approval for Forecariah is a landmark event for Guinea and the joint venture partners. The ability to bring a greenfield asset into production, build a trans-shipping port and haulage road in under 15 months is a significant achievement," Bellzone chief executive Nik Zuks said. Commercial offtake agreement negotiations are underway, Bellzone added.

Bumi (LON:BUMI) jumped 13% to 435p on decent volume after Barclays initiated coverage at overweight with a price target of 565p. The group is essentially a highly-levered thermal coal business in Indonesia and has a very large resource base close to the coast, which is regionally well placed to serve the markets of China, India, South Korea and Japan, says Barclays. "We believe that under new management the company can continue to ease its debt burden, push through a strong expansion scheme and improve corporate governance," adds Barclays.

Premier Gold Resources (LON:PGR) jumped 6% to 0.47p at the mid-price during afternoon trading, after hitting an intraday high of 0.5575p, on huge volume of well over 19 million shares which is over 5 times the average daily volume for the name. Could this volume be a seller finally being cleared? We will be looking for any updated holdings announcements over the coming sessions.

Ncondezi Coal (LON:NCCL) jumped 8% to 37p during early trading after the company said it is restructuring its senior management team, replacing its non-executive chairman and promoting the current chief operating officer to chief executive officer. Michael Haworth, a non-executive director of Zanaga Iron Ore Co. Ltd. (ZIOC.LN) and a director of Strata Ltd., has been appointed to the Ncondezi board as non-executive chairman. Haworth will replace Richard Stuart, who will remain on the board as a non-executive director. Nigel Walls, currently chief operating officer, has been promoted to CEO and will join the board as an executive director. Walls replaces Graham Mascall, who will become a non-executive director. Paul Venter, a mining, power generation and transport industries veteran of 39 years across Africa, Mongolia, China and Russia, has been appointed as chief operating officer. Ncondezi noted that during his recent tenure as vice president of energy operations at Prophecy Coal Corp. (PCY.T), Venter was instrumental in the successful commissioning of the Ulaan Ovoo coal mine in Mongolia into production within six months after the acquisition of the asset. "With the [definitive feasibility study] progressing well and on track for completion during the third quarter, now is an appropriate time to restructure the management in preparation of the company's next phase, the financing and development of the Ncondezi Project to production," outgoing CEO Mascall said, adding that the feasibility study on a coal fired power plant remains on track for completion during the third quarter.

Aquarius Platinum (LON:AQP) were active intraday after the company said a fire overnight at the jointly owned Mimosa operation in Zimbabwe has been contained. The majority of the 75 workers stuck in underground due to poor visibility because of the smoke are out and about eight still in there will be out soon, an Impala spokesman said. The fire started when the conveyor belt in the main decline caught alight, but has been contained. Impala said there are two other smaller conveyer belts that can be used while the mining team assesses the overall damage. Impala wouldn't give a figure for how much output will be lost but said some mining is continuing. The Mimosa mine is a 50-50 joint venture between Aquarius and Impala. The mine produced 104,900 troy ounces of platinum in 2011 and employs 1,796 people, including contractors.

African Copper (LON:ACU) slipped 11% to 1.875p at the mid-price during early trading after the company said it has stopped producing copper concentrate after the failure of a crucial piece of machinery at the milling plant of its flagship Mowana Mine, but noted that all other mining activities, including drilling, load and haul, and ore transportation are expected to continue to plan. The miner said the failure of a pinion shaft--part of the gearing assembly--at the milling facility caused the production halt and said that concentrate production will remain suspended until a replacement is found, but didn't give a timeframe.

North River Resources (LON:NRRP) eased 4% to 1.125p on decent volume after the company reported a 61% narrowed pretax loss for 2011, and said that it will mainly focus on advancement of the Namib Mine and Malachite Pan during in 2012. Total administrative expenses for the year ended Dec. 31, 2011, GBP1.2 million (2010: GBP6.0 million). Exploration expenditure £1.7m (2010: £1.4m). Pretax loss GBP2.9 million (2010: loss GBP7.4 million). Diluted loss per share 0.43 pence (2010: loss 1.62 pence). Group cash and cash equivalents GBP3.5 million (2010: GBP3.4 million). Directors view the conceptual production rates of 250,000 tons of ore per year from the Namib Mine and production rates of 8,000 tons of copper per year from Malachite Pan as credible target production levels, and planning is progressing on this basis. Scoping Study for the Namib Mine is underway. Similar study on Malachite Pan is planned to commence in 2012, pending further drilling results.

From the trading floor   

The FTSE 100 continued its bullish vein of form once again today, as a punters headed for a little risk play to try and recapture some of the losses made during last week's bloodbath. The main index was up 63 points (+1.21%) to 5368 on volume of just over 450 million shares going into the US open. The FTSE AIM All-Share Index was 1.47% higher on volume of just over 686 million shares.

Commodities Corner   

Gold - ↓Trading at $1581, down $11 (-0.71%)

Silver - ↓Trading at $28.31, down 14c (-0.54%)

Copper - ↑Trading at $7741, up $38 (+049%)

Zinc - ↓Trading at $1901, down $1 (-0.02%)

WTI Crude - ↑Trading at $91.89, up 2c (+0.04%)

Brent Crude - ↓Trading at $108.72, down 9c (-0.08%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Griffin Mining Limited (LON:GFM) announced that a new JORC reported Mineral Resource Estimate for Caijiaying has been finalized. The new resource for Zone II and Zone III, reported at a zinc cut-off of 1%, totals 51.2Mt at 4.02% Zn, 0.43% Pb, 24.9 g/t Ag and 0.56 g/t Au. This represents a 32% increase in the resource from 38.6Mt. An application for a further mining licence will be made during 2012 which is designed to ensure that all the known mineralisation covering Zones II and III and the contiguous area between them will be covered.

Landore Resources Limited (LON:LND) reported its latest results from the drill campaign on its B4-7 deposit of the Junior Lake Nickel Project located in Ontario, Canada. Highlights include 30.08 metres at 0.74% nickel, 0.45% copper, 0.07% cobalt, 587ppb palladium, and 174ppb platinum. Drilling continues on the western section of the B4-7, scheduled for completion Q3 2012.

Mariana Resources Ltd (LON:MARL) announced that a 3,500m diamond drill programme has commenced at its Las Calandrias project in the Santa Cruz Province of Argentina. This campaign will test new targets identified adjacent to, below and outside the limits of the current Calandria Sur initial resource estimate. The programme will serve to validate the geological model which has been revised through the compilation of detailed surface mapping, trench and outcrop channel sampling, re-sampling of previous drill core and detailed ground magnetics.

North River Resources plc (LON:NRRP) announced its results for the year to 31 December 2011. The Group recorded a comprehensive loss of £2.99 M, down from a loss of £7.31 M the previous year. The Group has £3.7 M in cash.

African Copper (LON:ACU) reported that the Ball Mill pinion shaft at the Company's Mowana Mine facility in Botswana failed last Sunday and the resulting damage has rendered the Ball Mill inoperable until a replacement is installed and has resulted in the immediate cessation of the production of copper concentrates. The pinion shaft was due for replacement in early June and so a replacement was ordered ten months ago and was due to be delivered on 5 June anyhow. The mill will be out of operation for at least 12 days and a further announcement will be made in due course, once management can confirm a restart date and quantify the financialeffects of the incident.

Ncondezi Coal Company (LON:NCCL) has made several board changes with Richard Sturart (Chairman) and Graham Mascall (CEO) stepping down to become non-executive directors, Michael Haworth appointed non-executive Chairman and Nigel Walls moving from COO to CEO. Paul Venter has now been appointed COO. With the DFS expected to be completed in 3Q'12, the management changes have been made ahead of the Company seeking financing for the project and bring more hands-on operational management into key positions.

Orogen Gold (LON:ORE) has commenced its Phase 1 drilling programme at its Deli Jovan project in eastern Serbia. A total of 7,500m of diamond drilling will be completed to confirm further lateral and depth continuity on the mineralised structures discovered at Deli Jovan. As previously announced, the initial focus will be at the previously undrilled Gindusa mine prospect, where the most promising results were returned from the underground mapping and sampling programme, which included the identification of four gold- bearing mineralised structures in an 80m wide shear corridor. The drill programme is expected to last 6 months. In addition, a trenching programme is now in progress to test the sources of shallow gold soil anomalies discovered in 2011, which the Company hope will identify further drill targets for later in the year.

Highland Gold Mining (LON:HGM) has released the results of a JORC compliant resource audit carried out by the independent consultancy IMC Montan at the Sarytube prospect which is part of the Company's Unkurtash project in Kyrgyzstan. The audit results increases previously reported JORC compliant gold resources for the Unkurtash project by 1.1 Moz to a total of 3.0 Moz and improves the Company's total mineral resource base as recorded as at 31 December 2011, by another 10% to 12.2 Moz of gold. However, there is no indication in the announcement why IMC have increased the resource and what parameters they changed in the resource estimate.

Oil & Gas News

Ithaca Energy (LON:IAE) Following the announcement in Q1'12 of the Company's interest in the Carna discovery, today's news on the completion of the transaction is welcome. Shareholders will now be looking forward to further news on the proposed accelerated development studies of the asset. In the news:

• Transaction completed

• Completion results in Ithaca increasing its position in the discovery to 32% from 16%

• The Company will become Operator with immediate effect

• Preliminary plans: to submit a Field Development Plan before the end of 2012

Longreach Oil & Gas Limited (CVE:LOI) Significant strides have been made in advancing the Company's programme, and with a healthy balance sheet, Longreach has retained flexibility to make decisions based on the best interests of its shareholders, rather than necessity. With a better balanced portfolio of exploration assets, the Company is in an increasingly better position to start to leverage from its acreage positions and, with the work completed to date, to advance its prospect inventory and unlock the potential within its asset base. 2H 2012 looks even more exciting as the Company has scheduled an active work programme to monetize its large reserve base in Morocco. In the news:

• Financial:

o Cash position as at March 31, 2012 of CND$9.0m (CND$10.5m as at December 31, 2011). Working capital as at March 31, 2012 of CND$6.8m (CND$7.4m as at December 31, 2011)

• Operational:

o Sidi Moktar. Longreach is in the process of completing extensive seismic reinterpretation studies

o Foum Draa / Sidi Moussa. The farm-out process remains underway

o Tarfaya licence: Processing of the new 2D seismic is currently underway and nearing completion.

o Zag Basin Onshore. The shooting of 2D seismic was completed in January 2012, and the data is currently being processed

• Management:

o Ronald Lansdell and Dr Mehdi Ali were appointed Vice President Exploration and an advisor to the Board respectively on May 14, 2012

Caza Oil & Gas (LON:CAZA) The Company continues to make good progress across all blocks in southeast New Mexico. It has commenced preparations to drill the initial wells at Forehand Ranch, Lennox and Copperline prospects. Positive updates on the drill results will be the key share price driver in the near term.

Mining News

Alexander Mining plc (LON:AXM) announced that the market value of its ordinary shares has fallen below their nominal value of 10 p and as a result, the Company is precluded from issuing new shares at or around their current market value, meaning any opportunity to raise equity finance is closed. Therefore it is requesting approval from its shareholders for a capital re-organisation whereby each ordinary share of 10 pence each will be divided into 1 new ordinary share of 0.1 pence each and 1 deferred share of 9.9 pence each. The Deferred Shares will not be admitted to trading on AIM, will have only very limited rights on a return of capital and will be effectively valueless and non-transferable. It is intended that, in due course, all the Deferred Shares will be re-purchased by the Company for an aggregate consideration of GBP1 and cancelled.

Ariana Resources plc (LON:AAU) reported drilling results from its Red Rabbit Gold Project in Western Turkey. The highest grades ever recorded were returned from the Kiziltepe deposit including 12.1m @ 13.1 g/t Au + 187.6 g/t Ag (16.5 g/t Au equiv.). Exploration drilling on the Arzu North vein system returned grades of 34m @ 1.04g/t Au equiv., 7.6m @ 7.60g/t Au equiv., and 5.8m @ 5.71g/t Au equiv.

DiamondCorp plc (LON:DCP) announced that its subsidiary, Lace Diamond Mines, has entered into a loan funding term sheet with the Industrial Development Corporation ("IDC"). Under the terms of the loan, IDC has agreed to make a loan available to Lace Diamond Mines to the value of R280 million (approximately $33.6 million), subject to the satisfactory conclusion of due diligence. The term of the loan is expected to be 7 years and will attract an interest rate of 2% over the South African Prime Rate (which is currently 9%). The debt financing will provide over 98% of the estimated capital required to establish a block cave development on the 47 level at the Lace mine, including underground development and purchase of mining equipment.

ECR Minerals plc (LON:ECR) announced drilling results from its El Abra prospect within the Company's Sierra de las Minas gold project area in La Rioja Province, Argentina. Assay results have now been received for all significant mineralised intersections of the recently completed drilling programme with the best overall intersection of 3.9m at 11.6g/t Au in hole 9, including 0.2m at 109.1g/t Au. The mineralisation remains open along strike and down dip. The Company is planning further drilling at El Abra in order to better define the mineralisation encountered.

Metals Exploration (LON:MTL) released its annual financial report from the end of December, 2011. Since the end of the year, the Company has been in discussions for debt finance for its Runruno gold/ molybdenum project in the Philippines. Due diligence has now been completed and legal documentation in in progress. The early works programme by local contractors has already begun, with development of the processing plant pad and construction infrastructure and construction of the camp and office buildings about to start. Leighton Contractors (Asia) Limited were issued a letter of intent last year to design and construct the Runruno processing plant subject to availability of debt funding at a guaranteed maximum price of US$95.1M (out of a total capital cost for the entire project of US$167.8M). The Company hopes to make an announcement concerning the debt finance in the next couple of weeks, with construction then likely to start in 2Q/3Q'12 and gold production in 4Q'13.

Stratex International Plc (LON:STI) announced results from its on-going channel-chip sampling on the Pandora epithermal gold vein in the Oklila Exploration Licence in Djibouti. Highlights include 20.35 g/t Au over 1.90 metres, 11.66 g/t Au over 3.00 metres, and 13.90 metres @ 5.35 g/t Au.

Vatukoula Gold Mines (LON:VGM) released a mixed bag set of Half Year results. Total ore processed was up 2% to 238,126t with average grade increasing 9% to 4.77g/t. However, total recoveries fell to 80% meaning actual gold production was flat at 30,092oz. Revenues were up 21% to £30.383M as average realised gold price rose 26% to US$1,328/oz, but this was negated by cash costs which rose 26% to US$1,420/oz. Heavy rainfall in January and March impacted access to the mine and as a result third quarter gold sales will be lower than expected.

Oil & Gas News

Matra Petroleum (LON:MTA) Today's statement marks what we believe to be the end of a transition period for the Company, with the imminent departure of Peter Hind, and the start of what should, in our opinion, be a period of aggressive growth. Since subscribing new equity into Matra, Maxim Barskiy has been actively formulating and subsequently implementing a wide reaching strategy for the Company, and recent news demonstrates Barskiy's desire to accelerate the new strategy as the Company looks to open up its asset base. These are exciting times for Matra, and at this stage we are reiterating our BUY recommendation and 3.9p price target. In the news:

• Peter Hind has resigned as a director of the Company with immediate effect

• Appointment of Maxim Barskiy as Chief Executive of the Company with immediate effect

Red Emperor (LON:RMP) In exercising its option to participate in the drilling of the Shabeel North well, the Company has taken a significant step towards monetising the resources within the large structure in Puntland. Ahead of spudding of the Shabeel North well and the testing of the Jesomma sands to confirm the potential of the block, we are reiterating our BUY recommendation and 65p price target. In the news:

• Exercised its option to participate in the drilling of the Shabeel North well, scheduled to be spud in the first week of June

• Red Emperor maintains its 20% Participating Interest in each of the Dharoor Valley and Nugaal Valley PSAs

San Leon Energy (LON:SLE) -Awarded Praszka Concession in Carboniferous Basin of Poland: The award of the Praszka Concession further expands San Leon's presence in the unconventional gas play in the Carboniferous basin, which we believe is positive given the successful drilling of Siciny-2 well earlier this year. With the award of new licence, San Leon has become adominant player in the basin. We will wait for the announcement of the plannedexploration programmme for the new concession.

Chariot Oil & Gas (LON:CHAR) - To test Nimrod prospect in Southern Block 2714A, Namibia: Today's news of contracting a rig for drilling the exploration well on the highly prospective Nimrod prospect in Southern Block 2714A, Namibia, bodes well for the share price. The Company is advancing with its drilling programme; this will be the second well in Chariot's 4 to 5 exploration well programme for offshore Namibia. In this news:

• Consortium has reached an agreement with Ocean Rig UDW Inc. to use the Ocean Rig Poseidon drill ship to drill the Kabeljou (2714/6-1) well on the Nimrod prospect.

• Nimrod prospect is located in the Orange Basin in Southern Block 2714A where Chariot has a 25% equity interest.

• The Kabeljou well is expected to take approximately 2 months to drill.

• The drilling location is 77 km offshore Namibia in 360 metres of water with an estimated total drilling depth of 3,100 metres true vertical depth subsea ("TVDss").

Leni Gas & Oil (LON:LGO) - To commence re-development of the onshore Goudron field: Today's news is positive for the valuation and provides an opportunity to grow reserve base and improve financials. The Company has planned a 3 stage strategy for the re-development of the block. In the near term, it plans to start with the working over of up to 50 existing wells, followed by drilling of new wells and undertaking a water flood programme in the final stage. 2P reserves are estimated at 8.0mm bbl and significant resource addition is expected through hydraulically fractured wells and water flood scheme at later stages. We believe the results of the workover wells will be the key share price driver in the near term.

Ncondezi Coal Company (LON:NCCL) has signed a Framework Agreement with the Ministry of Mineral Resources of the Republic of Mozambique over the Ncondezi Coal Project. The agreement is a statutory requirement as part of the due process in applying for a Mining permit, the timeline for which will be finalised once the DFS has been completed in 3Q'12.

Mwana Africa (LON:MWA) has sold 15% of its Freda Rebecca Gold Mine in Zimbabwe, subject to receiving approval from the IDC, the debt provider to Freda Rebecca. The sale was a requirement following the mines acquisition in 2005 and the stake will be purchased by Freda Rebecca Gold Mine board member, Kenneth Musanhi for US$405,000.

Condor (LON:CNR) has released metallurgical test work results from two 25kg samples, grading 13.9g/t and 17.2g/t, from its La India Gold Project in Nicaragua. The test work included gravity separation, cyanide leach, flotation, gravity with cyanide leach and finally gravity followed by flotation. The best results were obtained from a combination of gravity concentration and cyanidation of the gravity tails with total recoveries of 90.4% and 95.9% from the two samples. The Company notes that the samples are from artisanal miners stockpile and may not be representative of the ore fed into a commercial plant. Condor currently has a JORC resource of 1.62Moz @5.6g/t at La India, with 264Koz @7.1g/t in the indicated category.

Anglo Asian Mining (LON:AAZ) has agreed a further US$7.5M loan from the International Bank of Azerbaijan to fund the early stages of construction of an agitation leaching plant to improve gold recoveries at the Company's flagship Gedabek gold/copper/silver mine in Azerbaijan, which the Company aims to commission in 2H'13. The loan has an annual interest rate of 12% on funds drawn payable quarterly, with repayments made quarterly over 3 years, 2 years after each tranche of funds is drawn down. There are no penalties for early payment. The Company is in advanced discussions for additional debt funding.

Sunrise Resources (LON:SRES) has released its 1H'12 Report. The Company reported a loss of £743,616 for the first 6 months, up from £405,112 in 1H'11. The bulk of this is due to impairments to net assets of £585,832, with only £33,270 spent on exploration work (pre-licence reconnaissance work). The impairment mainly relates to the expenditure undertaken on the surrendered Long Lake project. In February the Company raised £600k before expenses which it plans to use to advance the Derryginagh white barite project (used as an industrial filler) in in south-west Ireland and the Cue Kimberlite project in Western Australia, where an Aboriginal Heritage Survey is currently being carried out, prior to drilling which should allow a preliminary evaluation of diamond content and quality.

Amur Minerals (LON:AMC) has released further metallurgical test results for its Kun-Manie project in the far east of Russia. Results in the SGS studies indicate there is potential to reduce the magnesium oxide (MgO) content captured within the concentrate product from 16.0% to 11.5% over life of mine. As MgO would be a smelter penalty it offers potential cost savings of US$76.2M. As previous SGS metallurgical test work on the MgO was limited, the Company requested additional MgO analyses be conducted on each of the 24 concentrate samples generated during the earlier metallurgical work programme.

Tertiary Minerals (LON:TYM) has released its 1H'12 results. The Company reported an interim loss of £190,469, slightly up from the £145,524 in 1H'11. Of this only £7,838 in pre-licence (reconnaissance) costs, with the rest representing administration costs of £185,009. At Storuman, Sweden, the Company is progressing a PFS for a 100ktpa acid grade fluorspar project. The PFS is expected to be completed in early 2013. At Lassedalen, Norway the Company expects Wardell Armstrong International to complete a technical and economic scoping study in 3Q'12. Lassedalen currently has a JORC resource of 4Mt @ 25% fluorspar and the Company plans a follow up drilling programme post the scoping study results. The Company currently has cash and equivalents of £764,816 and will require a comparatively sizeable influx of cash if it is to progress on all fronts.

Oil & Gas News

Heritage Oil (LON:HOIL) - IMS; Success continues at Miran Field: The Company has reported that Miran West-3 appraisal well has successfully appraised main Jurassic reservoir intervals which are the primary targets of this well. The estimates are for 50 MMscf/d of wet gas and 1,000 bbl/d of condensate when put in production. The success of the Miran West-3 well continues to de-risk the highly prospective Miran structure and re-confirms the presence of gas bearing fracture networks. Miran East-1 exploration continues to make good progress; it encountered oil shows while drilling in the Upper Cretaceous, confirming communication of East and West structures. Heritage's short-medium term outlook is bolstered by the development of the Zapadno producing field in Russia and ongoing appraisal and exploration activities on the Miran structure, while the medium to longer term outlook is buoyed by the development strategy for its Kurdistan assets and the remainder of its exploration portfolio. We are reiterating our BUY recommendation and 315p price target. In this news:

• The Miran West-3 well was drilled to a total depth of 3,528 metres and the primary target of the Jurassic gas reservoir was successfully tested. The well is being suspended pending completion as a production well.

• Well testing of the main Jurassic reservoir resulted in a constrained flow of up to 22 MMscf/d of wet gas with a yield of 20 bbl/MMscf of 55˚ API condensate

• The Miran East-1 well is currently at a depth of 2,020 metres.

• Operations on Miran East-1 well are on schedule and drilling is expected to take a further five months

• Tanzania work programme commenced in the recently awarded Kyela and Rukwa licences with the acquisition of a high resolution gravity survey, following which a seismic programme is planned

• Production for the first quarter 2012 averaged 605 bopd, an increase of 40% on the same period in the prior year

• Cash position of approximately US$154 million, excluding amounts related to the Ugandan tax dispute, as at 31 March 2012

Range Resources (LON:RRL) - Open Briefing Lifts the Lid…Just a Crack: Range Resources' Open Briefing, has provided more colour on the background to yesterday's announcement. So, now we know that internally the partners are talking about volumes between 70 - 130mm bbl, and that they are waiting to see if the flow rate will be commercial. As with yesterday, we are reiterating our BUY recommendation on RRL (Target Price 27p) and RMP (65p).

Volga Gas (LON:VGAS) - Operational Update: News that the Company has concluded a series of production tests on well #30 on the VM field, which should add low cost production capacity, is welcome. Of more interest, however, is the imminent upgrade in production from the Dobrinskoye field following the commencement of a sidetrack. We will keep looking towards the next few months to see how operations progress on both of these operations. In the news:

• Well #30 on the VM field flowed at a rate of 161,890 cubic metres per day (approximately 5.7 million cubic feet per day)

• Potential reserve additions are expected to be modest

• However, the workover of the #30 well provides the Company with a low cost addition to production capacity when full time production from VM commences

• Commencement of drilling operations on a sidetrack of the Dobrinskoye #22 production well

• Completion of these operations are expected to add significantly to current production

• The H2S extraction progressing as expected

TXO (LON:TXO) - GBG gets a lift: It is still early days for TXO but it certainly seems that progress is being made to implement the new investing policy, and this further investment into GBG adds near to medium term cash flow to the equation. In the news:

• TXO makes an unsecured loan of £49,000 to GBG

• This takes TXO's total retained investment in GBG to £961,500

Mining News 

Alexander Mining plc (LON:AXM) reported that it has signed an agreement with Metalvalue Ltd. for the use of the Company's mineral processing technology.Metalvalue is a private business focused on the commercialisation of leading edge technologies in the natural resources industry, including in the iron ore beneficiation and steel business. Under the Agreement, which has a twenty year term (the 'Term'), Metalvalue has been granted a non-exclusive and non-transferable licence to use and sub-licence the Leaching Technology.For saleable metal product obtained from processing using the Leaching Technology, Alexander will receive a gross sales royalty based on normal industry practice. It is the intention that Metalvalue will identify new targets for the Leaching Technology and will assist in bringing these into production, thereby creating a new royalty stream for Alexander.

Antofagasta plc (UNDER REVIEW) (LON:ANTO) has released its unaudited results for the three months ended 31 March 2012. 162,900 tonnes of copper was produced in the quarter, a 25.5% increase on the 129,800 tonnes produced in the three months ended 31 March 2011. This was mainly due to the impact of Esperanza as well as increased production at El Tesoro due to processing material from the higher grade Mirador pit. Nevertheless, there was a 12.9% decrease in copper production compared with Q4 2011, mainly due to planned maintenance and expected lower grades at Los Pelambres and lower throughput at Esperanza. 63,500 ounces of gold were produced during the quarter. The realised price in the period was 429.6 cents per pound for copper and US$1,703.5 per ounce for gold. Group revenue in the quarter was US$1,762.1million compared with US$1,269.0 million in the same period in 2011. Group EBITDA was US$1,099.4 million, compared with US$811.9 million in the first three months of 2011. The weighted average cash costs for the Group increased from 140.8 cents per pound in the corresponding quarter to 151.2 cents per pound in this quarter. At 31 March 2012 the Group had cash and cash equivalents of US$3,545.8 million (31 December 2011 - US$3,280.0 million).

Kirkland Lake Gold (LON:KGI) released its full year production figures for 2012. Gold production was 100,275oz up 22% from 81,860oz in FY'11. This was achieved by a 35% ramp up in production from 207,322tons to 281,364 tons. Due to higher gold prices, Kirkland cut its cut-off grade to 0.04 oz per ton (opt) which reduced head grade by 10% to 0.37 opt. The Company's plans to expand production appear to be progressing well with production increasing from 600tons per day in Q1 to 900 tons per day in Q4. In April, throughput reached 1000 tons per day with production forecast to more than double to 2,200 tons per day by May, 2013. As these were just the production figures, no cost information was released.

Mining Group Limited (ASX:MNE) provided a drilling update and initial drilling results from the new Bayag Bayag target site on its Comval copper-gold project in the Philippines. The first hole reported a downhole intercept of 44.00m @ 0.64% Cu from 39.00m, including 28.00m @ 0.88% Cu from 55.00m. Another three are currently being drilled from its eight hole initial drilling programme. Surface mapping has also been completed which shows indications of a 700m long skarn alteration system including outcropping gossans.

Oil and Gas News 

Melrose Resources (LON:MRS) -Interim Management Statement: Progress on the Company's exploration and drilling campaign is on track with the previously announced schedule. The West Dikirnis LPG plant expansion project is well on schedule for installation by the end of the year. The LPG plant is to recover an incremental 750 bpd of hydrocarbon liquids. Net entitlement production during the first quarter averaged 16.2 Mboepd, approximately 7% lower than our full year forecast of 17.4 Mboed. We believe production during next three quarters will increase following full effect of production from West Khilala-8 development well and completion of South Khilala-2 development well. First exploration on the frontier Mesaha exploration concession in southern Egypt is on schedule for September 2012. With an already strong balance sheet and improving cash flow, alongside a balanced exploration portfolio, all the elements exist for a robust growth model. The current performance of the shares is not a fair reflection of the value of Melrose business. Its producing asset alone supports 147p per share valuation while the risked exploration upside adds 28p. We reiterate our Buy recommendation with a target price of 175p. In this news:

• During the first quarter the net debt to equity ratio has been reduced to 81 percent (as compared to 89 percent at year end 2011). There have been no major changes in the Company's balance sheet since 31 December 2011.

• Total capital expenditure in the first quarter amounted to $10.0 million, of which $9.2 million was on development and $0.8 million on exploration activities.

• The 2012 production guidance remains 28.0 Mboepd on a working interest basis. This equates to 15.4 Mboepd on a net entitlement basis assuming a Brent oil price of $90 per barrel.

• Based on the Bulgarian and Egyptian production revenues, Melrose's financial position continues to strengthen and the Company remains on track to achieve its financial gearing target of around 60% by yearend 2012.

• The 2012 capital expenditure forecast remains at $83 million of which approximately 45 percent is dedicated to exploration activity and the balance to development programmes.

RusPetro (LON:RPO) - Upbeat Interim results: Today's update specifically sheds light on the drilling and production update. RusPetro expects to complete its targeted drilling of 24 exploration wells by the end of the year.Mobilization of two additional rigs (total four) lends confidence to its drilling schedule. On the infrastructure front, timely completion of the 27km pipeline and installation four electricity generators is another positive to take away from the today's announcement. The Company will reduce production cost by $3.8/bbl from the above projects. The Company is fully funded for its 2012/2013 drilling and development programme with the cash position of $154.9 million at the end of Q1 2012. In this news:

• RusPetro's revenue grew to $19.2 million in the first quarter 2012, compared to $15 million in Q4 2011 and $3.5 million in Q1 2011.

• Net cash generated from financing activities was $173.7 million. Capital expenditure during the period was $20.4 million.

• RusPetro's proved oil reserves by 10% from 157m to 173m barrels and its proved and probable oil reserves by 7.5% from 1,437m to 1,545m barrels in an audit dated December 31, 2011.

• Infrastructure items currently underway include:

o Oil processing North East facility of 4,000 bpd being fast-tracked

o Oil processing West facility of 15,000 bpd on schedule

o Infield pipelines: 7.6 km pipeline from Pad 21 to processing facility 70% complete and 1.6 km pipeline from Pad 22 to Pad 21 water injection lines 30% complete

Cairn Energy (LON:CNE) - Operations Update: Today underlines the speed with which the Company is moving in an effort to bring a better balance to its portfolio. With a healthy cash balance coupled with the acquisition of Agora, 2012 looks promising as the Company aims to unlock value through a blend of exploration and production assets. In the news:

• Return of US$3.5 billion to shareholders in February 2012

• 22% interest retained in Cairn India Limited (CIL)

• Group cash at 31 March 2012 of US$1.1bn

• Production from Rajasthan reached a major milestone of 175,000 bopd with potential remaining to produce 300,000 bopd

• Acquisition of Agora Oil & Gas in UK and Norwegian North Sea; completed 9 May 2012

• Significant oil discovery for Agora at Skarfjell prospect in Norwegian North Sea

• Farm out of 30.625% interest in Pitu block in Greenland to Statoil ASA

• Bids submitted with JV partners, Marathon Oil Company, CC Energy S.A.L and Oranje-Nassau Energie B.V., in Cyprus offshore round

Premier Oil (LON:PMO) - Interim Management Statement pleasing to the eye: The imminent start-ups of the Huntington and Rochelle fields confirm Premier's continuing success in the North Sea. A strong field production performance in 1H 2012 is pleasing and with an extensive drilling programme set out for the rest of the year (12 exploration and appraisal wells), we believe Premier is on track to meet its medium term production target of 100k boepd. Today's announcement will have a positive impact on the valuation and bodes well for the share price. In this news:

• Production averaged 56.1k boepd during the first four months of the year, with medium-term production target of 100k boepd remaining unchanged and on track.

• Huntington and Rochelle are both expected on-stream in Q4 2012.

• Progress has been made commercialising new projects - Solan, Pelikan, Naga, and Dua.

• A programme of around 12 exploration and appraisal wells is planned for the remainder of 2012

• Exclusive arrangement signed with EnCounter Oil

• Strong financial position, with cash and undrawn facilities of $1.5bn.

Saints & Sinners: Mining   

Beowulf Mining (LON:BEM) slipped 6% to 13.625 during early trading despite announcing that its subsidiary, Jokkmokk Iron Mines AB or (JIMAB), has now received approval from the Mining Inspectorate at Bergsstaten for the work plan filed and notified in respect of the 2012 drilling campaign on its Kallak nr1 permit area. JIMAB intends to file a new work plan shortly in respect of the Parkijaure nr2 permit area as the timetable set out in the original notified work plan has now expired. The company has, for some considerable time, sought and been in consultations with the Mining Inspectorate and the local Saami community seeking to resolve the Saami's objections to JIMAB's work plans on the grounds that such planned operations could potentially affect the community's seasonal reindeer herding. Further to a request by JIMAB, the Mining Inspector has now duly considered this matter and decided to confirm the work plan for Kallak nr1 subject, inter alia, to the company being required to provide the local Saami community with at least ten days' notice prior to drilling operations commencing setting out the location of the drill rigs, intended equipment utilization, staffing numbers, envisaged routes and estimated duration. The Mining Inspector's decision is effective immediately, even if an appeal is lodged within the requisite three week period. The work plan for Kallak nr1 will remain valid for the remainder of 2012 and, in accordance with the Swedish Minerals Act, JIMAB will deposit an increased sum of GBP54,000 as a bond with the Mining Inspectorate in respect of any damage resulting from its exploration activities prior to works commencing.

African Minerals (LON:AMI) jumped 7% to 428p during early trading after the company said that, following receipt of relevant regulatory approvals, China Railway Materials Company Limited ("CRM") has completed its subscription for $50m of the Company's 8.5% convertible bonds due 2017 ("the Bonds") through CRM (Hong Kong) Holdings Ltd, its wholly owned subsidiary. These Bonds have been issued today, and are on the same terms as, and form a single series with, the $350m of convertible bonds issued on 10 February 2012. As previously announced, CRM has the right to maintain its shareholding in the Company at up to 12.5% in the event of any future equity issue by AML. CRM's subscription to the Bonds, which represents 12.5% of the enlarged issue of the Bonds, removes any potential dilution of their shareholding if the Bonds convert into fully paid common shares of the Company. The common shares to be issued upon conversion of the Bonds issued to CRM would represent approximately 4.6 million common shares or 1.4% of the current total number of issued and outstanding common shares of the Company. Mr. Liu Guoping, CRM's nominated director on AML's Board, said "We are delighted by African Minerals' achievements in bringing Tonkolili into production in such a short period of time and are committed to working with them as supportive, long-term partners." Frank Timis, Executive Chairman of AML commented: "The subscription by CRM for their full entitlement of AML's convertible bonds underlines their commitment to AML's growth story and also signals the support of China for our long term strategy."

Hambledon Mining (LON:HMB) slipped 9% to 1.975p during early trading, after pushing yesterday on a drilling update that said 114 drill holes have been completed in the upper levels of the underground ore zones at Sekisovskoye project, Kazakhstan, and the results are consistent and in many areas exceed the previous geological and mineral resource modelling previously carried out. Total over 13,250 meters drilled. Continues to advance underground mine and associated diamond drill program. Received further payments of $420,000 relating to for Ognevka bankruptcy process, making total proceeds received by the company of $1.62 million.

Caspian Holdings (LON:CSH) pushed 8% higher to 0.37p during early trading today, after the company said that high grade assay results continue at the La Parrilla Tungsten Project in southwest Spain, in which it has an option to buy a 100% interest. Significant intersections from the second hole IP-02 include: 18 meters from 230 meters to 248 meters of 0.97%tungsten VI trioxide, or WO(3); 10 meters from 174 meters to 183 meters of 0.17% WO(3). Caspian -Caspian is currently drilling hole four out of five holes in a 1,500-metre diamond core drilling campaign to appraise extensions to the La Parrilla orebody, which is targeting an open zone to the west of the existing open pit. To date, a total of 1,172.80 meters has been drilled. Hole three has been completed and the Company awaits assay results. Assay results have been received for the second hole, IP-02, which indicate thick high-grade intersections well above the average SRK resource grade of 0.09% tungsten trioxide (WO(3). As with the first hole announced in April, the second hole has intersected visible tungsten mineralization, in particular the deepest intersection which corresponds with the deepest in IP-01. Significant mineralization can be seen in all holes drilled to date. Initial indications suggest strong correlation of mineralized zones between holes.

URU Metals (LON:URU) eased 17% to 5.375p on just over 10 times the average daily volume. The shares are now back to levels not seen since 2010, and the next major support line I can see looks to be around the 5p level.

Horizonte Minerals (LON:HZM) slipped 7% to 8.375p during early trading after the company reported Q1 2012 results that highlighted a wider pretax loss for the quarter ended March 31 and said that the preliminary economic assessment for Araguaia asset on track for release at the end of Q2 2012. Pretax loss from continuing operations GBP690,229 (2011: GBP190,358). Loss per share 0.24 pence (2011: 0.07 pence). Capitalized Exploration expenditure GBP586,684 (2011: GBP685,076). Cash at end of period GBP4.87 million (2011: GBP10.78 million). Total assets at period end GBP33.37 million (2011: GBP36.46 million).

Regency Mines (LON:RGM) slipped 6.8% to 2.05p at the mid-price, although the percentage move was not as bad as it sounds as the spread on the stock was 1.8p to 2.3p, which is wide enough to fit a bus through! 2p looks to be a major support line so it will be interesting to see how the long term holders react now the shares are back to that level once again.

From the trading floor   

The FTSE 100 continued its bearish run once again today, easing a further 50 points from the start of trading, touching a low of 5354, before bouncing to trade only 14 points down at 5424 (-0.25%) on volume of 600 million shares as the US opening bell sounded. The FTSE AIM All-Share Index was 1.23% easier on volume of 700 million shares.

Commodities Corner   

Gold - ↓Trading at $1540, down $9 (-1.19%)

Silver - ↓Trading at $27.49, down 18c (-0.69%)

Copper - ↓Trading at $7671, down $13 (-1.47%)

Zinc - ↓Trading at $1912, down $8 (-0.52%)

WTI Crude - ↓Trading at $92.84, down $1.12 (-1.21%)

Brent Crude - ↓Trading at $111.67, down 48c (-0.43%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

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

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

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

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

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

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

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

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

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

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

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

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

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

Oil & Gas News

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

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

• Mean unrisked recoverable prospective resources of 1.17bn bbl.

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

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

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

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

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

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

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

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

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

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

• Papa-1 well results expected in July 2012

• 3D seismic acquisition programme nearing completion

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

• La Vega Este-1 well spudded

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

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

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

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

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

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

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

Saints & Sinners: Mining   

Namakwa Diamonds (LON:NAD) jumped 15% to 4.7p during afternoon trading as speculation from bulletin boards started to do the rounds saying "Fusion Tenders, in cooperation with I. Hennig & Co, is pleased to announce that a 100% sell through of all 64 lots of the KAO Production during the sealed bid tender in Antwerp from the 7th-11th May 2012. Richard Collocott, CEO of Namakwa Diamonds commented: "This has been an important week for Namakwa and Storm Mountain Diamonds to move the sale of the Lesotho's KAO production from South Africa to Antwerp. Antwerp remains, in our opinion, the most important trading centre for rough diamonds and despite challenging market conditions we are pleased to have achieved solid prices." Now as with all speculation this must be taken with a large pinch of salt until the company itself actually updates the market, but the speculation was enough to get the shares moving.

UK Coal (LON:UKC) bucked the overall negative trend in the market today, pushing 5% to 14.75p on decent volume during afternoon trading. The shares have been on a rollercoaster ride recently, jumping from 12p up to almost 25p, before falling back down to 13.5p yesterday, before recovering during trading today.

Leed Resources (LON:LDP) were very active once again today, with over 110 million shares changing hands before the end of lunch. The shares were 2% higher at 0.38p as holders sit and wait for another update from the company's investment in Manas Coal. The company has been very tight lipped for a while now, so it would be no surprise to see some sort of update materialise over the coming weeks.

Bellzone Mining (LON:BZM) slipped another 9% to a new all-time low of 18.5p on volume of just over 6 million shares traded just after lunch. The shares have really been underperforming over the last few months, slipping from a high of 98p back in January of last year, to the current levels.

Another Platinum stock that has really been under a lot of pressure of late is Aquarius Platinum (LON:AQP) and the shares slipped another 9% to 92.5p during afternoon trading today. The shares are a long way from the 345p high back in January of last year, and have been printing a new 52 week low virtually every day throughout May. I will be watching this one closely for any signs of a turnaround.

Angel Mining (LON:ANGM) hasslipped back to what looks like an very interesting support line at 1.175p, and as I type the shares were bouncing a touch off of that support line to trade at 1.25p at the mid-price on volume of just over 10 million shares. The last update back on the 9th of May said that, since the main generator was repaired and processing of ore recommenced on April 5, the mining and processing operations have progressed well at the Nalunaq Gold Mine. Circuit is now well primed with gold and on May 6 Angel completed a gold dore pour of 19.295kg [538oz]. Future gold pours are planned on a three weekly cycle and, following the next gold pour, the mine and plant are expected to settle into a much more consistent period of cash generative production. Company has also raised GBP260,000 through the issue of 18.62 million new ordinary shares to YA Global masters SPV Ltd. at 1.40 pence per share under the Standby Equity Distribution Agreement announced July 28. Proceeds will be used to meet the Company's repayment obligations for April under the promissory note facility with Yorkville.

Metminco (LON:MNC) slipped 11% to 8.55p during afternoon trading and looked to be on course for a retest of major support at 7.75p. The shares have been in free fall since the end of April, slipping from 13p to the current low of the day at 8.29p. It will be interesting to see how the long term holders react as the shares approach this significant support line once again.

From the trading floor   

The FTSE 100 managed to cling to the major support at 5450 yesterday and closed just above, which gave the green light for a little relief rally first thing this morning as a few bear positions were closed. However, it was not long before the bears regained control and started to sell the market at 5500 down to a low of 5411, just above the next major support line of 5400. This was all done on relatively light volume of 550 million shares, and as I type the main index was down 24 points to 5441 (-0.43%). The FTSE AIM All-Share Index was 0.87% easier on volume of 924 million shares.

Commodities Corner   

Gold - ↓Trading at $1555, down $1 (-0.05%)

Silver - ↓Trading at $28.14, down 2c (-0.04%)

Copper - ↑Trading at $7779, up $13 (+1.05%)

Zinc - ↓Trading at $1918, down $10 (-0.56%)

WTI Crude - ↑Trading at $94.89, up 11c (+0.12%)

Brent Crude - ↑Trading at $112.31, up 74c (+0.66%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News 

Comment: Financing Risk Anglo Pacific's comment this morning that "The current difficult debt and equity markets have made the raising of mining finance much more challenging, thus creating increased royalty opportunities for the Group", has re-enforced our view that investors are shying away from small to mid-cap mining stocks due to "financing risk", and that companies will either be forced to raise equity at a deep discount in the current market or won't be able to raise equity at all. However, there is a risk of tarring all companies with the same brush and we feel there are companies which will not have to raise equity in the immediate future and are seeing their share prices suffering due to this sentiment. We have had a quick look through our research universe and have selected a few companies which we do not expect will have any immediate financing requirements and may represent a good opportunity to investin the current market. In no particular order these are:

• Sierra Rutile - $35.1m as at April 2012

• Kenmare Resources - $77m at Dec 11

• Gemfields - $32.4m cash at 31 Dec 11 with a $23m diamond inventory

• Frontier Mining - $29m loan facility and $37m from an asset sale last year

• Beacon Hill Resources- $20m debt facility

• Strategic Natural Resources - just started production, with coal pre-payment funding ramp up

• Continental Coal - Now has 2 operations in production and is funded through to production at Penumbra.

• Copper Development Corporation - funded through 2012 exploration programme

• Gem Diamonds - $109m in cash at 15 April 2012

• Afferro Mining - $55m for sale of assets to Severstal funds current development work

• Avocet - $100m at 31 March, although may need $120m for Inata expansion of which a significant proportion would be debt financed

• Centamin Egypt - US$175 million as at 31 March 2012, Centamin remains debt-free and unhedged

• Shanta Gold - $34m through recent placing and loan notes funds Shanta through to production in 2013 at New Luika Gold Mine

Anglo Pacific Group (LON:APF) has released its 1Q12 IMS. Royalty income was down to £1.5M compared to £9.9M for 1Q'12, or 1.9p per share compared to 9.12 in 1Q'11. The drop in revenue was principally caused by the drop in hard coking prices and lower production rates at Kestrel, due to bad weather and a protracted long wall changeover impacting the level of coal produced. Anglo Pacific believes the drop in production will be recovered in a later period. Total assets now stand at £366M down from £380.2M at the end of 2011, a better performance than the sector as a whole, and the Company's cash position stands at £20.9M compared to £32.2M at the end of CY'11.The Company announced the acquisition of the iron ore royalty at Mount Ida on the 1st May and given the state of the equity markets, the Company is receiving an increasing number of new enquiries for finance, and we expect further deals to be announced in due course.

Archipelago Resources plc (LON:AR.) was informed on 14 May that Mr Jeremy Ayre, a director of the Company, has disposed of 100k shares in two transactions. In the first transaction, 94,778 shares were sold at 58p on 10 May and in the second a further 5,222 shares were sold at 59p on 11 May. Mr Ayre now holds 500k shares in the Company, representing 0.09% of the total voting rights, and holds 600,000 Options with an exercise price of £0.258 and expiry date of 31 December 2012.

Balamara Resources Limited (ASX:BMB) announced the appointment of experienced international mining executive, Mr Alastair Clayton, as a Non-Executive Director. Mr Clayton, who is based in London, has a wealth of experience in the resources sector, having held senior executive and board positions with a wide range of successful resources companies over a 16-year career.He is currently a Non-Executive Director of Uranex Limited (ASX: UNX). Previously, Mr Clayton was a Non-Executive Director of Ortac PLC, a Slovakian-focused gold explorer and was commercial manager for Solo Oil PLC, a Tanzanian-focused oil explorer. Mr Clayton will play an integral role in managing and promoting the Company in Europe, particularly after Balamara completes its planned listing on the AIM exchange in London in mid-2012.

Caledonia Mining Corporation (LON:CMCL) has appointed Mr Richard Patricio as a Non-Executive Director of Caledonia with immediate effect. Mr Patricio is Vice President Legal and Corporate Affairs at Pinetree Capital Ltd, a Toronto-based resource-specialist investor and long-standing shareholder in Caledonia. Pinetree holds approximately 10.1% of the issued shares of Caledonia.

Matra Petroleum (LON:MTA)- New Phase?: The departure of Neil Hodgson so soon after the arrival of Maxim Barsky marks the end of the past period of development, and the start of what we believe will be a period of aggressive growth. However, the remaining management has an obligation to shareholders to manage this transition period. These are exciting times for Matra, and at this stage we are reiterating our BUY recommendation and 3.9p price target.

Cove (LON:COV) - Golfinho find 3 months too late?: News of a second significant discovery at Golfino is good news, and further validates the Company's hypothesis of the regional geology. But one can't help but think it is 3 months too late, especially as the current Shell bid has been recommended, and Greece looks to be falling out of the Euro taking the equity markets with it. In this environment, I believe investors are more likely to hold on to the certainty of the cash offer from Shell, than risk a high price potential sometime in the future. As such, Golfino's arrival will do more to comfort Shell's investment decision than increase the prospect of a high offer. The only way we see this changing is if there is a firm hostile counterbid made directly to investors.

JKX (LON:JKX) - Increasing Exposure: Today's news that JKX has commenced production at Koshekhablskoye makes the start of the next phase of development within the Company, and earns management significant kudos; its outlined its plans and delivered against them. Furthermore, the fact that JKX has secured the Giorgievskoye exploration licence, adjacent to its existing Koshekhablskoye production licence, further evidence of the steps that management is taking to rehabilitate the Company's battered image, as it raises the prospect that not only will further reserves be added to the current reserves base, but that once delineated, they will be monetised, all of it quickly.

Afren (LON:AFR) - Interim Management Statement: The Company has made excellent progress year to date across its production and exploration portfolio. Q1 net production is up 327% y/y to 41,308 boed, led by a steep rise in production from the Ebok field. Commencement of oil production from the highly prospective Barda Rash field in Kurdistan by the end of the current year would be another significant achievement for the company. Barda Rash net 2P reserves are estimated at 860mm bbl. The Company's exploration programme so far has met with tremendous success: successful drilling of an exploration well in the Ebok North Fault Block proved commerciality of the entire Ebok field and significantly reduced technical risk associated with the exploration and development of the block; successful testing of the Okoro East oil discovery, offshore south east Nigeria, confirmed the presence of high quality (38° - 40 API) crude oil; in the Ain Sifni (20% WI) block, Kurdistan, the Simrit-2 exploration well discovered significant oil accumulation. We believe Afren has a quality portfolio of production and exploration assets spread across different regions. With the aggressive exploration and development programme, we believe Afren should be on every investors watch list. In this news:

• Q1 net production of 41,308 boepd in line with expectations for the period (+327% year-on-year) 

o Early production wells on Okoro East to be drilled shortly

o Further development of Ebok field ongoing (four production wells)

o On track for full year net production guidance (42,000 boepd to 46,000 boepd)

o Development work underway at Barda Rash field. On track for first oil in August 2012.

o Ongoing prospect maturation in East Africa with significant data acquisition; 1,570 km total 2D seismic, 9,000 km gravity and magnetic data

o 2012 exploration targeting mean resources of 630 mmboe (net to Afren)

• Significantly cash generative portfolio 

o Turnover US$386.7 mm (Q1 2011: US$73.4 mm); profit after tax US$53.2 mm (Q1 2011: US$11.1 mm loss)

o Net operating cash flow generated of US$300.2 mm (Q1 2011: US$12.8 mm net operating cash flow used); US$153.1 mm net cash flow generated post capex (Q1 2011: US$147.2 mm net cash flow used post capex)

o Cash at bank US$399.0 mm (Q1 2011: US$333.0 mm)

• Diversified sources of funding; maturing capital structure 

o Successfully completed US$300 mm bond issue; majority of debt long dated (2016-2019)

o Net debt US$639.4 mm (Q1 2011: US$291.6 mm)

Ophir Energy (LON:OPHR) - Interim Management Statement: We believe the remaining period of 2012 will be critical for the Company as its exploration programme gathers pace with the completion of Mzia-1 well in Block 1 expected later in May, the commencement of a three-well drilling programme in Equatorial Guinea scheduled for late June,and spudding of Papa-1 well in Block 3 (Tanzania) expected in June 2012. The liquidity position of the Company is very strong with the end April cash balance of $529mm. We will be looking out for the updates on the above activities. In this news:

Tanzania

• Jodari-1 finds 4.6 TCF gross recoverable resources in the Tertiary intraslope play

• Drilling programme on the deeper Upper Cretaceous intraslope play continues 

o Completion of Mzia-1 well in Block 1 expected later in May 2012

o Spud of Papa-1 well in Block 3 expected in June 2012

• Commenced 3D seismic acquisition programme to explore the outboard potential of Block 1

• Completion of seismic acquisition programmes in East Pande and Block 7

Equatorial Guinea

• Three-well drilling programme in Equatorial Guinea expected to commence in late June 2012

Saints & Sinners: Mining   

Ortac Resources (LON:OTC) pushed 8% to 0.77p at the high of the day, before settling around 0.74p after the company said it has entered into a GBP20 million Equity Financing Facility with Darwin Strategic Ltd. Darwin Strategic is majority owned by funds managed by the Henderson Volantis Capital Team, a subsidiary of Henderson Global Investors, which holds a 11.06% interest in the Ortac Resources. As a result of the Equity Financing Facility and the company's existing cash balance of GBP7.8 million, it is well positioned to progress with its growth strategy including the development of its Turec Project in Slovakia in addition to the evaluation and acquisition of further value enhancing assets. Henderson Global Investors is currently a holder of 256,166,095 ordinary shares in the company.

Vane Mineral (LON:VML) jumped 12% to 1.15p during afternoon trading after the company said that it generated total revenue of $2.6 million during the first quarter, adding that production continues to meet forecasts. 8,113 tons of ore in total processed by SDA Mill during first quarter compared with 7,802 tons during the fourth quarter of 2011, with average grades of6.87 grams per ton gold or g/T Au and 156 grams per ton silver or g/T Ag versus 4Q 8.06g/T Au and 4Q 127g/T Ag. Average recovery rate of 80.3% Au and 77.0% Ag versus 78.2% Au and 70.9% Ag. 1,180 oz. Au and 26,164 oz. Ag produced in 1Q at a direct production cost of $582 equivalent per oz. Au; or $10.7 equivalent per oz. Ag versus 4Q 1,352 oz. Au and 19,410 oz. Ag produced at a direct production cost of $585 equivalent per oz. Au; or $10.8 equivalent per oz. Ag. 70.8 tons of concentrate held in inventory at period end versus 68.6 tons. All gold and silver sold unhedged.

I highlighted the breakout on Hambledon Mining (LON:HMB) last week, after the stock had broken its resistance at 2.22p. The shares rallied to pretty much close the gap in the chart, touching a high of almost 2.5p, before slipping back to major support today at 2p. The shares were 16% easier during afternoon trading at 1.975p. Major support sits around the 2p level, with 1.85p looking to be the next major area of interest to watch for here.

Regency Mines (LON:RGM) bucked the overall negative trend in the markets today, pushing 4% higher to 2.365p at the mid-price during afternoon trading.

Friendless Baobab (LON:BAO) continued its move lower once again today, slipping yet another 12% to 7p during early afternoon trading, on almost 4 times the average daily volume by the end of lunch. You will have to go back to the middle of 2010 to find the 7p support line, but it does look like one that has held up strongly in the past, so it will be interesting to see how the long term holders react to this level once again.

A few profit takers showed up in Sirius Minerals (LON:SXX) today, pushing the company 4.5% easier to 16p during afternoon trading. The shares have been on a rollercoaster ride over the last few sessions, slipping from 23p down to 14p, before bouncing back up to 18p yesterday, before falling again to 16p as I type.

Anglo Asian (LON:AAZ) pushed 3% to 35p during early trading on decent volume after the company said it has been granted governmental approval to build a second gold mine in the country, Gosha, but will ask to delay the development until the first half of 2013 so it can focus on building a processing facility at its flagship Gedabek gold mine. During the hiatus, the company also plans to implement further drilling campaigns at Gosha. Anglo Asian aims to develop Gosha into a small, profitable, high grade underground gold mine producing gold at an average rate of 10,000 to 15,000 troy ounces a year for up to five years. "Gosha will be our second gold mine, following in the steps of our first, very successful mine, Gedabek, which is expected to produce circa 54,000 ounces this financial year. Another deposit, Ordubad, where we recently announced a Notice of Discovery, is also looking very promising, and will, we hope, be developed into a third mining operation in the future," said Chief Executive Reza Vaziri.

Allied Gold Mining (LON:ALD) slipped another 9% to 108p, pushing ever closer to the major support at 100p. The shares have slipped from 130p only 6 trading sessions ago, down to the current levels. It will be interesting to see how the line term holders react to this major support line once again.

From the trading floor   

Another awful trading session in the FTSE 100, with the main index shedding 113 points by 2pm to 5463 (-2.01%) on volume of 423 million shares. The major support lines to watch for at 5450 and 5400, if the first is broken, it would look as though a test of 5400 could happen very quickly. However, 5450 does look to be a strong support line so we could see a little relief rally from here. The FTSE AIM All-Share Index was down 2.46% on volume of 609 million shares.

Commodities Corner   

Gold - ↓Trading at $1560, down $22 (-1.38%)

Silver - ↓Trading at $28.51, down 34c (-1.14%)

Copper - ↓Trading at $7865, down $84 (-1.05%)

Zinc - ↓Trading at $1926, down $20 (-1.02%)

WTI Crude - ↓Trading at $93.92, down $2.19 (-2.28%)

Brent Crude - ↓Trading at $110.45, down $1.81 (-1.61%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.comor www.fox-davies.com

EMED Mining Public Limited  (LON:EMED) announced its unaudited results for the three months ended 31 March 2012. During the quarter the Company recorded a total comprehensive loss of €2.9 M and had a cash balance of €14.03 M.

Firestone Diamonds plc (LON:FDI) announced its unaudited operations update for the first quarter of 2012. At the Liqhobong Mine in Lesotho, production throughput was 129,000 tonnes for the quarter, 7% below budget due to stoppages at the pilot plant. 45,491 carats were recovered during the quarter (9% below budget) at a grade of 35.4 carats per hundred tonnes (3% below target). Two large diamonds weighing 39 carats and 26 carats respectively were recovered in March and an unbroken 74 carat light yellow gem diamond in April. A total of 67,148 carats were sold at the two tenders held during the quarter, which realised gross revenues of $4,773,000 at $71 dollars per carat. This price is higher than the $59/ct reported for the previous six months, though still below the $123/carat realised at its June 2011 tender.

Goldplat plc (LON:GDP) announced that it has completed the processing of the loaded carbon stockpiles at the Kilimapesa gold mine in Kenya. 1,151 ounces were produced and sold to date to Rand Refinery Limited in South Africa. The plant is now operating purely on stoping tonnage sourced from the underground operations. Grades and recoveries have been as forecast averaging 5 to 6 g/t and +85% respectively. The plant expansion to increase gold production towards 10,000 ounces per annum has moved into the procurement phase.

Orsu Metals Corporation (LON:OSU) reported its unaudited results for the period ended March 31, 2012. The Company reported a net loss of $2.6 million compared to net income of $1.4 million for the three months ended March 31, 2011. As at March 31, 2012 the Company had net assets of $29.6 million ($32.1 million as at December 31, 2011) of which $8.3 million was cash and cash equivalents ($10.3 million as at December 31, 2011).

Mariana Resources Ltd (LON:MARL) released its Quarterly Report to 31 March 2012. The group made a consolidated loss of £1,038,203 for the three-months ended 31 March 2012 (three-months ended 31 March 2011: £1,137,418). At 31 March 2012 Mariana had cash and cash equivalents of £4,587,318.

Solomon Gold Plc (LON:SOLG) announced that it will change the Company's name from Solomon Gold Plc to SolGold plc, with immediate effect. The name change acknowledges the Company's past and establishes a new platform for growth as a gold-copper discovery company. The Company's current project portfolio is being rationalised and it will continue to progress resource growth at the Rannes gold-silver deposit in southeast Queensland (Australia), whilst retaining exposure to the Solomon Islands through joint ventures, which the Company says is "currently with Newmont Mining Corporation".

VANE Minerals plc (LON:VML) announced an operational update on its gold/silver operations in Mexico. 8,113 tonnes of ore were processed during Q1 (Q4 2011: 7,802 tonnes) with average grades 6.87 g/t Au and 156 g/t Ag (Q4 2011: 8.06 g/t Au and Q4 2011: 127 g/t Ag). The average recovery rate was 80.3% Au and 77.0% Ag (Q4 2011: 78.2% Au and 70.9% Ag). 1,180 oz. of gold and 26,164 oz. of silver were produced in Q1 at a direct production cost of $582 equivalent per oz. Au. (Q4 2011: 1,352 oz. Au and 19,410 oz. Ag produced at a direct production cost of $585 equivalent per oz. Au). Total revenues were US$2,612,564 generated in Q1 (Q4 2011: US$2,692,093).

Atlantic Coal  (LON:ATC) has released its preliminary results for FY'11 turning the previous year's net loss into a net gross profit of US$226,946. Despite ROM production being flat at 207,005t (207,873t FY'10), both sales (106,403t) and revenues (US$13,991,971) were both up strongly giving Atlantic a net gross operating profit of US$13,991,971 (FY'10 US$10,720,103).Consequently, losses for the Group fell from -US$5,091,659 to -US$3,149,606. Since the end of the year, production has risen 12%, whilst average sales price has risen 24% to 31,729t at US$166.3. Significantly, the Norfolk & Southern Railroad diversion has at last been completed, providing access to approximately 1.0 million tons of coal. Progress has also been made to consolidate Atlantic's land position in Pennsylvania, with the Company having an option to lease the Pott & Bannon anthracite coal mining property in Schuykill County believed to contain 4.1 million tons of clean coal and an option to acquire additional anthracite mining assets for US$35M.

Anglo Asian Mining (LON:AAZ) has been given approval from the Ministry of Ecology and Natural Resources for the Development and Production Programme for its Gosha Gold Deposit to establish Second Mine in Azerbaijan. The Company aims to produce 10-15k oz pa from its underground operations for up to 5 years. Under the terms of the production sharing agreement, development and production must start within one year, in this case by 25 April, 2013. However, as Anglo Asian is intending to build an agitation leaching plant at its Gedabek mine, the Company intends to ask the government to delay commencement until 1H'13. Gedabek intends to produce 54koz of gold this financial year.

Ortac Resources (LON:OTC) has entered into a £20M Equity Financing Facility with Darwin Strategic Limited, a company majority owned by funds managed by the Henderson Volantis Capital, a subsidiary of Henderson Global Investors, which already holds a 11.06% interest in Ortac. Combined with the Company's existing £7.8M cash position, this removes concerns over the Company's financing as it looks to develop its Šturec Project in Slovakia or acquire other assets. In conjunction with the EFF, Ortac has entered into a warrant agreement with Darwin dated 11 May 2012 to subscribe for up to 20M shares at an excise price of 1.25p over the next 36 months.

Pan Pacific Aggregates (LON:PPA) has announced that at a Council meeting of The District of Mission on Monday 7 May 2012, the Council agreed to develop a Local Area Plan for inclusion in the Official Community Plan for the Keystone Avenue aggregate operations. The Plan will also address the after use and future development of the pits once exhausted. It allows PPA the opportunity to agree terms with other operators for PPA to operate other pits. One example is the Shaw Pit , an existing sand and gravel pit owned by The District of Mission.PPA has been selected by The District of Mission to operate the reserve, and the Company is currently in discussions to achieve an amendment to the Mines Permit to reflect the envisaged operational requirements. The extraction, processing and sale of aggregates will be operated by PPA.

Polymetal International (LON:POLY) has sold 100% of Amikan Holding Limited, which owns the Veduga gold deposit in the Krasnoyarsk region of the Russian Federation, to Polygon Gold Inc., a private company incorporated in the Province of British Columbia, Canada for US$20M in cash and 750 shares in Polygon resulting in an 81.8% equity ownership in Polygon. Polygon was founded by Leonard Homeniuk, who is currently an independent non-executive director of Polymetal, to develop Veduga into a producing mine. Mr. Homeniuk serves as Polygon's Executive Chairman and CEO and Polymetal plans to provide certain technical and regulatory assistance to Polygon on an on-going basis. Over time, Polymetal may dilute its equity stake in Polygon if external equity financing is raised. Veduga has estimated NI 43-101 compliant open-pit reserves of 1.05 Moz of gold contained in 5.9 Mt at 5.5 g/t and M&I resources (inclusive of reserves) of 2.04 Moz of gold contained in 11.8 Mt at 5.4 g/t. The asset was part of the joint venture between AngloGold Ashanti and Polymetal from 2007 to 2012.

Continental Coal (LON:COOL) has now settled the transaction with the Sishen Iron Ore Company Community Development Trust. The final ZAR100M of the ZAR140M payment has now been paid along with all necessary administrative matters relating to the share buy-back and share subscription agreements. This highly positive transaction provides Continental Coal with a highly successful Broad Based Black Economic Empowerment partner as well as funds to develop the Penumbra, De Wittekrans and Vlakplaats coal projects.

Lonmin Plc (LON:LMI) has released its interim results. Platinum sales of 318,402oz were broadly flat on 1H'11, but USD revenue was down 10%, whilst ZAR costs were up 10.9%. Both impacted net operating profit which was $14M. Section 54 safety stoppages impacted production, down 1.7% to 5.8Mt, although safety performance has improved slightly with lost time injury frequency rates (LTIFR) down to 4.69 per million man hours from 5.4. FY'12 guidance remains the same with forecast Platinum production of 750koz, providing there are no further production issues due to safety stoppages, labour and community unrest . Capex spend was maintained at $450M, but the Company may reduce this subject to market and balance sheet restrictions.

First Quantum Minerals (LON:FQM) has acquired a 19.99% stake in Zincore Metals. Of the 42,067,745 shares acquired, 19,113,874 were from Zincore on May 10, 2012 by way of a private placement at a price of $0.20ps, for a total purchase price of $3,822,774. The remaining 22,953,871 were acquired through a secondary purchase on 11 May from Inversiones Pacasmayo S.A. for C$3,709,554.89, or approximately C$0.16 per share. First Quantum has agreed with Zincore to keep its stake below 205 for 30 months following a formal joint venture agreement between First Quantum and Zincore over the Dolores Area properties indirectly owned by Zincore.

Oil & Gas News

Range Resources & Red Emperor (LON:RRL)- Puntland looking like a better Punt: Africa Oil's presentation (here) has highlighted the significance of the previous announcement of 12 - 20m of net pay over a 150m interval, and is encouraging. Firstly it raises the potential that we may have a commercial discovery, and secondly, it increases the prospectivity of the remaining targets in the exploration portfolio. On the back of this news, we are reiterating our price targets (Range - 27p; Red Emperor - 65p) and BUY recommendation on both. In this news:

• A gross section of 150m of oil 

o net pay potentially between 12-20m

o Cretaceous Sandstones

• Further oil shows encountered in deeper sandstones currently being drilled.

o A testing program including the zones discovered to date and any deeper potential pay zones encountered will be agreed.

Providence Resources (LON:PVR) - Balanced Growth: Today's results underline the progress that the Company has made over the last two years, and the results are a useful reminder of just how much activity there is in the upcoming months. We believe that the portfolio has an increasingly balanced feel to it, and one that investors can feel comfortable with being exposed to explosive upside, while the downside risks are progressively being reduced. In this news:

• Commencement of $500mm, multi-well drilling programme (from 2011 through 2013) covering both appraisal and exploration projects in six geological basins offshore Ireland

• Further new drilling activities are on-going at Singleton, onshore UK

Chariot Oil & Gas Limited (LON:CHAR) - Tapir South disappoints: Tapir South (1811/5-1) exploration well in Northern Block 1811A in the Namibe basin offshore Namibia encountered sub-commercial resource albeit excellent reservoirs were penetrated, and is thus being plugged and abandoned. Although this is definitely a disappointment as the market was expecting positive update, it's worth recognising that the Tapir South well is only the second well ever to be drilled in the Namibe basin, and so data recovered from the test results should be used to gain a better understanding of the character and prospectivity of the block. The focus now shifts to the other wells in the drilling programme, with the Kabeljou 2714/6-1 well on the Nimrod prospect set to be spudded in Q3 this year. Success at establishing production flow at these wells would be a positive trigger for the stock. In this news:

• Tapir South reached a total depth of 4,879 metres TVDss

• Although excellent reservoirs were penetrated, no commercial hydrocarbons were found and the well will be plugged and abandoned

• The well encountered 173 metres of net reservoir sand of Cretaceous age

• Detailed analyses will be conducted on the data collected during the drilling of Tapir South.

• This information will be used to calibrate the existing data set of the block

• Still on track to commence the drilling of the Kabeljou (2714/6-1) well in Southern Block 2714A on the Nimrod prospect in the third quarter of this year.

• This will be the second well in the Company's 4 to 5 well drilling programme

Enegi (LON:ENEG) - Garden Hill South Operational Update: The Company has taken another step forward towards the monetization of its prospective block resources as the latest results confirm that the connected oil in place associated with Garden Hill South is in excess of those stated in the Company's CPR. Although further testing will be required to confirm the extent of improvement, today's announcement should have a positive impact on the valuation and bodes well for the share price. In this news:

• Testing of the PaP#1-ST#3 well indicate that the connected oil and gas in place associated with Garden Hill South is in excess of 61.5 million barrels of Stock Tank Oil Initially In Place ("STOIIP") and 117 BCF Gas Initially In Place ("GIIP")

• The Absolute Openhole Flow Potential ("AOFP") expected to increase from 310 boepd

• Further testing is required

Great Eastern Energy Corporation  (LON:GEEC) -Encouraging Results: The main highlights would be: 76% increase in total revenue and a production increase on its Raniganj Block. Although the Company has a long term debt of US$89.14M as at 31 March 2012, this year looks positive as the Company embarks on an extensive campaign which includes deploying a second rig to increase production at the Raniganj Block and beginning work on the Mannargudi Block once expected approvals are received shortly. Profitability will inevitably improve if the Company can demonstrate its execution capability over the next few years. In the news:

• Raniganj Block 

o Production increased to 8.9 mmscfd

o A total of 116 wells drilled; including 17 deviated wells successfully drilled

o Total of 89 wells dewatering / producing gas, a 57% increase over the previous year

o 5 deviated wells producing gas

o Substantial increase of 411% in 3P reserves at Raniganj (South) Block

o Second rig to increase production at Raniganj

o Offer submitted to ONGC for Raniganj (North) Block

o 184 wells planned to be drilled over the next five years on the Raniganj Block

• Midstream 

o Gas Gathering capacity increased from 15 mmscfd to 31.95 mmscfd, a 113% increase

• Downstream 

o Continues to supply to its existing customer base while adding further new industrial customers

o 37.53 mmscfd gas under contract / MOU, an increase of 20% over the year

o Sufficient contracts in hand to meet its projected production targets

• Mannargudi Block

o Work to commence once expected approvals received in Q2 2012

Afren (LON:AFR) - Success continues - this time it's Ebok in Nigeria: Today's announcement of successful drilling of an exploration well in the Ebok North Fault Block proves commerciality of the entire Ebok field. The discovery of 370 ft net pay of good quality oil in the same Tertiary reservoir sands equivalent to those in production at the main Ebok field development, significantly reduces technical risk associated with the exploration and development of the Ebok North Fault Block. The intention to use existing production infrastructure at the producing Ebok field will facilitate lower development cost and shorter lead time for production thus ensuring higher returns from this project. Ebok consists of two unmanned wellhead platforms at the Central Fault Block and West Fault Block locations. Both are tied back to a Mobile Offshore Production Unit (MOPU) where the produced crude oil is processed. From there it is piped to a 1.2 million barrel capacity Floating Storage Offloading vessel (FSO) spread-moored nearby, prior to offtake and direct sale on the international market. We expect re-rating of significant portion of 117mm bbl prospective resources estimated for the block. In this news:

• The Ebok North Fault Block exploration well reached a total vertical (and measured) depth of 4,320 ft, with the Transocean Adriatic lX jack-up drilling rig.

• Logging operations at the Ebok NFB well have been completed, with data obtained supporting a Pmean STOIIP in excess of 100 million barrels of oil, towards the upper end of Afren's pre-drill expectations.

• The well will now be suspended whilst Afren and Oriental determine the optimal development solution for Ebok NFB.

• This will likely incorporate synergies using the existing production, storage and offtake infrastructure at the main Ebok field and could involve the early drilling of new production wells from the existing wellhead platform at Ebok West Fault Block, followed by a full field development of Ebok NFB.

Ithaca Energy (LON:IAE) - Quarterly update:The major milestone during the last quarter was FDP approval for the Stella and Harrier Fields in the Central North Sea. The regular updates on the development progress of the Stella and Harrier Fields offers near term catalysts. The recent acquisitions of non-operating interests in Cook oil field and Maclure field and doubling of stake (32% WI) in the Carna field, provide platform to grow at the drill bit. We believe Ithaca has a balanced portfolio spread strategically across exploration, development and production phase. In this news:

• Revenue increased $9.5 million in Q1 2012 to $40.6 million (Q1 2011 $31.1 million) lead by increase in average realized oil prices from $111.19 / bbl in Q1 2011 to $116.42 / bbl in Q1 2012 and higher production volumes.

• Cost of sales increased in Q1 2012 to $26.0 million (Q1 2011 $17.7 million) due to increases in operating costs and depletion, depreciation and amortization.

• During the three months ended March 31, 2012 there was a cash net outflow of $5.6 million (Q1 2011 outflow of $4.2 million).

Essar Energy (LON:ESSR) - Essar Oil results: Completion of expansion of refinery to 18 MMTPA (Phase I) and increasing the complexity to 11.8 NCI is the highlight of the last quarter results (1Q2012). The attractiveness of the Vadinar refinery, post Phase I, is its high complexity and diesel dominance in its product slate. It significantly alters its crude slate capability providing an option to process heavy and medium crude upto 89% of the total input capacity. This upgrade transitions the refinery from a simple refinery to one of the most complex refineries in Asia. This will allow the refinery to leverage on the relationships between crude mix and crude and product prices thereby yielding higher gross refining margins, (GRMs). Essar Energy has 89% interest in the Indian Listed subsidiary - Essar Energy.

Mining News

UK Coal (LON:UKC) has released a discouraging set of production figures in its Interim Management Statement, after having released a more upbeat set of final results in April. Production from the start of the year to date was 1.5Mt down from 2.1Mt in 2011, after poor production figures from Daw Mill due to the slow ramp up of the 303s panel. Only 1Mt was recovered from deep mines compared to 1.6Mt in 2011. The Company will also be impacted by the decline in coal prices, especially since the start of April, due to the nature of its floating price contracts. Disappointingly, after reducing net debt last year, it has started to rise again from £138.8M to £154.1M, despite receiving £5.6M from property sales during 1Q'12.

Kibo Mining Plc (LON:KIBO) has requested the London Stock Exchange suspend trading in the Company's shares on AIM with immediate effect pending publication of the admission document in respect of the acquisition of Mzuri Energy Limited and Mayborn Resource Investments (Pty) Ltd.

Noventa Limited (LON:NVTA) announced that it started processing ore through its new processing plant at Marropino on 4 May 2012, initially at circa 100 tons per hour. Full capacity of the plant is 315 tons per hour and is expected to be achieved within the next six months. The Company also announced that it has entered into a US$10.00 million bridging loan agreement with Richmond Capital LLP, the Company's largest shareholder. The key terms of the Facility are as follows:

• It carries an annual interest rate of 24.0%, calculated daily

• It carries an arrangement fee of 7.0% of the full amount of the Facility

• It may be drawn in instalments, with the minimum value of each instalment being US$1.0M

• It matures on 31 July 2012.

In order to repay the Facility and to provide additional working capital, the Company proposes a placing of 134,000,000 new ordinary 0.8p shares in the Company at 6p per share to raise GBP8,040,000. The Company will also issue Richmond Capital up to a maximum of 118,240,000 warrants to subscribe for new Shares. The Warrants will have a 3 year term and an exercise price per share of 6p in year 1, 7p in year 2 and 8p in year 3.

Shanta Gold Limited (LON:SHG) announced final assay results following the completion of the upgrade drilling campaign at its New Luika Gold Mine. Best results from the Bauhinia Creek target include 10m at 18.26g/t Au from 130m and 10m at 3.8g/t Au from 160m. Best results from the Luika target include 11m at 5.24g/t Au from 120m and 6m at 9.02g/t Au from 160m. Today's assay results will be incorporated into a new resource for New Luika during Q2 2012.

Oil & Gas News

Serica Energy (LON:SQZ) The Company's exploration and development programme across all its blocks is progressing well with a firm focus on realizing the potential value of each project. The expectation of Columbus project sanction by mid-2012 and on-going farm-out process of its Atlantic Margin acreage offers near term catalyst. Farm-out will enable the Company to expedite the work programme and consequently uplift Atlantic Margin acreage valuation. The Luderitz Basin in Namibia is another exciting prospect and entry of BP through farm-out lends further credibility to the project. . With a non-leveraged balance sheet and revenue flow from the Indonesian assets, we believe Serica Energy is comfortably placed to develop its existing resources and also expand its portfolio base. In this news:

• Completed farm-out with BP for central Luderitz Basin blocks. Substantial value demonstrated.

• Average daily Kambuna field production of 16 mmscfd (gross) of gas and 1,000 bbl/day (gross) of condensate during first quarter.

• Average prices realised for gas and condensate during the period were US$6.4 per mcf and US$125.0 respectively.

• Compression facilities installed in February to arrest natural forecast production decline.

• Completed farm-out with BP for central Luderitz Basin blocks. Substantial value demonstrated.

• Serica fully carried on cost of extensive 3D seismic survey and to receive U$5 million in respect of past costs.

• 3D seismic survey commenced early May - target of 4,150 sq km.

• Farm-out process commencing in Rockall basin licences (Ireland) covering 3 prospects and 12 blocks.

Gulf Keystone Petroleum (LON:GKP) The spudding of the third exploration well on the Akri-Bijeel block marks the next stage in the development of block, and we do not believe that there will be a shortage of investors backing that the Company will benefit from the recent success across the portfolio, which culminated in a gross oil in place upgrade in Shaikan last year. It will be interesting to see how the market reacts as anticipation of the well update and subsequent results comes to the fore. In the news.

• The Bakrman-1 exploration well spudded on the Akri-Bijeel block in the Kurdistan Region of Iraq on 7 May 2012.

• The well is part of the operator's extensive exploration and appraisal programme.

• The well will target prospective intervals in the Jurassic, with a planned total depth of approximately 3,600 metres in the Lower Jurassic.

President Petroleum (LON:PPC) Today's Results underline what has been a very busy year for the Company on all fronts from a change in management to a strategically re-focus into South America. While today's RNS sheds light on the Company's major highlights over the past 12 months albeit a loss after tax, the key will be in the long term development and production schedule for the Puesto Guardian in Argentina. In the news:

Board

• Peter Levine joining as Executive Chairman as of today, May 11, 2012.

• Dr. David Jenkins appointed on 6 February 2012 as Deputy Chairman and Senior Non-Executive Director.

Corporate

• New South American strategy commenced with the July 2011 acquisition of a 50% working interest in the Puesto Guardian concession in Argentina

• Increase in estimated Company 2P reserves of 500%, following acquisition

• Invested in additional staff and office in Argentina

• Financial resources sufficient to achieve stated 2012 production objectives

• Revenue increased by 105% to US$7.0 million (2010: US$3.4 million)

• Contribution from Louisiana to the Group after operating expenses and production taxes increased by 80% to US$3.6 million (2010: US$2 million)

• Cash balance US$6.3 million at year end (2010: $45.6 million)

• Loss after tax for the year of US$21.8 million (2010: US$6.7 million) reflecting principally impairment charges at East Lake Verret (shields President from corporate tax)

Operations

• First two Argentine wells successful

• Average Group net production increase of 36% to 252 boepd (2010: 185 boepd), including 6 months contribution from Argentina

Saints & Sinners: Mining   

Hambledon Mining (LON:HMB) continued its impressive rebound again today, pushing 16% to 2.5p on just over 3 times the average daily volume. As I highlighted in yesterday's note, if the stock broke the resistance at 2.25p there was a technical gap to fill back up towards the 2.55p area, which the shares did actually trade through and fill during trading today, printing an intraday high of 2.61p. If the shares can close above that 2.55p area, a test of 3p would look to be the next area of interest to watch out for.

Beowulf Mining (LON:BEM) continued to push in trading today, moving 13% to 14.5p at the mid-price on decent volume. The company did say back on the 4th of May that the Mining Inspector at Bergsstaten said it will not be taking any action or conducting further investigation following Beowulf's technical infringement of the Swedish Minerals Act. Infringement was during drilling conducted on its Kallak Project areas without valid work plans being in place. The Mining Inspector has formally reminded the company's wholly owned subsidiaries, Jokkmokk Iron Mines AB and Iron of Sweden Limited, of the provisions and requirements of the Swedish Minerals Act and the potential consequences of any future breaches. Beowulf continues to consult with the Mining Inspector and the local Saami community to seek to resolve the objections raised to its work plans filed and notified in respect of the Company's 2012 drilling campaign on its Kallak nr 1 and Parkijaure nr 2 permit areas. Drilling operations at both Kallak North and Kallak South will therefore remain suspended until this matter is resolved.

Sunkar Resources (LON:SKR) jumped 8% to 5.75p at the mid-price during afternoon trading after the company said it has agreed to a refinancing of loans of its subsidiary Temir Service LLP by ATF Bank Kazakhstan. Loan agreements were signed with ATF in November 2010 of which $5 million were drawn down. In November 2011, the company defaulted on repayments due on these loans and subsequently has been negotiating a settlement with ATF. Under the terms of the refinancing, Sunkar will pay $1.5 million on May 11 and $1 million by July 1 with remaining payments due in monthly instalments until Dec. 31, 2014. New facility will be secured on Group physical assets.

Another stock that was rebounding from the recent aggressive selloff was Sirius Minerals (LON:SXX). The shares moved 10% higher to 16.25p on decent volume, bouncing from the lows of yesterday at 13.75p.

Amur Minerals (LON:AMC) added 8% to 5.5p at the mid-price during afternoon trading after the company said metallurgical test work results indicate that there is substantial potential to increase metal recovery into concentrate, possibly improve the concentrate grades and ultimately improve the 2007 SRK pre-feasibility cash flow model results for the Kun-Manie license area. Flotation test work, based on an average life of mine production grade, predicts increased nickel recovery up from the 2007 SRK Consulting prefeasibility study figure of 75.9% to 77.8%. Copper recovery has also increased significantly to 90.4% from 72.9%. Cobalt recovery is up to 68.6% from 57.0%. Locked cycle tests indicate substantially higher recoveries for platinum and palladium, 73.9% and 82.4% respectively, compared to SRK's study recovery projections which were not included in the SRK study cash flow model. Previous recoveries for platinum and palladium were 51.1% and 40.8%, respectively. Test work also indicates the potential to reduce the amount of contained MgO reporting to the concentrate and directly any penalties payable to the smelter. Achieving the combined increase in metal recovery and reduced penalties would ultimately result in a lower cost per pound of metal produced.

Horizonte Minerals (LON:HZM) slipped 5% to 9.625p during early trading today, breaking the psychological support at 10 for the first time this year. The main support line I can see here would be the 9.5p to 9.6p area, if that breaks possibly the next area of support could be 8p. We will be watching this one closely for any updates over the coming sessions.

From the trading floor   

The FTSE 100 rebounded from the bloodbath that has been the past few days of trading, pushing 25 points high to 5556 (+0.48%) at the 3pm hour. Volumes were a little on the light side, with the main index trading only 445 million shares as I type. The FTSE AIM All-Share Index was 1.58% higher on very thin volume of 690 million shares at the same moment in time.

Commodities Corner   

Gold - ↑Trading at $1600, up $11 (+0.69%)

Silver - ↑Trading at $29.48, up 22c (+0.74%)

Copper - ↑Trading at $8148, up $10 (+0.13%)

Zinc - ↓Trading at $1946, down $10 (-0.55%)

WTI Crude - ↑Trading at $97.30, up 51c (+0.53%)

Brent Crude - ↓Trading at $113.04, down 16c (-0.14%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Sunkar Resources (LON:SKR) announced that it has refinanced its loans to its wholly owned subsidiary Temir Service LLP by ATF Bank Kazakhstan, after the Company defaulted on the repayments to the original US$5M loan in November. Under the revised terms, Sunkar will pay $1.5M on 11 May and $1M by 1 July with remaining payments due in monthly instalments until 31 December 2014. The new facility will be secured on group physical assets rather than with the subsidiary company.

Coal of Africa (LON:CZA) has received Section 11 approval from the Minister of Mineral Resources for the sale by Rio Tinto and Kwezi Mining to CZA of effectively the prospecting rights for the Chapudi Coal Project and related properties in the Soutpansberg coalfield to a subsidiary of CZA and its BEE partner Rothe Investments. Chapudi is close to the Company's existing Makhado coal project and effectively ties up the area around Makhado. The deal was first announced in November 2010, and upon completion, CZA's subsidiary will take ownership of the equity and pay US$29,357,545, with a further US$13,642,455 once exchange control approval by the SARB has been granted. A final US$30M will be due once New Order Mining Rights on any of the properties have been granted or after two years from the date upon which the conditions precedent are fulfilled.

Allied Gold (LON:ALD) has issued an addendum to its 1Q'12 activities report to clarify the reserves and resources after a request from the ASX. This came after a statement by Frank Terranova, MD and CEO of Allied Gold that the Company has over 3.0Moz reserves and 8.0Moz resources. In addition, the Company commented on a statement in its annual report that it did not currently have a diversity policy in place.

African Barrick Gold (LON:ABG) has approved the expansion of its Bulyanhulu Process Plant to process tailings. The expansion will add 40koz gold production pa over the first 6 years at a cost of US$500/oz, and an additional 10Koz pa over the remaining life of mine at an average cash cost of US$554/oz. Total Pre-production capex is forecast at US$167m and construction will commence in 2H'12 with first gold in 1H'14.

London Mining (LON:LOND) has released a positive 1Q production report as it ramps up production at Marampa. Total production was 315kwmt of iron ore as production tracked the ramp up schedule, processing tailings and weathered ore. Total sales for the quarter were 244kwmt of concentrate, shipped in 5 Supramax vessels, 4 of which went to China and 1 to Europe. Product spec was consistently over 65.5% Fe with low impurities and average FOB price was US$108/dmt and US$39/wmt freight. With the commissioning of the transhipment vessel in Q2, the Company will be able to load Panamax and larger vessels which should reduce freight rates down to US$25/wmt. Post period production continued at an average rate of 4.3kt per day and expansion of the plant from 1.5Mt to 1.8Mt is on track to be completed in Q3. Guidance is maintained at 1.5Mtpa in 2012, rising to 4.2Mt in 2013 and 5 in 2014. The BFS for the expansion to 9Mtpa is expected to be completed in Q3.

GoldStone (LON:GRL) has commenced drilling at its Sangola project in Senegal. The drilling had been delayed for two months by the introduction of new policies and administration by the Forestry Department of Senegal in early March 2012. The first phase will involve 15,000m of Rotary Air Blast (RAB) drilling, targeting the Thiabedji anomaly. The Thiabedji anomaly is one of three previously discovered elongated gold anomalies identified at Sangola (announced 22 August 2011). The Thiabedji anomaly is six kilometres long and appears to be associated with a splay off the Main Transcurrent Shear Zone, the shear zone which controls the formation of various other gold occurrences (including Randgold's 3.4 million ounce Massawa deposit) further to the northeast. Subject to the onset of the rainy season, the Company will start a second 15,000m drilling programme.

Amur Minerals Corporation (LON:AMC) announced metallurgical test work results from its Kun-Manie licence area. Flotation test work on the sulphide ores was conducted on 24 samples distributed throughout the Maly Kurumkon, Vodorazdelny and Ikenskoe deposits. The results predict increased nickel recovery up from 75.9% to 77.8%. Copper recovery also increased from 72.9% to 90.4% and cobalt recovery is up from 57.0% to 68.6%. Locked cycle tests indicate higher recoveries for platinum and palladium, 73.9% and 82.4% respectively, up from 51.1% and 40.8%. The test work also indicates the potential to reduce the amount of contained MgO reporting to the concentrate and directly any penalties payable to the smelter. Trade off studies and additional test work are required to determine the final plant design and products to be generated. The initial phase of this metallurgical work is anticipated to be undertaken after this year's drill programme.

Bumi plc (LON:BUMI) issued its production report for the first quarter ended 31 March 2012. The company mined 20.0 million tonnes of coal in the quarter, up 9% over Q1 2011. The operating performance was impacted by seasonal high level of rainfall in Kalimantan during the quarter and a strike at one of Bumi's contractors. Production unit costs were higher, mainly due to increased fuel costs and higher stripping ratio at Berau, but are expected to decline going forward as various infrastructure projects under development are brought into commercial production

Caledonia Mining Corporation (LON:CMCL) announced its operating and financial results for the first quarter 2012. Gold produced from the Blanket Gold Mine in Zimbabwe was 9,164oz, 13% lower than the 10,533oz produced in the quarter ended December 31, and 25% higher than the 7,322oz produced in Q1 of 2011. The lower gold production in the quarter was due to scheduled maintenance on the No. 4 Shaft which was completed at the end of April 2012. Average gold recovery in the quarter was 93.2%, compared with 93.4% in the preceding quarter. The mines cash operating costs increased to US$648 per ounce of gold produced from US$521 in the preceding quarter. The increase in cash costs was due to certain anticipated non-recurring costs and the lower gold production during the Quarter. Gross Profit was $8,996,000 compared to $9,012,000 in the preceding quarter and $5,248,000 in the comparable quarter. Net profit after tax for the Quarter was $7,111,000 compared to $1,369,000 in the preceding quarter and $1,894,000 in the comparable quarter. At March 31, 2012 the Corporation had cash of $16,288,000. Caledonia and Blanket have also commenced implementation of the Memorandum of Understanding which was signed with the Government of Zimbabwe in February 2012. The first of four transactions for the sale of 15% of Blanket to a consortium of Indigenous Zimbabweans, for a consideration of US$11.0 million, has been signed.

EMED Mining Public Limited (LON:EMED) announced that it has executed a formal collaboration agreement with Slavia Tools, owner of a factory facility directly adjacent to the Biely Vrch Gold Deposit. The collaboration agreement is aimed to ensure that, upon the development of the Biely Vrch Gold Deposit, EMED will have the right to fund the transfer of Slavia Tools to new premises. Under the terms of the agreement, EMED will pay an option fee to Slavia Tools of €340,000, which Slavia Tools will apply to detailed planning for its possible new facilities on alternative sites in the same district. For the next ten years, EMED Mining will also have the option to pay €11 million to fund construction of new premises for Slavia Tools and to acquire the old premises for its own use, upon the permitting of Biely Vrch and the Company's commitment to develop a mine.

Griffin Mining Limited (LON:GFM) announced that it has entered into an agreement to purchase the majority of ZJK Mining Company's interest in the Caijiaying Zinc-Gold Mine and surrounding tenements, for RMB700 million (approx $110 million) in cash.When the transaction is completed, Griffin's interest will increase from 60% to 88.8% and the joint venture will operate under an extended 25 year term through to 2037.The purchase is conditional upon the approval of and registration by the relevant Chinese authorities which will take up to two months to complete. The purchase will be financed from undistributed retained dividends in Hua Ao, committed banking facilities in China and Griffin's existing cash resources.

Minera IRL Limited (LON:MIRL) announced its Interim Financial Accounts for the First Quarter ended 31 March 2012. Gold production from the Corihuarmi Gold Mine was 6,747 ounces compared with 7,952 ounces in the same period in 2011. Cash operating costs were US$502 per ounce (Q1 2011: $401 per ounce). The average realised gold price was up 22% to $1,699 per ounce (Q1: $1,389 per ounce) leading to an increase in revenues, up 1.3% to $11.1 million (Q1 2011: $10.9 million). Gross profit was US$5.4 million and EBITDA US$4.3 million. Profit before tax was US$3.1 million giving a profit after tax of US$1.7 million. The Company had a cash balance of $30.3 million at end of quarter (Q1 2011: $30.7 million).

Oil & Gas News

Providence (LON:PVR) Today's results have continued to underline the Company's progress towards unlocking the value within this licence area. Attention will now shift towards development, and the expansion of the reserves base. In this news:

• Seismic modeling and inversion study following the 48/24-10z appraisal well indicates that the reservoir sequence is widely developed in the Barryroe area.

• Detailed interpretation of the inverted seismic data has now commenced and will be used to better define the static oil in place estimates for the Barryroe accumulation.

• The material also helps in the mapping of the Barryroe licence area, as the Company now has the ability to seismically image the Barryroe basal sandstone package.

• The results from this work are expected later this summer.

Gulf Keystone Petroleum (LON:GKP) The Company today denied media/press speculation of new equity shares placement at 160p. The current share price is 18% higher than that speculated. Further, its confirmation of the sale of its 20% stake in the Akri-Bijeel block in the Kurdistan Region of Iraq is positive. We would be looking for the updates on the Akri-Bijeel block.

Desire Petroleum (LON:DES) The 14/15-4a discovery in the licence PL004b on the North Falkland Basin, if successful, will lead to significant re-rating of the Company's valuation and elevate Desire into a mid-size E&P company. Desire estimates net unrisked valuation of $173 million from the Sea Lion discovery and net $727 million from adjacent discoveries (Casper and Casper South (Shona). The focus for investors now will be on the roadmap for development of resources. In this news:

• Desire share of Sea Lion (unrisked) at $85/bbl (NPV 10%) is estimated at $173 million

o Assuming Desire share of Sea Lion unit is 4%

o Assuming 320 MMstb full-field case

• Desire share of adjacent discoveries (unrisked) at 85$/bbl (NPV 10%) is estimated at $727 million

o Assuming Casper and Casper South (Shona) development

o Based on net Desire 2C resources from Senergy April 2012 CPR update

Saints & Sinners: Mining   

Kryso Resources (LON:KYS) Pushed 3.3% to 31p on just over 3 times the average daily volume after the company said that an updated study, based on new drilling results, has increased the estimated amount of gold at its Pakrut gold prospect by 40%. Pakrut, around 112 kilometres northeast of the capital city Dushanbe, is now estimated to contain around 5.0 million troy ounces of gold, a 40% increase from the estimate last year. The study also gave a maiden estimate for Kryso's Eastern Pakrut prospect, five kilometres up the valley from Pakrut, which is now thought to contain around 465,000 ounces of gold. "The updated resource estimate further supports our belief that Pakrut will develop into a significant underground gold mining operation," Managing Director Craig Brown said.

UK Coal (LON:UKC) bucked the overall negative trend of the market today, pushing 3% higher to 17p. The shares have fallen a long way from the recent high of 25p to yesterday's low of 16p. The 15p/16p level does look to be an interesting support line, so it was no surprise to see the long term holders making a stand at that level once again.

Chaarat Gold (LON:CGH) was another stock that decided to go the other way to the market, pushing 5% higher to 21p at the mid-price during early trading. The 20p level has been a fantastic support for these over the last year or so, and holders here decide to draw a line in the sand once again.

Hambledon Mining (LON:HMB) nudged through the resistance at 2p during afternoon trading today, trading 3.5% higher at 2.075p at the mid-price. A close above this resistance could give the green light to the buyers once again to test the resistance at 2.25p. If this level is broken, then for the chartists among us will see the gap fill to 2.55p as the next level of interest to watch out for.

Rare Earths Global (LON:REG) slipped 11% to 380p on a poultry 4800 shares traded by the 3pm hour. The shares are now some 63% off of its recent 52 week high of 1050p. The shares did find a little support at 330p intraday, which helped them push back up to the current level of 380p as I type.

The aggressive selling continued once again today in Sirius Minerals (LON:SXX) knocking the shares price by another 9% to 14p. It did look as if the selling pressure was easing off later in the sessions, as the share price held the 14p level for most of the afternoon. It will be an interesting session for the stock tomorrow, as if the selling pressure has finally subsided, the price could make a decent move higher as the shares have fallen from a high of 23p only last week, to today's low of 13.75p, That's a drop of nearly 40% in less than two weeks of trading!

Rare Earth Minerals (LON:REM) not to be mistaken with the other stock mentioned above, slipped 14% to 0.155p at the mid-price during early trading today. The shares have been very quiet recently, and that could be the reason for the selling today, as holders finally lose patience with the stock. The shares are now lower than the level where Camelot Trust bought 250 million shares back in January of this year.

From the trading floor   

Another bloodbath for the FTSE 100 today, with the main index slipping another 67 points (-1.21%) to 5487 on volume of just under 600 million shares. Continued fears Surrounding the Eurozone have continued to keep people pressing the sell buttons, and every time the market tried to rally, the sellers got more aggressive. The FTSE AIM All-Share Index slipped 2.27% on volume of 840 million shares.

Commodities Corner   

Gold - ↓Trading at $1583, down $21 (-1.33%)

Silver - ↓Trading at $28.86, down 58c (-2.04%)

Copper - ↓Trading at $7989, down $16 (-0.22%)

Zinc - ↓Trading at $1956, down $50 (-2.55%)

WTI Crude - ↓Trading at $95.86, down $1.15 (-1.19%)

Brent Crude - ↓Trading at $111.88, down 85c (-0.75%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Kryso Resources plc (LON:KYS) announced that it has completed an updated Mineral Resource estimate for the Pakrut and Eastern Pakrut gold prospects, which has been reported in-line with the 2004 JORC Code. The total resource for Pakrut and Eastern Pakrut Projects is now 67.4 Mt at 2.24 g/t Au at a 0.5 g/t Au cut-off for 5.02 Moz of gold. This represents an increase of 40% over last year's resource. The higher confidence Measured and Indicated resources at Pakrut have increased by 305,000 oz to 2,210,000 oz Au at a 0.5 g/t cut-off.

Centamin plc (LON:CEY) announced its first quarter 2012 results for the three months to 31 March 2012. Q1 gold production was 49,071 ounces from the Sukari Gold Mine, a 9% increase on Q1 2011 but a 17% drop from the previous quarter. Cash costs were US$637 per ounce up from US$473 from the previous quarter. These cash costs could rise to US$730 an ounce if a national industry fuel subsidy is not honoured by the Egyptian government. This unsubsidised fuel cost made up approximately half of the fuel supply for the quarter. On the positive side, the underground mine achieved a record quarterly material movement of 71,815t at a head grade of 8.11 g/t Au, and EBITDA increased from US$54.9M in the previous quarter to US$60.5M. The Company has maintained its 2012 production guidance of 250,000 ounces, primarily driven by the ramp up of the underground operations. The Company has cash and liquid assets of US$175M as at 31 March 2012.

African Barrick Gold (LON:ABG) has announced a £1=U$1.6158 conversion rate for its final dividend for FY'11. Shareholders will therefore receive US$0.132 or £0.081 per share when the dividend is paid on 25th May.

Strategic Natural Resources (LON:SNRP) has entered into a joint venture agreement with its current offtake partner, Trasteel International, to create a new marketing company targeting the anthracite market. The new company, EliTra, will be a 50:50 JV between Trasteel and Elitheni Coal (SNRP's 74% owned subsidiary) and means that SNRP should receive a higher price for its coal than it would have selling only a thermal coal as per the current agreement. The new company has already pre sold its first anthracite shipment to a Brazilian importer with delivery scheduled for December and SNRP expects further pre sale deals to be made into Brazil and India over the medium term. As a result of these developments, SNRP and Trasteel have agreed to reschedule the coal shipments under the current off take agreement until later in 2012, which will included 5500kcal/kg coal into the thermal market, as per the current off take agreement with Trasteel. The Company has also commenced mining at Elitheni in April and begun stockpiling unwashed coal ahead of the delivery of the wash plant in June. The Company plans to produce 500kt in the first full year of production, ramping up production annually.

Tertiary Minerals (LON:TYM), the Fluorspar exploration and development company with nearly 4Mt of fluorspar in two projects in Sweden and Norway, has appointed Richard Clemmey as Operations Director with immediate effect. Richard was originally appointed as project manager in September.

Pan Pacific Aggregates (LON:PPA), the British Columbia based aggregates company, has announced the departure of Thomas Masney, CFO who is relocating to Toronto to be closer to his family. Terms have been agreed with an appropriate replacement and the Company will make a further announcement when formalities have been completed. Thomas will remain with the company until the end of August ensuring an efficient handover.

Petra Diamonds (LON:PDL) has released a positive 3Q'12 production and sales report. Total carats produced for the quarter was 622,509 cts (1,576,061cts ytd), up 126% year on year and the Company is on track to achieve its production guidance of 2Mcts for FY'12. However, this strong production growth was driven by Finsch, which produced 343,051 cts and having been acquired in September wasn't included in last year's figures. Production at the Company's other operations is being carefully managed with increased throughput at Cullinan compensating for lower grades. Sales revenue was also up sharply at US$98.0M, almost equivalent to total revenue for the entire 1H'12. This was driven by increased sales volume, up 134% to 626,958 cts, slightly higher than production with a slight decrease in inventory. At the end of the period the Company had US$17.7M in cash and US$37M in diamond inventories (372,105cts). Total debt stood at US$73.6M and the company is currently in discussion with lenders to restructure the company's debt arrangements.

Oil & Gas News

Wentworth Resources (LON:WRL) - Ziwani-1 exploration well disappoints, focus now on workover programme: Ziwani-1 exploration well in the Mnazi Bay Concession, Tanzania, encountered thin, sub-commercial resource and is thus being plugged and abandoned. This is definitely a disappointment as themarket was expecting positive update. The focus now shifts to the workover programme on three wells on Mnazi Bay and Msimbati gas fields. Success at establishing production flow at these wells would be a positive trigger for the stock. In this news:

• The Ziwani-1 well was spudded on February 1, 2012 and drilled to a final total depth of 2,671 meters.

• The gas bearing zone between 1,106 and 1,109 meters has now been tested using drill stem equipment.

• The zone flowed gas at an unstable rate of up to 7.2 mmcf/d. However, analysis of the test data indicates that the potential resource volumes of the well are sub- commercial and the well has therefore been plugged and abandoned.

• The rig will now be moved to the Mnazi Bay gas field, where it will commence a workover programme of three wells (MB-2, MB-3 and MS-1X).

• The partners are planning on drilling a second exploration well on the Concession Area once the workovers have been completed.

Matra Petroleum (LON:MTA) The Company took another significant step towards unlocking the potential of the Sokolovskoe structure with the commissioning of a downhole electrical submersible pump ("ESP"). In the news:

• A workover rig has now completed the installation of a downhole ESP in the A13 well

• It is likely to take a few days before stable production rates can be achieved post-commissioning

Red Emperor (LON:RMP) In revising its development strategy in Georgia, the Company has taken a significant step towards monetising the already discovered CBM resources in Georgia, and with an off taker already signed up, this project looks ready for take-off. While there may be a few disgruntled investors, their focus should be the cash; after all, Cash is King. Ahead of firm development plans, and a test well providing greater information on the likely performance of the CBM reservoir, we are reiterating out BUY recommendation and 65p price target. In the news:

• Embark on a revised development strategy for Blocks VIa and VIb

• The revised development strategy will focus on low-cost, shallow appraisal drilling of the contingent resources around the Tkibuli-Shaori ("Tkibuli") coal deposit

• Tkibuli has been estimated by Advanced Resources International to contain recoverable gas resources of at least 0.4 trillion cubic feet of coal-bed methane ("CBM")

• Opportunity to provide revenue potential from the Tkibuli CBM play within 18 months with this strategy

• Executed a conditional agreement with the Georgian Industrial Group ("GIG") regarding the joint development of the project

• GIG is the largest holding company within the country

Cairn Energy PLC (LON:CNE) Today's news should bode well for investors, as it further demonstrates Management's drive to create value for shareholders. The Company now has a portfolio which offers balance between near term and long term drilling activities spread across its operating regions. In the news:

• Completed the acquisition of Agora Oil & Gas AS ("Agora")

• Agora's portfolio is made up of interests in 11 licenses in the North Sea basin, with an active drilling programme in 2012

• The total consideration is approximately US$453 million

Mining News

African Mining & Exploration (LON:AME) released its Financial Results for FY'11. The gold exploration company with assets in Mali finished the year with cash and cash equivalents of £3.378M. The Company's recently acquired RAB and auger drill is now fully operational and was able to commence an auger drilling programme on the Karan permit area in early April. The Company is actively seeking opportunities to expand areas of interest in additional geologically prospective areas and recently signed an MOU on a prospective permit area which lies within the Yanfolila Greenstone Belt in Southern Mali.

ENK plc (LON:ENK) announced the sale of its 5.01% interest in Toledo Mining Corporation (TMC LN) for $698,000 in cash, and the conditional sale of its 18.7% interest in Berong Nickel Corporation for $6,552,000 in cash to World Fund Pte Limited. Both assets were considered non-core by the Directors. The total proceeds from the sale of $7,250,000 will further strengthen the Company's working capital position.

Eurasian Natural Resources Corp (LON:ENRC) has issued a statement about press speculation regarding a possible demerger of its international assets, simply stating that ENRC is determined to deliver value to its shareholders and, as outlined in its preliminary results, the Group continues to review all methods to achieve this, including acquisitions, joint ventures and spin-offs. At present no decision has been made and the Company continues to evaluate various options. This follows an article in the Financial Times which said that ENRC was looking to either demerge its international assets, bring in strategic partners or even sell assets. The article also stated that the Company has yet to bring in a new board or directors as promised and raise its free float to 25% in order to retain its position in the FTSE 100.

Ferrex (LON:FRX) has appointed Justin Longley as General Manager focussed on West Africa. The Company is hoping to bring its Nayega manganese project in northern Togo towards the publication of a maiden resource in Q2 2012 and will continue to evaluate other iron ore and manganese assets in West Africa to complement its existing portfolio of assets which includes the Malelane iron ore project and Leinster manganese project in South Africa.

Frontier Mining (LON:FML) has released an operational update for its BENKala copper project in Kazakhstan. The Company is now consistently mining its targeted 8kt of ore per day and as such remains on track to achieve its targeted FY'12 copper production level of 3.5 to 5kt, with the plant operating at its design capacity of 7ktpa. In April, the Company stated that first copper cathode production will commence in June.

Kalimantan Gold (LON:KLG) has received commitments from investors for 6,000,000 common shares at a 5p per share to raise £300k under its private placement financing announced on April 23, 2012. The Company believes that, combined with its existing funds, it has sufficient working capital for the current year and beyond as it continues its on-going programmes in Indonesia.

Nautilus (LON:NUS) released its 1Q'12 financial results and ended the quarter with $129.5M in cash and cash equivalents. The Solwara 1 Project development continues to advance and is now 40% complete and an off take agreement with Tongling Nonferrous Metals Group was completed during the quarter. Nautilus aims to produce copper, gold and silver from the project and the Company has been granted all necessary environmental and mining permits. Elsewhere the exploration program in the Bismarck Sea off PNG also started during the quarter.

Ortac Resources Ltd (LON:OTC) reported an updated Mineral Resource estimate for its Šturec Project located in central Slovakia. The total Mineral Resource, classified in accordance with the JORC Code (2004) is 25.4 Mt at 1.44 g/t Au and 11.18 g/t Ag. Contained ounces increased by 24% to 1.36Moz Au Eq from 1.1Moz Au Eq. The proportion of the Mineral Resource classified in the Measured and Indicated categories increased by 75% to over 1.0Moz from 579,000oz.

Sable Mining Africa Limited (LON:SBLM) announced that initial results from the Company's reconnaissance drilling campaign at the Nimba Iron Ore Project in south-east Guinea have encountered iron ore with haematite bearing intersections of up to 31.7 metres. The reconnaissance drilling campaign at Nimba commenced in April 2012 and six holes have been completed to date. 

Mining News

Hummingbird Resources (LON:HUM) announced that Julian Barnes has joined the Company as Head of Project Development at Dugbe 1. Julian co-founded RSG, in 1987. From 2004 until 2010, Julian was Executive Vice President of Dundee Precious Metals Inc., and he is currently a director of Serbia-focussed Avala Resources Ltd. 

Churchill Mining plc (LON:CHL) advised that it has filed a further formal letter to the President of Indonesia, seeking support and legal protection in order to achieve an amicable and commercial resolution to the Company's investment dispute in the East Kutai Coal Project. The letter follows initial formal correspondence in November 2011 and also the recent notations on the Indonesian Supreme Court's register of cases, that indicates the Supreme Court intends to reject the appeal by Churchill/Ridlatama in relation to the revocation of the four mining licences that comprise the EKCP. Churchill continues to prepare its claim against the Republic of Indonesia for direct breaches of Indonesia's obligations under the Bilateral Investment Treaty between the United Kingdom and the Republic of Indonesia. The Company will file its claim at the International Centre for Settlement of Investment Disputes in Washington D.C in late May 2012. At the end of December the Company had US$14.3M in cash to pursue the legal appeal process and any subsequent action.

Oil & Gas News

Cove Energy (LON:COV) The latest announcement should further sharpen the focus of Cove's bidding parties. There is a point at which further derisking via successful test results starts to make investors in the Company believe that a better price should be forthcoming, or that the tax authorities' demands are a risk worth taking. In the news:

Testing of the Barquentine-1 well flowed gas at a rate of approximately 100 MMcf/d

Target: a deeper Oligocene sand formation than previously tested Barquentine-2 in March

Test data supports potential unconstrained flow rates up to 200 MMcf/d.

Results confirm requirements for fewer development wells than originally planned.

Flow rates demonstrate a high permeability reservoir. 

Sefton Resources (LON:SER) The independent oil and gas exploitation and production company with conventional and unconventional interests in California and Kansas, is pleased to announce the appointment of Fox-Davies Capital Limited as joint broker to the Company with immediate effect.

Valiant Petroleum (LON:VPP) As stated a few weeks back, 2012 should be a transformational year for the Company as its recent development programme starts to deliver on management's expectations. Approvals, acquisitions, and most importantly opportunity for growth at the drillbit, means the Company is now well positioned for an active drilling campaign this year. In addition to the imminent Timon spud, the Company has planned an active programme which includes the Tybalt discovery, with results expected in a few weeks, and the Tryfan prospect which is set to spud following the Timon spud. In the news: 

The WilHunter semi-submersible drilling rig has arrived on location to drill the Timon prospect

The well is anticipated to spud within the next few days and take around 40 days to complete

Timon is an Upper Jurassic channelised sand play

Gross best estimate prospective resources are estimated by Valiant to be 30 million barrels of oil equivalent (net 3 mmboe) 

Tullow Oil (LON:TLW) Teak-4A appraisal well (26.4% WI) on the Three Points Block, offshore Ghana, encountered thin, non-commercial reservoirs and is thus being plugged and abandoned. Results of this well should not be seen too negatively by the market and are unlikely to impact reserve or resource estimate of three points block. In this news:

Teak-4A appraisal well, located in the West Cape Three Points Block, offshore Ghana. Located 6.1 kilometers (3.8 miles) northwest of the Teak-1 discovery well.

The Teak-4A well was targeting the stratigraphic extension of the Teak discovery area.

The Atwood Hunter rig drilled Teak-4A to a total depth of 2,850 meters (9,348 feet) in water depth of 554 meters (1,817 feet).

Following the completion of operations at the Teak-4A well, the drilling rig will set gauges at the Teak-2A well and perform a drill stem test at the Akasa oil discovery on the West Cape Three Points Block. 

Saints & Sinners: Mining   

Leed Resources (LON:LDP) slipped another 2% to 0.415p during afternoon trading, which has been a very strong support level since the turn of the year. Holders here are still waiting for an update from the company on its investment in Manas Coal, and possibly a few have decided to jump ship to use the cash for other positions, as the volumes were nothing to really shout home about. It will be interesting to see how the share react to this historical support level.

Sellers continued to hit Sirius Minerals (LON:SXX) once again today, pushing the share price 7% easier to 17.5p just before lunch on decent volume. The shares have been weak even though the company recently said that assay results of the third new hole of the York Potash drilling program have delivered a thick intersection of high-grade polyhalite in the Shelf Seam. Preliminary visual interpretation of intersected Shelf Seam confirmed. 25.2 metres of 87.5% polyhalite including 16.2 metres of high grade 95.9% polyhalite. SM3 deflection drilling completed showing a consistent overall seam thickness compared to the "mother" hole with approximately 50 million total polyhalite mineralization. SM6 drilling progressing well with new rig, preliminary results expected in the next few weeks. One of the main fears in the stock at the moment seems to be how they will fund the York Project that could cost up to $2.7 billion.

African Copper (LON:ACU) pushed 10% to 2.625p at the mid-price during afternoon trading on decent volume. The last update from the company on the 16th of April said the strategic review process undertaken by majority shareholder ZCI Limited (ZCI.JO) is ongoing and may have a material effect on the price of the company's securities. ZCI, which has 84.19% stake African Copper, has initiated a process intended to realise value from its investment in African Copper, which may result in the partial or full sale of ZCI's interest in the company.

Namakwa Diamonds (LON:NAD) jumped 6% to 4.3p during afternoon trading after the company said that Gerard Holden, non-executive director and chairman of the Audit, Risk & Compliance Committee of Namakwa Diamonds, has been appointed as an independent non-executive director of AIM listed West African Minerals Corporation.

Orogen Gold (LON:ORE) slipped another 11% to 0.64p during afternoon trading on huge volume. The company recently highlighted that Subsequent to the transfer noted above, on 30 April 2012, Adam Reynolds sold 10,000,000 ordinary shares of 0.1p each at a price of 0.95 pence per share and Paul Foulger sold 10,000,000 ordinary shares of 0.1p at a price of 0.95 pence per share.

Thor Mining (LON:THR) jumped 12% to 1.7p during early trading on decent volume as the shares finally started to rebound from the recent aggressive sell off. The trigger for the selloff was the announcement that the completion of an enhanced ore reserve calculation and detailed mining schedule for Molyhil, is now expected late in May or early June. On that basis, the issue the Molyhil feasibility study is not expected before June 2012.

From the trading floor   

A rebound across the pond toward the end of trading last night set the tone for us from the start of trading today. As I type the FTSE 100 is 30 points better at 5788 (+0.51%) on volume of 435 million shares. The FTSE AIM All-Share Index was 0.16% easier on volume of just under 1 billion shares as we approached the 3pm hour.

Commodities Corner   

Gold - ↓Trading at $1636, down $17 (-1.01%)

Silver - ↓Trading at $30.26, down 29c (-0.91%)

Copper - ↓Trading at $8262, down $13 (-0.16%)

Zinc - ↓Trading at $2000, down $29 (-1.33%)

WTI Crude - ↓Trading at $103.66, down $1.55 (-0.1.39%)

Brent Crude - ↓Trading at $117.28, down 86c (-0.73%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Antofagasta Plc (LON:ANTO) announced its Quarterly Production Report for Q1 2012. Group copper production was 162,900 tonnes in Q1 2012, a 25.5% increase on production in Q1 2011 when Esperanza was commencing production, but a 12.9% decrease compared with Q4 2011, mainly due to planned maintenance and expected lower grades at Los Pelambres and lower throughput at Esperanza. Gold production was 63,500 ounces in Q1 2012, compared with 22,100 ounces in Q1 2011 also reflecting the greater contribution from Esperanza. Forecast 2012 production for Esperanza is expected to remain within the range of 160,000 to 175,000 tonnes of copper and 240,000 to 260,000 ounces of gold, albeit at the lower end of these ranges. Expected production levels at the other three mines remain in line with the previous forecast. Group cash costs in Q1 were 98.1 cents per pound, a 9.0% reduction compared to Q1 2011 but broadly in line with the previous quarter of 97.3 cents per pound. Cash costs excluding by-product credits in Q1 were 163.6 cents per pound compared with 151.3 cents per pound in the previous quarter. Antucoya is expected to start production in H2 2014, with the development cost of the project estimated at US$1.7 billion.

Avocet Mining Plc (LON:AVM) announced its results for the quarter ended 31 March 2012. Gold production was 38,296 ounces (Q4 2011: 46,102 ounces) at cash costs per ounce including royalties of US$850 (Q4 2011: US$773). Ore grades processed were 2.36 g/t Au, higher than recent quarters, however recoveries were slightly lower at 87%. The Company expects to meet its full year guidance of 160,000 ounces maintained at a cash cost of between US$800 - 850 per ounce but expects this to come at the higher end of guidance. The Company's EBITDA from continuing operations was US$28.1 million (Q4 2011: US$27.2 million). The Company had US$100.5 million (31 December 2011: US$105.2 million) of cash as at 31 March 2012. The Inata Gold Mine expansion is scheduled to pour first gold in late 2013. 

Colt Resources Inc. (CVE:GTP) announced that it has completed the previously-announced bought deal private placement of 10,000,000 common shares of the Company at a price of $0.50 per share, for gross proceeds of $5,000,000. Concurrent to the Offering, the Company also announced that it has completed the non-brokered private placement of 7,400,000 Shares to European investors at a price of $0.50 per Share, for gross proceeds of $3,700,000. Aggregated gross proceeds from the raise totals $8,700,000. The net proceeds will be used to accelerate and increase the size of the drilling programme currently underway at the Company's Boa Fe Montemor Gold project in Portugal. 

First Quantum Minerals (LON:FQM) released its 1Q'12 results, where nickel production from Ravensthorpe partially offset lower copper production and prices. Lower grades and labour unrest at Kansanshi pushed copper production down 12% YoY to 65.89kt, despite Guelb Moghrein achieving record ore throughput. Cash costs were up to US$1.59/lb from US$1.15/lb, due to cost price inflation principally related to sulphuric acid, energy and other consumables, although these were in line with the previous quarter. However, nickel production from Ravensthorpe was above budget and at lower costs with 8.57kt of nickel produced at US$5.69/lb. Although earnings were lower that 1Q'11, nickel revenues partially offset the falls in copper price and volumes, meaning sales revenues of US$708.8 were above estimates. 

Ovoca Gold PLC (LON:OVG) has appointed Kirill Golovanov as CEO, effective immediately. Tim McCutcheon, the Company's former CEO, has resigned to pursue other business interests but will remain as a non-executive director and assist Mr Golovanov to ensure a smooth transition. Mr Golovanov was appointed a director of Ovoca effective from 12 April 2012 and prior to that he was the Company's corporate secretary and head of its Russian office. 

Randgold Resources (LON:RRS) 1st Quarter Results look weak - During the quarter political upheaval in Mali temporarily caused the closure of its borders and interruptions to the mine's supply chain. However Randgold's operations were largely unaffected. Instead, operation issues meant that overall production and sales were lower than forecast, in what was already expected to be a weaker quarter. Overall grades were lower than were expected, even allowing for company guidance, with head grade at the Loulo-Gounkoto complex falling to 3.4g/t from 4.5g/t in the previous quarter. Recoveries at Tongon again, although guided lower as mining moved through the transition ore, were below our expectations, down to 80% from 85.1% due to a lack of oxygen supply and power outages. Overall gold sales were down to 271,779oz from 313,624oz in the previous quarter, although higher received gold prices (US$1,707/oz) provided some support. Interestingly, unsold gold rose to 18,218oz from 12,845oz, which had this remained unchanged would have raised revenues by US$9m. Basic earnings per share fell from US$1.33 to US$0.97/sh. There is an analyst briefing at mid-day today which should provide further guidance.

Strategic Minerals (LON:SML) has raised £3.125M before expenses through the subscription to 39,062,500 new ordinary shares at a price of 8p per share, with an attached warrant to purchase one ordinary share at an exercise price of 12p per share exercisable at any time before 30th April 2014. The funds raised will be used in part for the final rail refurbishment payment at the Company's New Mexico site and to develop further near-term revenue generating iron ore projects.  Although later than previously anticipated, completion of the rail upgrade is now imminent which will enable increased shipments of magnetite from the site to begin. According to the Company, for the moment shipments continue to be made by truck.

Stratex International (LON:STI) has released its first channel and chip sampling results from the Pandora epithermal gold Vein in Djibouti. Highlights from the 25 metre-spaced channel-chip sampling include 15.42 g/t Au over 1.65m including 27.10 g/t Au over 0.50m and 17.60 g/t Au over 0.65m and 3.35 g/t Au over 6.90m including 11.20 g/t Au over 1.00m. The Pandora vein is up to 2.5 metres wide at surface and can be traced north-westwards for approximately 1.5 kilometres, partly concealed by wadi sediments, before it disappears under recent basalt flows. The vein occurs in a major fault structure that extends for at least 5 kilometres. Like the Company's Blackrock project in Ethiopia, the vein comprises classic epithermal colloform quartz with silica-replaced calcite in places. Brecciation and strong alteration is also observed in the immediate wallrock. The Company is continuing sampling over the entire 1.5km long Pandora structure and expects to rapidly advance the project to start drill testing in Q3/Q4 along with its strategic partner Thani Ashanti.

Oil & Gas News

Circle Oil (LON:COP) Today's positive operational news on the AASE-11X ST 1 and AASE-12X Wells provide near term catalysts, and while further work will be required before the full potential of the Company's value is reflected in the share price, the news should go some way towards achieving that. Although we do not expect the unrest in Egypt to exert any lasting damage to the oil and gas properties, the Company could do without the sideshow. However, given the further derisking of the NW Gemsa accumulations (proving up the north western flank of the AASE field), and our increased confidence in management's approach to asset development, we are maintaining our target price of 95p and our BUY recommendation. In the news:

AASE-11X ST 1

Well encountered 42 ft of net pay in the Kareem Shagar sand and 22 ft in the underlying Rahmi sand with oil bearing sands present to the base of the reservoir

The Shagar zone perforated

Flowed oil and gas on test at an average rate of 3,500 bopd and 2.64 MMscf/d respectively, on a 64/64" choke

Completed as a sand producer at an initial flow rate of 1,635 bopd using a 32/64" choke

 AASE-12X

Spudded on 25 April 2012

Expected to be an infill Kareem sand producer

Currently at 2,000 ft and aiming for TD of 9,800 ft MD

Production

Combines production (AASE and Geyad) averaged 8,264 bopd (gross) through March 2012 with Circle Oil owning 40%

Production risen to 10,000 bopd following connection of the AASE-11X ST 1 well

Cumulative production from the NW Gemsa Concession has now exceeded 7.9 million barrels of oil.

Tower Resources (LON:TRP) These results do not set the world on fire, and they are most certainly priced in to the current valuation given the recent out-performance in the share price. That said, 2012 should be a positive year for the Company as its Namibian prospects look to match management's expectations. With Namibia now the key focus, the proposed drilling programme is key to unlocking the value within its resource base. In this news:

Spudded Mvule-1 well in Uganda. Trace hydrocarbons encountered and well subsequently plugged and abandoned

Agreed £8 million standby equity distribution agreement ("SEDA") and a $3.125 million loan agreement with YA Global Master SPV Ltd (the loan already drawn down and fully repaid)

Entered £20 million equity finance facility ("EFF") with Darwin Strategic Limited

Arcadia advises that farm-out discussions now at advanced stage.

3D seismic interpretation completed

Independent Competent Person's Report identified 5 targets in the Delta structure

Delta structure which, if oil bearing, are estimated to contain some 9.3 billion barrels of recoverable oil and 14.5 TCF of gas

CPR estimate for Tower's risked prospective EMV10 of the Delta targets alone is $1,866 million

Premier Oil (LON:PMO) Stingray Exploration well (15/13b-11) results are disappointing, however  this should not be seen too negatively by the market as company fundamentals remain strong given the backdrop of -  wider programme of exploration, appraisal and development drilling throughout 2012; on track to achieve its medium term production target of 100 mboed,  which would bolster its cash flows; healthy balance sheet and low equity valuation values; PMO is also a potential target, especially as it bulks up its North Sea position. In this news:

Stingray Exploration well (15/13b-11) drilled on Licence P1212 (Block 15/13b) reached a total depth of 2,129 metres. The well is being plugged and abandoned as a dry hole (50% WI).

Benteng-1 in the Buton Block (WI - 30%) currently drilling. Results are expected in June

Carnaby on UK Block 28/9 (Catcher block. WI - 50%) spud date estimated May.

Valiant Petroleum (LON:VPP) The well on the Orchid exploration prospect has encountered a 50 foot pay zone with low average oil saturations, but there are not sufficient to warrant further drilling; thus the well has been plugged and abandoned. This is the second disappointment after the Cladhan South exploration prospect (WI 30%) last month. All eyes will now be on Tybalt drilling results which are expected this month. In this news:

Orchid exploration prospect (WI 30%) located in Block 29/1c the UK Central North Sea.

The well was drilled to a total depth of 9,333 feet. The well encountered a Chalk zone of over 280 feet which exhibited oil shows throughout and higher-than-anticipated porosities.

Initial interpretation of the wireline log data by Valiant suggests the well has encountered a 50 foot pay zone above a large Chalk interval with low average oil saturations.

Saints & Sinners: Mining   

Premier Gold Resources (LON:PGR) slipped 15% to 0.575p on big volume after the company said that it has raised gross funds of GBP350,000 through a placing of 70,000,000 new ordinary shares at 0.5 pence per share, predominantly with institutional investors. The funds will be used to advance exploration work at the Cholokkaindy gold project in Kyrgyzstan. This work will include further geochemistry, conventional trenching as well as continuous profiling using a bulldozer, which also is needed to prepare sites for diamond drilling. Richard Nolan, Chief Operating Officer, commented: "The board recognises the support of existing shareholders and the willingness shown by new investors in the recent fundraise, the proceeds of which will be utilised on an aggressive exploration programme on the Cholokkaindy licence to include diamond drilling on two of the four gold prospects already identified within the licence." It's the last few lines of this update that really caught my eye, as the company looks to embark on an "aggressive" exploration programme. We will continue to monitor this one closely.

It was no surprise to see a few profit takers show up in Atlantic Coal (LON:ATC) after the recent rally up from 0.3p to 0.48p. The shares were 8% to 0.42p easier during afternoon trading on decent volume. The shares have been in bull mode since the company started to say all the right things to the market, with the most recent update highlighting production from its Stockton Colliery in Pennsylvania for the first three months ended March 31 increased 12% compared to the same period last year. Production at Stockton for the first quarter increased 12% to 31,729 tons of clean coal during Q1 2012 compared to the equivalent period in 2011 (2011: 28,376 tons). During the period the Company removed 715,691 bank cubic yards ("BCY") of overburden (2011: 658,785); 85,911 tons of run of mine coal was washed (Q1 2011: 62,000). Demand for Stockton's high quality anthracite remains strong with production from Pennsylvanian anthracite mines struggling to meet demand; as a result there has been a substantial increase in the average sale price of Pennsylvanian anthracite with a 1Q average price of $166.30 per ton compared with a 1Q 2011 price of $134.25, an increase of 24%. Railroad diversion is now complete allowing the working of over approximately 1.0 million tons of coal of previously unworkable reserves, which will enable the Company to increase production at the mine over the coming months.

Berkeley Minerals (LON:BMR) pushed 5% to 4.15p on decent volume after the company said that it has received the official large-scale Mining License 6990-HQ-LML. This follows clearance by the Zambian Competition and Consumer Protection Commission, of the acquisition of the underground un-mined or partly-mined ore bodies and other above-ground assets of Alberg Mining and Mineral Exploration Ltd at Kabwe, Zambia, by Berkeley Mineral's subsidiary Enviro Processing Ltd (EPL). The registration has now been endorsed to EPL and Berkeley Mineral has lodged the endorsed license at Zambia's Mining Cadastre. The License covers a mapped area of 703 hectares. As the license holder, Berkeley Mineral now intends to activate a Zambian government survey to peg and verify the land areas concerned, obtain an official pegging certificate, submit its revised Environmental Management Plan and then make an application to extend the license for a further 25 years.

Edenville Energy (LON:EDL) continued its recent rally again today, pushing another 5% higher to 0.31p on big volume once mre. The shares have been slowly rising ever since the company said it is making preparations for the upcoming field season at the Mkomolo Basin on the Rukwa Coalfield Project in South Western Tanzania, and new site vehicles have been purchased. Camp is being up-graded and additional geological staff recruited in preparation for the 2012 work program. Focus of the 2012 drill campaign will be on the Rukwa Coalfield Project and the nearby properties of Namwele and Muze. Drill contractor is expected to mobilize during May as is the geophysical contractor. Company is fully funded to undertake the planned 2012 work program. I think the company highlighting they are fully funded to undertake the planned 2012 programme really got the attention of the retail market, as they can relax thinking they would be diluted once again.

Arian Silver Corp (LON:AGQ) slipped 6% to 22.25p as profit takers showed up to the recent rally in the stock. The shares have moved from 18p up to nearly 25p over the last few trading sessions, so it was no real surprise to see a few people taking a little off of the table at the historical resistance at 25p.

From the trading floor   

Another red day in the FTSE 100 today, with the major index slipping 50 points to 5762 (-0.86%) by the time the US opening bell had sounded. Volumes were a little better than the last few sessions, with 500 million shares changing hands before the US open. The weak sentiment was done no favours by the weak US ADP Employment report that came in a lot weaker that the 170k expected, with the actual number hitting the wires at 119k. The FTSE AIM All-Shares Index was 0.07% higher on volume of 850 million shares.

Commodities Corner   

Gold - ↓Trading at $1647, down $15 (-0.91%)

Silver - ↓Trading at $31.45, down 50c (-0.51%)

Copper - ↓Trading at $8297, down $37 (-0.44%)

Zinc - ↓Trading at $2029, down $20 (-1.01%)

WTI Crude - ↓Trading at $105.66, down 48c (-0.45%)

Brent Crude - ↓Trading at $119.09, down 56c (-0.47%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Balamara Resources Limited (ASX:BMB) announced the discovery of high-grade silver mineralisation at its Montenegro Base Metals Project (Monty). These results come from two holes drilled at the end of 2011 to provide samples for metallurgical testing. The most significant intersection on the first hole was 5.5m (from 181.5m) at 507.7 g/t silver, 4.01% zinc, 2.83% lead and 0.28% copper and 11m (from 161m) at 14 g/t silver, 5.13% zinc, 3.44% lead, and 0.21% copper. The second hole drilled along strike from the first hole gave best results of 8 m (from 147m) at 129.7 g/t silver, 2.45% zinc, 1.50% lead and 0.29% copper  

Beacon Hill Resources (LON:BHR) has released the Scoping Study results for its Arthur River Project magnesite project in Tasmania. Total capex is estimated at A$155 with an A$42M NPV10 based on 292kdtpa ROM producing on average 100kdtpa calcined magnesia over the proposed 17 year mine life. Although the project is non-core, the Company will progress the project to full feasibility, complete the current drilling program to upgrade the inferred resource and secure a JV/ offtake partner. 

Berkeley Mineral Resources (LON:BMR) has finally received the official large-scale Mining Licence 6990-HQ-LML. Good news for the Company; it can now proceed with the pre-feasibility study at Kabwe, lead and zinc project and continue process testing. 

Cluff Gold (LON:CLF) has appointed Hendrik Johannes Faul, Anglo American's Head of Mining, as an independent non-executive director. This appointment has been made as a result of the Board's decision to review its structure following the appointment of John McGloin to the position of Executive Chairman (designate). As part of the Board review, Tim Wadeson has also agreed to step down as Non-Executive Director of the Company at its next Annual General Meeting. 

DiamondCorp (LON:DCP) has appointed Michael Toxvaerd to the Board as a Non-executive Director. Mr Toxvaerd is Chief Investment Officer of HBG Management Partners, a UK private equity firm serving high net worth private and institutional clients in the Arabian Gulf. He was also founder, CEO and Deputy Chairman of NeutraHealth Plc, an AIM listed company. 

Premier Gold Resources (LON:PGR) has raised £350,000 gross through a placing of 70M new ordinary shares at 0.5p per share. The funds will be used to advance exploration work at the Cholokkaindy gold project in Kyrgyzstan including further geochemistry, conventional trenching as well as continuous profiling using a bulldozer, which also is needed to prepare sites for diamond drilling. The Company has also decided to implement a share option plan granting options over 40M shares to directors at 0.5p per share, the same price as the placing.

Rambler Metals and Mining plc (LON:RMM) has provided a project update from its Ming Copper-Gold Mine in Newfoundland and Labrador's Baie Verte Peninsula, Canada. On 24 April 2012 the Company completed a record gold pour of 1935 ounces over a two week period. In those two weeks, milling throughputs averaged 706 tonnes per day with an average gold grade of 7.39 g/t. With improvements to the mill's throughput and run of mine head grade, April's gold production has exceeded 3,700 ounces.

Red Rock Resources plc (LON:RRR) reported that it has successfully completed on the sale to Anglo Pacific Group plc (APG LN) of a 50% interest in the Company's 1.5% gross production royalty over any production from the Mt Ida iron ore project. The Tranche 1 payment of US$6,000,000 for 0.3% of the GRR has been settled by the payment of US$3,899,999.81 and the issue and allotment to Red Rock of 416,161 new Anglo Pacific shares. These shares were valued at approximately $2,139,730 at the close of trading on 1 May 2012. The remaining tranches of the acquisition total US$8 million and will be paid as follows:

Tranche 2: US$4M payment for a further 0.225% GRR following the results of a positive definitive feasibility study (DFS), a formal decision to mine and that 20% of the pre- production capital costs outlined in the DFS are provided for.

Tranche 3: US$4Mfor a further 0.225% GRR following the commencement of commercial production, taking the total to 0.75% GRR.

Yamana Gold (LON:YAU) has released slightly below consensus 1Q'12 results despite production being up 4% to 278,832 gold equivalent ounces (234,532oz gold and 2.2Moz silver). Revenue was US$560M for the quarter, but cash costs on a co-product basis were up sharply to US$518/oz from US$449/oz (1Q'11). Production is still forecast at 1.2M-1.3M gold equivalent ounces for FY'12 and total capex spend for the year is US$665M. The Company has cash and equivalents of US$868M.

Oil & Gas News

Sefton Resources (LON:SER) Today's RNS should provide further support to Management's drive to create value for shareholders as it makes progress across its assets. The Company has a portfolio which offers balance between near term and long term drilling activities spread across its operating regions (California and Kansas). With a very active campaign to expand and increase its asset and production base respectively, we believe that the Company is well placed to grow in 2012. In the news:

In Kansas

Exploration programme underway

Pipeline system on track to flow first gas Q3 2012

Completion of the LAGGS sales line

Ongoing discussions with potential suppliers of third party gas, and sales agent has been appointed to market gas 

In California

Increase in oil production to 142 bopd following workover (220 bopd recorded in recent days)

A further increase in production expected with four more well workovers

Cyclic steaming showing a 200% improvement in production post-steaming on the Yule #5 well

The full field steam flood report on schedule to be received in June this year. 

Wentworth Resources Limited (LON:WRL) News that the well has encountered a gas bearing zone between 1,106 and 1,109 metres is a positive development. The Company will now conduct Drill Stem Test to establish the flow rate from the new reservoir interval, not previously encountered in the Mnazi Bay Block. However, previously no significant channel sands were identified in two of the three proposed targets (Pliocene and Miocene), which was a disappointment. The next few weeks will be crucial for the overall commerciality of the project. In the news:

The well, which was spudded on February 1, 2012, has now been drilled to a depth of 2,671 meters and are conducting testing operations. 

Full logging operations have been completed.

The zone to be tested is  a new reservoir interval, not previously encountered in the Mnazi Bay Block.  

The reservoir is a clean limestone of Pliocene age which exhibited strong gas shows during drilling (4.3%  total gas).

Petrophysical interpretation of wireline logs indicates a pay zone with 17% porosity and 78% hydrocarbon saturation indicating good reservoir quality.  

Leni Gas and Oil (LON:LGO) Following the evaluation of number of strong expressions of interest for sale of its Spanish assets, the Company announced that it has granted the highest bidder the exclusivity until 31st May 2012 in return for a cash deposit. A number of conditional cash bids to buy the assets have been received at a very significant premium to the original €2.6 million paid for these assets, and the Company will now be working closely with the bidder to close a transaction.Today's news bodes well for the long term future of the Company. The divestment could potentially represent the best opportunity for the Company in light of the announcement for the commencement of Trinidad field operations by July 2012. A plan for recompleting the two productive wells, MN-44 and MN-209 presents an opportunity for the revenue flow by the end of the year. In the news:

LGO confirmed that it had granted the preferred bidder for its Spanish assets exclusivity until 31st May 2012 to complete definitive documentation.

Due diligence is now well advanced and the parties have had preliminary discussions on the structure of the deal, details of which are expected to be concluded in the coming week.  Final agreement is expected to be concluded in May, although this cannot be guaranteed.

The Company also reports that final arrangements for the farm-in to the Advance Oil Company Ltd leases in the Moruga North area of Trinidad, previously announced in August 2011, are now being concluded and the Company expects to commence field operations by July 2012. 

Initial operations to be conducted by LGO include the recompletion of two productive wells, MN-44 and MN-209, and the drilling of one new well.

Saints & Sinners: Mining   

African Minerals (LON:AMI) slipped 5% to 491p on almost 3 times the average daily volume by the end of lunch after the company said Alan Watling has notified the board of his intention to retire and resigned as chief executive with immediate effect. The company said it has begun searching for a new CEO. Executive Chairman Frank Timis will assume Watling's responsibilities until a replacement has been appointed.

UK Coal (LON:UKC) continued its rich vein of form again today, pushing 14% higher to 23p before the end of lunch. Even after the recent rally up from 13.5p to the current level of 23p, the shares are still a long way off of the 52 week high of close to 48p.

Norseman Gold (LON:NGL) jumped 10% to 3.9p after the company said gold production for the quarter ended March 31, at 6,258 ounces, down 41% on the December 2011 quarter, but said it expects an improvement in the production profile for the next quarter. Gold production since the end of the quarter has increased and the mill is currently operating 24 hours a day, 7 days a week. Cash balances at the end of the quarter totalled A$11.4 million. A$6.1 million of this cash balance is committed to cash-backed environmental bonds. Pre-strip at North Royal is now well advanced with higher grade hard rock now exposed. Harlequin underground mine has consistent gold production with a new mine plan and schedule being undertaken with the objective to increase gold production. Pit Optimization for potential near term future production from other historical open pit mines is soon to commence. To ensure working capital is sufficient for all aspects of the operations, Norseman Gold agreed to place a total of 64 million shares at 6 cents (or 4 pence) per share and 32 million warrants exercisable at 12 cents each on or before 27/4/2015 to Tulla Group to raise A$3.84 million. The Tulla Group interest will increase from 7.15% to 18.93%. The warrants will be subject to shareholder approval.

Another stock that has been on a fantastic run over the last few sessions is Atlantic Coal (LON:ATC). The shares have been full steam ahead ever since the company said that it has completed the Norfolk and Southern railroad diversion at its Stockton colliery together with an operational update at Stockton, adding that an independent mining report says that with the diversion complete, production of 160,000 tons of clean coal per annum is achievable in 2012. The shares were another 8% high to 0.48p during afternoon trading today.

Thor Mining (LON:THR) continued to slide once again today, trading 8.4% easier to 1.5p by the end of lunch. The shares have been out of favour since the company said back on the 27th of April that the release of the feasibility study assessment of its Molyhil tungsten and molybdenum project in Australia's Northern Territory has been delayed by administrative issues and won't be ready before June. The full report will include a total ore reserve calculation and mining schedule. Executive Chairman Mick Billing said: "We are obviously disappointed by this further delay, which is administrative in nature and is not a result of any adverse findings for the prospects for Molyhil."

Metal-Tech (LON:MTT) jumped another 27% to 13p at the mid-price during afternoon trading, which was a massive surprise seeing as the company said on Friday that The Board of Metal-Tech acknowledges the recent rise in the share price of the Company. It can confirm that it is unaware of any reason for such movements and consequently does not believe there is a need to make an announcement in relation to this rise. The price had jumped from just over 8p to almost 15p before they issued that statement, but the shares started to heat up again today. If the companies own board said on Friday it knew of no reason for the move, it would seem ludicrous to think there can be anything behind this move once again.

Orogen Gold (LON:ORE) slipped another 8% to 0.77p at the mid-price during afternoon trading, continuing its bearish move since the company updated the market yesterday on progress. The update said it completed its geological and structural mapping campaign at the Gindusa and Rusman gold mines, adding that high gold grades have been confirmed from sampling at Gindusa mine. The company has received gold assay results from its underground channel and grab sample program. Very high gold grades up to 1 meter at 63.4g/t Au confirmed from underground channel sampling at the Gindusa mine. Four gold-bearing mineralized structures identified at Gindusa in an 80 meter wide shear corridor, including one not previously known. Selected chip samples at Gindusa as high as 133g/t Au. Mineralized zones at Gindusa remain open along strike and down dip. Two gold target zones identified at Rusman, with underground grab samples assaying up to 82.5g/t Au. Targets at both historic mines untested by drilling to date, leaving scope for discovery of significant extensions to the previously mined zones. Drilling contract due to be signed imminently.

From the trading floor   

The FTSE 100 was trading 20 points higher at 5758 (+0.36%) just after the 2 o'clock hour, albeit on painfully thin volume of 270 million shares. The FTSE AIM All-Share Index was trading 0.54% easier on volume of just over 730 million shares.

Our Stock of Interest   

An interesting pairs trade that has caught the eye based on the above snippet in the Oil & Gas Section, is Long Borders & Southern (LON:BOR) and Short Falkland Oil & Gas (LON:FOGL).

As you can see from the chart below, the pair have traded very closely historically. That was until the speculation that Borders had struck oil started to do the rounds and sent the shares moon bound. To us this would seem like odd price action as Falkland Oil & Gas will not be drilling until June and that is likely to take at least 30 days to drill, while Borders are dueupdates on the testing over the coming weeks. Of course the testing might not show positive results, but that would in turn hit all the Falkland plays. The view is that FOGL should edge back down to trade more in line with BOR. An interesting pair to watch nonetheless.

Borders & Southern (White Line) - Falkland Oil & Gas (Red Line)

Commodities Corner   

Gold - ↑Trading at $1669, up $4 (+0.23%)

Silver - ↑Trading at $31.21, up 15c (+0.51%)

Copper - ↑Trading at $8398, up $4 (+0.05%)

Zinc - ↑Trading at $2049, up $20 (+1.01%)

WTI Crude - ↓Trading at $104.66, down 21c (-0.22%)

Brent Crude - ↓Trading at $118.93, down 55c (-0.46%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com 

Mining News

African Barrick Gold plc (LON:ABG) announced that it has received final approval from the Tanzanian Vice President's Office Responsible for Environment, for the potentially acid forming ("PAF") waste rock permit at its North Mara mine, with immediate effect. The granting of the PAF permit, together with the non-acid forming ("NAF") permit will allow the Company to progress its major waste stripping programme in the Gokona pit at North Mara in order to open up higher grade zones in the open pit in the second half of 2012.

African Minerals (LON:AMI) CEO Alan Watling has announced his retirement and resigned from the board and as CEO today. Until a suitable replacement is found, Executive Chairman Frank Timis will assume Mr Watlings responsibilities.

Alexander Nubia International inc. (CVE:AAN) announced its latest results from the surface-trenching program at the Hamama gold-zinc VMS property in Egypt. Recent trenching of the surface trace of drill holes AHA-008, 009 and 011 fills the transition gap between the Central and Eastern Zones. Best results include 46 m at 0.78 g/t gold, 14.7 g/t silver, 0.19% copper and 5.06% zinc, and 48 m at 0.50 g/t gold, 16.4 g/t silver, 0.11% copper, and 2.65% zinc.

Bullabulling Gold (LON:BGL) has appointed Mr Brett Lambert as MD, with Jeff Malaihollo continuing as a non-exec. Mr Lambert is a mining engineer with over 30 years of operations, project development and corporate management experience including development of gold projects in Coolgardie where Bullabulling is located.

Continental Coal (LON:COOL) has released its MarQ'12 report. On first glance sales appear weak, but this reflects the exceptional December quarter when the Company was able to take advantage of additional train availability and the Company remains on track for 600ktpa export thermal coal sales. Operations performed slightly ahead of budget with 479,003t (+1% QoQ). The Company purchased 65,661t of ROM from nearby operations (-24%QoQ) due to a lack of availability and this resulted in a -2% drop in coal processed, although 23% above budget. However, overall yields were up 9% for Ferreira to 60.4% from 55.6% (Vlakvarkfontein production is unwashed) resulting in a 7% increase in coal produced. On first glance coal sales appear disappointing at -13% QoQ; however, export sales of 145,756t are on budget for 600ktpa and the fall was due to a very good December when the Company was able to take advantage of addition train availability and utilise stockpiles to increase exports. Domestic sales were also down -10% QoQ to 278,284t; however this reflects the Company focusing on Eskom sales, which actually increased and for which it receives a higher price. As a result we expect domestic revenues to have been higher for the quarter than in December.Overall revenues of US$20.6M were down -13.7% and gross profit was US$4.12M down -23%, but again this reflects the exceptional DecQ, with the MarQ on or above budget. We expect the share price will open weaker this morning, but overall, the Company is on track to meet its annualised sales targets.

Forte Energy (LON:FTE) released its quarterly activities & Cashflow Report for March 2012. Overall it's been a productive quarter with the total JORC resources increasing by 30% to 37Mlbs with further results from Guinea expected and 13,300m of drilling completed during the period. The Company finished the quarter with A$2.128m in cash.

Mindoro Resources Ltd. (CVE:MIO) provided an update on the strategic partnership process for the two-stage development of the Agata Nickel Project. The Company has received three preliminary proposals to form a strategic partnership for the Project including two proposals from major trading groups involving equity placement and an off-take focused on funding development of the Agata Stage 1 direct shipping ore (DSO) project. The Company is also modifying the processing project flow-sheet developed for the PFS to focus on relatively lower capital cost atmospheric leach nickel processing.

Norseman Gold Plc (LON:NGL) provided an update on operations at its Norseman Gold Project and the restructuring programme being implemented to improve its production profile and financial performance. A complete review of operations has been completed and a resultant restructuring programme implemented. Production activity is being focussed on mining from the North Royal Open Pit to generate positive cashflow. Gold production from the Norseman Gold Project during the three-month period to 31 March 2012 totalled 6,258 ounces, down 41% on the December 2011 quarter. The short term Mine Plan has identified an Indicated JORC Resource of 200,000 tonnes at 6 g/t gold and an Inferred Resource of 200,000 tonnes at 6 g/t gold with the aim being to produce 80,000 ounces of gold from these Resources over the next 12 months. To ensure working capital is sufficient for all aspects of the operations, Norseman Gold agreed to place a total of 64 million shares at 6 cents per share and 32 million warrants exercisable at 12 cents each on or before 27/4/2015 to Tulla Group to raise A$3.84 million. The Tulla Group interest will increase from 7.15% to 18.93%. 

Sierra Rutile Limited (LON:SRX) announced that it has entered into an agreement with the Government of Sierra Leone to pay, in cash, PAYE taxes that have historically been satisfied through the issuance of shares in Sierra Rutile's subsidiary Sierra Rutile Holdings Limited ("SRHL"). The Government's interest in SRHL, earned in accordance with the Sierra Rutile Act was 7.1% at 31 December 2011. Furthermore, Sierra Rutile will pay a prepayment for the next two years of estimated PAYE tax. In all, Sierra Rutile will pay to the Government a total of US$17 million.

Sirius Minerals Plc (LON:SXX) announced the mineralogical assay results of the third drill hole ("SM3") drilled at the York Potash Project. Preliminary visual interpretation of the intersected Shelf Seam confirmed 25.2 m of 87.5% polyhalite (25.3% K2SO4) including 16.2 m of high grade 95.9% polyhalite (27.7% K2SO4). SM3 deflection drilling was completed showing a consistent overall seam thickness compared to the "mother" hole with approximately 50m total polyhalite mineralisation. This result compares well with the previous two drill holes which intersected approximately 49.3 m ("true" thickness) at 66% polyhalite (SM1) 34.3m at 78% polyhalite (SM2).

Oil & Gas News

Red Emperor (LON:RMP) Today's quarterly update highlights what has been a very strong six to nine months for Red Emperor, and subsequently provides investors with the sense of scale that the Company is targeting. The Company will be hoping for another strong performing in the next few months as it embarks on an active programme which includes the drilling of a second exploration well in Puntland, and a second well in Georgia. In the news:

• March 2012 Quarter highlights; drilling commenced at Puntland, placement raised approximately GBP8.18 million (A$13 million)

• Site nearing completion in readiness to receive the drilling rig for Shabeel North

• A potential agreement with Range Resources to participate in the prospective Nugaal Basin Offshore Block

• Despite severe weather conditions, ongoing works to get the site ready for the Namakhvani well in Georgia

• Preparations had begun on the 2D seismic program on Block VIb in Georgia

• Engaged new independent technical consultants, NTD Energy, to perform a fresh review of all of the seismic and geological data across the top 3 Kursebi prospects previously identified

Serica Energy (LON:SQZ) The Company has taken another step forward towards the monetization of its prospective block resources as it successfully commenced extensive 3D seismic survey on the Luderitz Basin offshore Namibia. The survey should provide the Company with valuable pre-drill data to assist in evaluating the Basin's true potential. Investors can also be buoyed by management's aggressive and accelerated approach towards the exploration programme which could be the catalyst to unlocking the value within the Basin. In the news:

• Preparing to deploy streamers for an extensive 3D seismic survey in the south eastern portion of Serica's blocks

• 4,150 square kilometres, comprises one of the largest 3D seismic surveys to be undertaken offshore Namibia

• The survey is planned to take three months to complete

• Main aims; demonstrate hydrocarbon potential through the presence of hydrocarbon indicators, map potential pinch out prospects, and fully delineate a large four-way dip closed structure which underlies the survey area

• The cost of the survey is to be met by BP who will earn a 30% interest in the Licence

Sound Oil (LON:SOU) After Acquisitions, the focus is now on Delivery: With interests in 17 E&P licences in Italy,the focus now has shifted towards monetizing this assets, which we believe is a step in the right direction. Its Italian E&P programme for 2012 consists of: re-establishing production on one concession; drilling two new appraisal wells targeting existing discoveries; and complete testing of a newly drilled gas discovery to demonstrate its commerciality. The Company has no debt and intention of farming-out its stake in the selective Italian blocks would significantly strengthen the financial position. In this news:

• Loss after tax was £6.2mm compared with £15.9mm in 2010 which had included a loss on sale of part of the Bangkanai licence of £14.2mm

• The Group's cash balance was £6.2mm (2010: £4.4mm).

• Exploration and evaluation expenditure in 2011 was £3.8mm(2010: £1.1mm)

Max Petroleum (LON:MXP) The Company has expanded producing fields to six from one in less than a year. This is a significant achievement, and has established a platform for explosive hydrocarbon production growth. Production for the year ended 31 March 2012 was up by 33% y-o-yto 2,807 bopd and the Company expects growth rate in excess of 50% per year for at least the next two years. The Company also announced that appraisal wells ASK-2 and SAGW-3 are flowing production at 616 bopd and 805 bopd respectively. In this news:

• The ASK-2 well in the Asanketken Field has begun testing in a Jurassic reservoir from depths between 1,302 and 1,305 metres, producing at a stable rate of 616 bopd, with approximately 3% water.

• The SAGW-3 well, the second producing well in the Sagiz West Field, has begun testing in a Triassic reservoir from depths between 1,213 and 1,222 metres, producing 44 API gravity crude at a stable rate of 805 bopd, with no water.

• Testing of the KZIE-2 well in the East Kyzylzhar I Field has been delayed due to mechanical difficulties and weather related issues in the field. The Company is moving a workover rig onto the KZIE-2 location and will announce test results from the well as soon as possible.

•    Shaikan-4 Appraisal Well
•   
o    Drilled 6km to the west of the Shaikan-1 discovery well
o    will be completed as a producer and tied to the Shaikan-1 and Shaikan-3 Extended Well Test facility.
•    Shaikan-5 Appraisal Well
•   
o    Drilled 6 km to the north-east of the Shaikan-2 appraisal well
o    sidetracked (Shaikan-5B) and casing has been set at the depth below 3,400m in the Kurre Chine-B formation in the Triassic.
o    Preliminary well logs indicate a continuous oil column in the Jurassic and hydrocarbon presence in the Triassic Kurre Chine-A and Kurre Chine-B
o    consistent with results obtained elsewhere in the field, most recently with the Shaikan-4 appraisal well.
•    Shaikan-6 Appraisal Well
•   
o    9km to the east of the Shaikan-2 appraisal well
o    Drilled to the depth of 3,455m in the Kurre Chine-B formation in the Triassic where casing has been set.
o    Preliminary evaluation indicates a continuous oil column in the Jurassic Barsarin, Sargelu, Alan and Mus formations and extending into the Butmah formation.
o    Well logs from the Triassic indicate the hydrocarbon presence in both the Kurre Chine-A and Kurre Chine-B formations.
o    Shaikan-6 has recorded the deepest oil shows so far as indicated by both logs and core samples obtained by the Company.
o    Oil shows have been recorded below the Company's originally prognosed Jurassic OWC
o    A testing programme is planned to verify the deeper oil potential.
•    Shaikan Field Export Pipeline Project
•   
o    Technical evaluation underway
o    Bids currently being received as part of the on-going tendering process for the export pipeline site construction and installation
•    Sheikh Adi-2 Exploration Well
•   
o    Second exploration well on the Sheikh Adi block, north of the Sheikh Adi-1 exploration well
o    Sheikh Adi-2 is expected to spud June 2012
•    Akri-Bijeel Block: Aqra-1 Appraisal Well
•   
o    Appraisal well to assess the Bijell discovery on the Akri-Bijeel
o    Drilled 8 km to the north-west of the Bijell 1 discovery well.
o    Aqra-1 is at a depth of 2,273m (TD of 4,700m)
•    Ber Bahr-1 Exploration Well
•   
o    A well testing programme commenced
o    Results expected in summer 2012.

Max Petroleum (LON:MXP) bucked the overall negative market trend to push 2% higher during early trading to 11p after the Company said it has successfully sidetracked the NUR-1 pre-salt well at the Emba B prospect on Block E around drilling tools that became stuck in early April. After setting intermediate casing at a depth of 5,683 metres, the Company will drill ahead through a thin layer of salt using high density drilling mud designed to handle the high pressure transition in the salt window. Once through the salt, the Company will set another short section of casing prior to the well penetrating the exploration objectives in the Carboniferous and Devonian. The Company expects the well to reach total depth of 7,250 metres in June 2012. The shares have continued to bounce nicely off of the major support I highlighted at 10p.

Another stock that has been slowly ticking better is San Leon Energy (LON:SLE). The shares were 2% higher during early trading at 10.875p as it would appear the Canadian sellers that had almost 28% of the Company after the Realm Energy deal may only have about 4% left. We are also looking for the Company to update over the coming weeks on its joint drilling with Talisman Energy. Possibly this update could be the shot in the arm the shares need to get back over the 11p hump?

Nighthawk Energy (LON:HAWK) jumped another 25% to 4.5p during early trading, continuing on from its bullish move on Friday when the Company said in an update on its 75% owned and operated project at Jolly Ranch in the Denver-Julesburg Basin, Colorado, that work-over and geo-science programmes continue on schedule and that early results show increased potential for multi-zone production without hydraulic fracture stimulation. Plans for drilling of new wells are now being accelerated. Down-hole work completed on eleven wells. Further top-side work now required to facilitate production increase. Production from Jolly Ranch during the first quarter of 2012 was affected: average production was 33 barrels a day. The Company expects the second quarter to be a better guide to the level and consistency of production from existing wells, whilst the third quarter should see the impact of new drilling.

Essar Energy (LON:ESSR) jumped 10% to 148p during afternoon trading on decent volume following on from the bullish move towards the back end of last week. On Thursday of last week the Company said it has renewed a pact with state-run Bharat Petroleum Corp. (500547.BY) to sell and buy refined fuel products until 2016. Mumbai-based Essar said in a statement it also has similar trade deals with other state-run refiners Indian Oil Corp. and Hindustan Petroleum Corp. Essar owns a 360,000-barrel-a-day refinery at Vadinar in western Gujarat state, and plans to expand it to 400,000 barrels a day by September.

Gold Oil (LON:GOO) jumped another 10% to 7.2p on big volume as investors continued to jump aboard the bullish view from Faraday Investments. The Company did say back on the 15th of March, "The farm out process is progressing well with the data room open and available to prospective partners from early February. Considerable interest in the opportunity has been shown by a large number of major international oil companies and in order to accommodate the level of interest and at the wishes of some potential farminees the bid deadline has now been extended to early May 2012." Possibly the market is getting ready for another update on the interest in this block as we push in to May.

Empyrean Energy (LON:EME) jumped 11% to 8p during early trading after the Company said "Aurora launched an on market takeover offer for Eureka today at A$0.45 per share valuing Eureka at A$107 million. Both Aurora and Eureka are partners with Empyrean in the Sugarloaf Project in Texas, USA. Commenting today, Empyrean CEO Tom Kelly said "The offer by Aurora for Eureka indicates that there is strong interest in Eagle Ford Shale assets in Texas."

Wessex Exploration (LON:WSX) pushed 15% to 10p during early afternoon trading after the Company said total production from the two Eagle Ford horizontal wells in which the Company has a 7.9% interest was 482 barrels of oil equivalent per day for the period ending March 31. Total combined production from the nine producing Olmos vertical wells in the Olmos reservoir, in which Global had a 15% working interest, during the March quarter until the effective date of the sale of the Olmos wells on Feb 1 was 479 barrels of oil equivalent per day. During the quarter the Company appointed Albrecht and Associates and RBS Morgans Limited to seek buyers for the Company's interest in the Eagle Ford; the buyer identification aspect of the sale process continued during the quarter. Work continued on the processing and interpretation of the data from the high resolution 2D seismic survey undertaken during the September quarter in Global's offshore Namibian exploration blocks. Work continued during the quarter, in conjunction with Wessex Exploration, in identifying suitable parties to farm into the Juan de Nova Est. Permit as well as continuing an assessment of available data and an extensive review of literature on the North Morondava Basin in which the permit lies. Board continues to review opportunities for acquisitions, joint ventures, or investments in the resources sector, both domestic and overseas, which may enhance shareholder value. A number of new opportunities were assessed during the quarter and the Company will continue to evaluate these opportunities as they are presented.
  Saints & Sinners: Mining   

Sirius Minerals (LON:SXX) slipped 8% to 20.5p after initially rallying to 23p during early trading. The move came after the Company reported the completion of the Detailed Scoping Study for the York Potash Project, and said that the study confirms technical and economic viability of the project. Phased approach to development with three year initial construction period, targeting first production in early 2017. Estimated Phase 1 start-up capital cost of $2.7 billion for mining and processing of 5 mtpa of Polyhalite ore to produce 1.4 mtpa of Sulphate of Potash, or SOP. Phase 2 expansion to produce 4.1 mtpa of SOP by 2024 or earlier.

Aquarius Platinum (LON:AQP) slipped 13% to 126p after the company reported a pre-tax loss for the three months ended March 31 and said thCt attributable production decreased by 7% quarter-on-quarter to 97,802 ounces. Revenue $124.76 million. Pre-tax loss $11.38 million. Basic loss per share 139 cents. Average PGM Dollar prices increased in the quarter - Platinum and palladium rose 5% and 8% respectively while rhodium fell 8%. Attributable production for the third quarter decreased by 7% quarter-on-quarter to 97,802 ounces. Net loss of U.S.$9.4 million recorded on reduced production. Cash balance at quarter end U.S.$207 million.

UK Coal (LON:UKC) jumped 30% to 19p during afternoon trading on decent volume following on from Fridays bullish Annual Financial Report. The Company was subject of a lot of press over the weekend, and most highlighted the fact the company still has a vast property and land portfolio that it may look to sell off or spin out to release potential value to shareholders.

Atlantic Coal (LON:ATC) moved 11% higher to 0.47p during early afternoon trading. The shares have been on a fantastic run from 0.30p to the current level of 0.47p, during that time the company have said production from its Stockton Colliery in Pennsylvania for the first three months ended March 31 increased 12% compared to the same period last year. Production at Stockton for the first quarter increased 12% to 31,729 tons of clean coal during Q1 2012 compared to the equivalent period in 2011 (2011: 28,376 tons). During the period the Company removed 715,691 bank cubic yards ("BCY") of overburden (2011: 658,785); 85,911 tons of run of mine coal was washed (Q1 2011: 62,000). Demand for Stockton's high quality anthracite remains strong with production from Pennsylvanian anthracite mines struggling to meet demand; as a result there has been a substantial increase in the average sale price of Pennsylvanian anthracite with a 1Q average price of $166.30 per ton compared with a 1Q 2011 price of $134.25, an increase of 24%. Railroad diversion is now complete allowing the working of over approximately 1.0 million tons of coal of previously unworkable reserves, which will enable the Company to increase production at the mine over the coming months.

Sylvania Platinum (LON:SLP) moved 7% better during early trading after the Company announced an update of its production and development operations in the Bushveld complex of South Africa. The Sylvania strategy is to realise profitable metal production from a series of PGM tailings and near surface mining development projects that do not require the high costs of deep reef mining. Sylvania Platinum Limited and Aquarius Platinum South Africa (SA) (Pty) Ltd ("AQPSA") have reviewed the study compiled by Dowding, Reynaard and Associates ("DRA") that indicates the economic viability of the Everest North Project. The Everest North project mining right application ("MRA") has been submitted and accepted by the Department of Minerals Resources ("DMR"). Everest North Joint Venture between Sylvania with Aquarius Platinum (SA) (Pty) Ltd ("Joint Venture"). During the past 3 months, Sylvania and AQPSA, a wholly owned subsidiary of Aquarius Platinum Limited ("Aquarius Platinum") have reviewed the DRA study on the Everest North Project (formerly the Vygenhoek prospecting area) which was prepared as contemplated by the agreement announced on 3(rd) June 2011. It was found that the study has successfully demonstrated the viability of mining for PGMs at Everest North and thereafter treating and concentrating the PGMs at the Everest South Metallurgical Plant to produce saleable PGM concentrate.

Firestone Diamonds (LON:FDI) finally woke up during early trading today, moving 7% higher to 7.6p on decent volume. The shares have slipped from just over 30p this time last year, to a recent low of 6.875p. The Company recently did a raise of £14.69 million at 8.5p, so this would be the next area of interest for me. We will be watching how the market reacts as they approach the placing level once again, as the investors that backed the company up at 8.5p may continue to back them sub the placing level.

Central Asia Metals (LON:CAML) moved 5% better during afternoon trading after the Company announced commencement of the first production of cathode copper at its 10,000 tonne per annum Solvent Extraction - Electro Winning ("SX-EW") plant at Kounrad, Kazakhstan. In a short timeframe, of just over 18 months, CAML has completed the construction phase of the SX-EW plant for less than the budgeted capital expenditure and has now commenced first copper production on site. Processing of the pregnant leach solution ("PLS") from the tailings dumps and solution ponds in the SX plant commenced on 20 April and the copper content was gradually increased until it reached a suitable level for electro-winning. The EW cells were then energised and plating of the copper in solution onto stainless steel cathodes commenced. The amount of copper being plated reached 20 tonnes per day by 24 April and, on 29 April, the Company harvested a total of 25 tonnes of copper cathodes. The harvesting of cathodes will be undertaken daily and the first sale and shipment of 300 tonnes of copper is expected in May 2012.

Strategic Natural Resources (LON:SNRP) continued its very impressive rally again today, pushing another 6.6% to 32p. Looking through the last few updates I found this interesting little snippet "The Board of SNR is pleased to report on progress being made in South Africa by its 74% owned subsidiary, Elitheni Coal (Pty) Ltd ("Elitheni"). The Company has completed its internal assessment of the resource update based on the 2011 drilling season on Elitheni's Phase 1-4 exploration areas. The Company is pleased to report that it has identified an additional circa 53 million tonnes of coal resource which will be added to the existing 150 million tonnes modelled and independently verified by Golder Associates in 2010. The additional 53 million tonnes of coal based on the 2011 drilling season comprises approximately 883,000 tonnes on a measured basis, 21 million tonnes on an indicated basis and 31.8 million tonnes on an inferred basis. Although this resource update comprises an internal assessment, the Company has engaged Golder Associates to update the Competent Persons Report ("CPR") accordingly and expect these numbers to be verified during the second quarter of this year." Could the market be getting itself ready for the CPR report mentioned here?

Orogen Gold (LON:ORE) slipped 7% to 0.89p during afternoon trading after the company said that high gold grades have been confirmed from sampling at Gindusa mine. The company has received gold assay results from its underground channel and grab sample program. Very high gold grades up to 1 meter at 63.4g/t Au confirmed from underground channel sampling at the Gindusa mine. Four gold-bearing mineralized structures identified at Gindusa in an 80 meter wide shear corridor, including one not previously known. Selected chip samples at Gindusa as high as 133g/t Au. Mineralized zones at Gindusa remain open along strike and down dip. Two gold target zones identified at Rusman, with underground grab samples assaying up to 82.5g/t Au. Targets at both historic mines untested by drilling to date, leaving scope for discovery of significant extensions to the previously mined zones. Drilling contract due to be signed imminently.

From the trading floor   

The FTSE 100 continued is bearish form once again today, as fears over the Spanish economy continue to weigh on traders' minds. A report over the weekend suggested that almost 1 in 4 are out of work in Spain. As I type the FTSE 100 is 25 points easier at 5753 (-0.42%) on painfully thin volume of just over 300 million shares half an hour before the US opening bell. The FTSE AIM All-Share Index was actually bucking the overall negative trend, pushing 0.15% higher on volume on 685 million shares by the 2pm hour.

Our Stock of Interest   

African Barrick Gold (LON:ABG)

As you will see from the chart below, the stock is currently trading at a very interesting technical level, and has recently broken its short term down trend.

The gold sector on the whole has seen a sell off during Q1 2012. This was to be expected considering the impressive run the price of gold had in H2 2011.However, at the current share price of 358p I believe ABG has been oversold, is fundamentally cheap and presents both an attractive long term investment opportunity and trading opportunity for those clients with a shorter investment time frame. Our Fox-Davies target price is £4.59. Important to note is that our model is at the very bottom end of ABG production forecasts and at the top end of costs. In addition, most gold stocks trade at a premium to their NAV, whilst our model has no premium built in whatsoever. The 123.6% Fibonacci retracement level sits around the 326p area, so we could well see a test of this if the 350p support level breaks. I believe the share price will bounce off these levels with a short term target of 439.8p.

The Q1 results on 19th April were slightly below our expectations but there is plenty of upside in the pipeline.

The main issues ABG faced in Q1 were:

- Power shortages. To date ABG has relied on grid power which has been unreliable in recent times and resulted in unplanned maintenance shutdowns.

- At Buzwagi, recoveries suffered as a result of a higher component of talc in the ore. Thus tonnes mined were down due to reduced excavator and haul truck availability.

However, we believe there are plenty of positives in the near term that should bode well:

- We expect the power supply issues to completely disappear by the next quarter as diesel power back up is fully implemented

- At Buzwagi, the talc issue is expected to have been resolved by adding a Talc suppressant. We anticipate this will lead to an increase in production of at least 10%.

- At Bulyanhulu, enhancements to the flotation plant during Q1 should result in higher recoveries from Q2. We also expect higher mill throughput at Bulyanhulu in Q2 as increased maintenance in Q1 meant critical components were replaced. This should help to increase recovery.

- The first quarter was always expected to be the worst quarter, followed by steady improvements quarter-on-quarter as the grades improve at North Mara

- We believe as a house that the gold price will increase in H2 to around the US$1,800 - $2,000 level which will reduce cash costs and increase revenues.

In addition, with work progressing on the Gokona-Nyabigena underground extensions and a fourfold increase in the previously declared resource at its Nyanzaga project announced in January 2012 (now over 4Moz)

Commodities Corner   

Gold - ↓Trading at $1652, down $9 (-0.57%)

Silver - ↓Trading at $30.81, down 51c (-1.64%)

Copper - ↑Trading at $8388, up $43 (+0.71%)

Zinc - ↑Trading at $2039, up $40 (+2.01%)

WTI Crude - ↓Trading at $104.20, down 69c (-0.66%)

Brent Crude - ↓Trading at $119.30, down 52c (-0.43%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com

Mining News

Afferro Mining Inc (LON:AFF) confirms that following discussions with the Cameroon Government, it will be provided the opportunity to access the proposed railway line through the south of Cameroon. The Company has been given assurances by the Government that there will be third party access to the infrastructure that is expected to be constructed. Afferro is in discussions with the government regarding the possibility of participating in the financing of the special purpose vehicle being set up to develop the railway.

Aquarius Platinum Limited (LON:AQP) announced its Financial and Production Results to 31 March 2012. Attributable production for the third quarter decreased by 7% quarter-on-quarter and minus 20% year on year to 97,802 4E ounces. The Company blamed seasonal absenteeism, safety stoppages, labour "go-slows" and poor ground conditions for the poor production result. This has resulted in a net loss of US$9.4M for the quarter a decrease of $34. 7M compared to the previous corresponding period (pcp), March 2011. On-mine EBITDA of $2.2 M was also lower compared to $76.6 M in the pcp. The Company has a cash balance at quarter end of US$207M.

Bisichi Mining (LON:BISI) released its Final Results to the end of December and reported a strong 2H, which lifted EBITDA to £1,150,000 up 49% on £770,000 in FY'10. Production at Black Wattle in South Africa reached 135kt per month and new markets established for lower quality products, helped to increase overall yields with domestic prices rising 30% since June. The Company expects strong performance to continue in 1H with prices looking sustainable and 87,500t export allocation at Richards Bay Coal terminal. The sale of Ezimbokodweni Mining for ZAR 54.2M cash is now only conditional on consent of the South African Department of Mineral Resources. Significantrevenue was generated by the UK retail property portfolio. Bisichi acquired a 12.5% interest in a shopping centre in Eastbourne for just under £1M cash; the net initial yield is 8%. London and Associated Properties PLC manage this and the Company's other properties and voids across the portfolio were at the very low level of 2.7%. The Company has proposed a Final Dividend of 3p per share payable in cash in addition to the interim dividend of 1p per share.

Central Asia Metals plc (LON:CAML) announced the commencement of the first production of cathode copper at its SX-EW plant at Kounrad, Kazakhstan. Processing of the pregnant leach solution ("PLS") from the tailings dumps and solution ponds in the SX plant commenced on 20 April. The amount of copper being plated reached 20 tonnes per day by 24 April and, on 29 April, the Company harvested a total of 25 tonnes of copper cathodes.The first sale and shipment of 300 tonnes of copper is expected in May 2012. The SX-EW plant is currently only operating at 70% of its design capacity which will rise as commissioning work continues and processing of PLS increases. It is anticipated that the ramp-up in production to the design capacity of 10,000 tonnes per annum will be reached by the end of 2012.

Continental Coal (LON:COOL) has entered into Sale and Purchase agreements for prospecting rights adjacent to its current open cast mine at Ferreira. Payment will be a monthly royalty on ROM production from the C-lower, C-upper and B-lower coal seams the Company currently mines. Mine planning work on the Prospecting Right has already started to incorporate the adjacent block into the Ferreira Coal Mine's existing mine plan which is expected to add between 350-400kt ROM. A 15 hole exploration and resource confirmation drill programme has been finalised, with drilling having commenced, and the Company lodged a Section 102 Application with the Department of Minerals and Resources in September to allow it to conduct mining activities on the Prospecting Right. Ferreira only has sufficient reserves to last until the end of the year and these additional resources will substantially enhance the mine life. The Company is in further negotiations with additional parties to acquire further Prospecting Rights that are both contiguous or in close proximity to Ferreira on similar terms.

Coal of Africa (LON:CZA) released its 3Q'12 report in which, although production rose, sales fell sharply. ROM and export quality coal production were both up on the previous quarter by 8% to 1,170,223t and 13% to 601,491t respectively. Despite this, export sales fell 13% to 452,888t, which the Company blamed on lower production at Vuna. Domestic sales also fell by 3% to 212,803t and sales to Eskom by -65% to 103,456, although this was due to excess stockpile sales in the previous quarter. At Vele, over 39kt ROM and 2,59m cubic meters of overburden were extracted, allowing the processing plant to be commissioned and a trial delivery of thermal coal was made to the Musina siding. The board also carried out a preliminary review of the Makhado coking coal project DFS with a further review and update scheduled in the June quarter. Independent tests commissioned by the Company confirmed the outcome of detailed tests conducted by ArcelorMittal South Africa of the hard coking coal classification for the Makhado Project product.

Karelian Diamond Resources Plc (LON:KDR) announced that three microdiamonds have been recovered from material extracted during its drilling programme at Seitaperä kimberlite pipe located in the Kuhmo region of Eastern Finland. The micro-diamonds observed were white in colour, transparent and octahedral. The material analysed consisted of 270 kg of drill core taken from several bore holes. The results indicate that new zones of the Seitaperä pipe are diamondiferous but caution must be exercised as this is a small sample and therefore may not be representative of the entire pipe.

Sirius Minerals Plc (LON:SXX) announced the completion of the Detailed Scoping Study for the Company's York Potash Project. The DSS was compiled by the Sirius and York Potash management teams. The DSS outlines plans for a phased development of up to 4.1mtpa of Sulphate of Potash ("SOP") by 2024 and first production targeted for 2017. The Phase 1 capital cost is estimated to be US$2.7 billion to deliver 1.4mtpa of SOP. The Phase 2 capital expenditure will involve a further US$3.3 billion which could be internally funded from cashflows. The estimated Free on Board ("FOB") cash operating cost would be US$225/t of SOP and US$65/t after by-product credits. These capital and operating cost metrics deliver positive free cashflow in 2018, the second year of production, and a current project after tax net present value of over US$6.0 Bn is estimated. The next milestone for the Project is to deliver the maiden JORC resource statement at the end of May 2012.

Sylvania Platinum (LON:SLP) after reviewing the Dowding, Reynaard and Associates study on the Everest North Project, has, along with its JV partner Aquarius Platinum (AQPSA), submitted a mining right application to the DRA on the 25th April and registered the project with the Mpumalanga Department of Economic Development, Environment and Tourism. Once the mining right is issued, it is expected that AQPSA will contribute the mining right to an unincorporated joint venture that will be formed to manage and oversee the project and Sylvania will pay R6M to AQPSA for its interest in the Joint Venture. Sylvania and AQPSA will share equally in the profits and have equal representation in the management of the Joint Venture.

Toledo Mining Corporation plc (LON:TMC) updated shareholders on the operating activities of the Berong nickel mine for the quarter ended 31 March, 2012. Production of run-of-mine ore from the mine in the quarter was 183,000wmt at an average grade of 1.88% Ni. Two shipments were sent to China in Q1 including 48,700 wmt @ 1.82% Ni and 54,000 wmt @ 1.63% Ni. Owing to a delay in the granting of a new tree cutting permit, the mine currently has a limited mining area which is impacting the amount of high grade ore which can be produced. The new tree cutting permit was expected to have been received during the first quarter of 2012, but the Company received a letter from the Department of Environment and Natural Resources (DENR) stating that it has been decided that the application be referred to the Palawan Council for Sustainable Development (PCSD) for review. As a result, to maximise the ore shipping tonnage, the Company has decided to revise the ore sales plan from a single 1.8% grade of nickel, to a combination of 1.8%, 1.6% and 1.5% grade shipments.

ZincOx Resources (LON:ZOX) has completed an initial Production Test at its Korean Recycling Plant, producing its first zinc oxide concentrate and demonstrating the process works. Although the process has yet to be optimized for full scale production, the Company has said that the initial results are very promising. During the initial production test, the plant ramped up to 50% of capacity and produced zinc concentrate and Direct Reduced Iron. Zinc recoveries ranged between 87%-96% and iron metallisation between 75%-88%.The operation of the final piece of equipment, the hot briquetting machine, will occur during the next test run. After reviewing the operation, the Korean Ministry for the Environment has issued a Start Up permit which will allow regular deliveries of Electric Arc Furnace Dust (EAFD) to the plant site and further testwork to be carried out.

Oil & Gas News

Gulf Keystone (LON:GKP) Ahead of the analysts' visit this week, the update to the wider market is timely. Of most note in the update is the results for the Shaikan-6 appraisal well, which has potentially deepened the oil-water contact ("OWC") on Shaikan. While further testing will be required, it is notable as this could increase the resources and reserves on the block, unlike the other wells which are more likely to affect the reserves classification. Baghdad continues to be an issue, but we believe that given time this will resolve itself, at which point all the Kurdistan players will be in play, and the likes of Exxon, BP, Shell and Total will all swoop to take out the Kurdistan incumbents; GKP along with a handful of others will be at the top end of this list. With the shares trading at the bottom of their range and the analysts' visit for the remainder of the week, we believe that this news, along with these other factors, will start to push the shares towards the top end of the trading range, and towards out 350p price target. In this news:

• Shaikan-4 Appraisal Well 

o Drilled 6km to the west of the Shaikan-1 discovery well

o will be completed as a producer and tied to the Shaikan-1 and Shaikan-3 Extended Well Test facility.

• Shaikan-5 Appraisal Well 

o Drilled 6 km to the north-east of the Shaikan-2 appraisal well

o sidetracked (Shaikan-5B) and casing has been set at the depth below 3,400m in the Kurre Chine-B formation in the Triassic.

o Preliminary well logs indicate a continuous oil column in the Jurassic and hydrocarbon presence in the Triassic Kurre Chine-A and Kurre Chine-B 

§ consistent with results obtained elsewhere in the field, most recently with the Shaikan-4 appraisal well.

• Shaikan-6 Appraisal Well 

o 9km to the east of the Shaikan-2 appraisal well

o Drilled to the depth of 3,455m in the Kurre Chine-B formation in the Triassic where casing has been set.

o Preliminary evaluation indicates a continuous oil column in the Jurassic Barsarin, Sargelu, Alan and Mus formations and extending into the Butmah formation.

o Well logs from the Triassic indicate the hydrocarbon presence in both the Kurre Chine-A and Kurre Chine-B formations.

o Shaikan-6 has recorded the deepest oil shows so far as indicated by both logs and core samples obtained by the Company. 

§ Oil shows have been recorded below the Company's originally prognosed Jurassic OWC

o A testing programme is planned to verify the deeper oil potential.

• Shaikan Field Export Pipeline Project 

o Technical evaluation underway

o Bids currently being received as part of the on-going tendering process for the export pipeline site construction and installation

• Sheikh Adi-2 Exploration Well 

o Second exploration well on the Sheikh Adi block, north of the Sheikh Adi-1 exploration well

o Sheikh Adi-2 is expected to spud June 2012

• Akri-Bijeel Block: Aqra-1 Appraisal Well 

o Appraisal well to assess the Bijell discovery on the Akri-Bijeel

o Drilled 8 km to the north-west of the Bijell 1 discovery well.

o Aqra-1 is at a depth of 2,273m (TD of 4,700m)

• Ber Bahr-1 Exploration Well

o A well testing programme commenced

o Results expected in summer 2012.

Longreach Oil & Gas (CVE:LOI) Progress is being made on advancing the Company's programme, and with a healthy balance sheet the Company has retained flexibility to make decisions based on the best interests of its shareholders, rather than necessity. With an increasingly better balanced portfolio of exploration assets, the Company is in an increasingly better position to start to leverage from its acreage positions and, with the work completed to date, to advance its prospect inventory and unlock the potential within its asset base. In this news:

• Geological and Geophysical work programme completed on Foum Draa and Sidi Moussa offshore licences

• Farm-out of offshore licences underway

• Close of Sidi Moktar farm-in during September, giving Longreach operatorship and a net 50% working interest (post ONHYM back in) 

o G&G interpretation of existing data on Sidi Moktar is well underway 

§ 6,000km of 2D seismic

§ 43 historical wells drilled on the acreage

o Prospect evaluation underway

• 1,674km of 2D seismic on Zag was completed in January 2012, with processing and interpretation expected to be completed this year

• Completion in September of 608km 2D infill seismic programme on Tarfaya, concentrating on the J North prospect. Processing and interpretation of the new seismic nearing completion

Aminex (LON:AEX) The Company took another step forward towards the monetization of the permit resources as it announces the completion of drilling operations and plans for testing the gas discovery made in the Ruvuma basin. The potential of the Ntorya-1 well to flow at commercial rates, coupled with the prospectivity of the Ruvuma basin, means that all the ingredients for near-term growth are now in place. In the news:

• The Caroil-6 rig has now been released from the Ntorya-1 well

• Preparation for the planned test sequence underway

• The 25metres sandstone interval will now be tested to establish the level of production that can be obtained, and results of the testing will be announced once available

• Ntorya-1 is located only about 20 kilometres from an existing gas-to-power facility at Mtwara

• The Company has also commissioned new geological and seismic studies to establish the extent of the Ntorya discovery and to locate further prospects in the Ruvuma Production Sharing Agreement (PSA)

• Offers from potential partners will thus be invited to participate in the next round of exploration, commencing with the acquisition of additional seismic data later in 2012

Aurelian (LON:AUL) A number of positive updates from today's announcement. The Company is making good progress across all the blocks, which will be pleasing for investors. Still, one wonders if management's heart is fully in this programme, or if they are just marching time to be taken out after their very public spat with investors. What is needed is a concerted programme of re-engagement with the investors, a demonstration that they are fully committed to unlocking value for them. Either that or a change of management. The owners of the Company, the Shareholders just to be clear, deserve better than this turgid update. In the news:

• The Company's first exploration well in the Zechstein 'reef' oil play in the Torzym concession, Central Lowlands of Poland, spudded on 29 April 

o 35mmbbls gross STOIIP (3.1mmbbls net recoverable to Aurelian) targeted

o approximately 50 days to drill with a cost €2.4 million net to Aurelian

o Success on Sosna-1 would de-risk additional prospect & lead inventory

o Fieldwork for phase one of surface geochemical sampling on the Cybinka and Torzym concessions is now complete and samples are being analysed

• Awarded 100% of the "Kotlarka" concession in central Poland 

o Work programme consists of studies in Year 1 and 50km 2D seismic acquisition in Years 2-3

• Additional equity in the Brodina licence in Romania following Europa's exit.

o The work programme for Years 1 and 2 of the extension on the Initial Exploration period has been fully completed, and Years 3 and 4 have now been entered with a reduced work program due to commence Q2 2012.

Cadogan Petroleum PLC (LON:CAD) These results mark the end of the Company's journey from investment vehicle to junior E&P. These results are not about the reserve base, or the income, but about the fact that the Company completed a major transaction with Eni and also recently reshuffled its management team, both of which should herald the start of the new phase of growth. In the news:

• Partnership with Eni resulting in Eni owning 60% of the Group's interest in the Zagoryanska licence and 30% of the Group's interest in the Pokrovskoe licence

• A $30 million (excluding VAT) drilling programme on the Pokrovskoe field

• A three-well work-over programme on the Zagoryanska field

• Total capital expenditure of $21.3 million (2010: $12.1 million) during the year

• Net cash and cash equivalents at year-end of $65.0 million (2010: $36.4 million)

• Appointment of a new Chairman and Chief Executive Officer.

Oilfield Services News

Hunting (LON:HTG) has announced the completion of the sale of Hunting Canadian Airport Holdings and its subsidiaries including Field Aviation for a consideration of £7.5M (C$12.0M) to Amavco Inc. The consideration is payable in cash, subject to the adjustment. This sale albeit small has been long awaited and represents the sale of a non-core peripheral business.

Wood Group (LON:WG.) Wood Group announced the awardof the topsides detailed engineering and procurement support contract for the semi-submersible central processing facility in the Ichthys field development, located off the northwest coast of Australia. The Ichthys LNG Project is expected to produce 8.4million tonnes of LNG and 1.6 million tonnes of LPG per annum, along with approximately 100,000 barrels of condensate per day at peak. Detailed engineering is scheduled to be completed in the 3rd quarter of 2013 and first production is expected by the end of 2016.

Rig Count News. The Baker Hughes Rig Count is the key barometer for the oilfield services industry and in particular the drilling contractors. Last week's data (week ending (27/04/12) still remained positive for the industry as a whole despite declines .The U.S. Rig Count stood at 1945 down 27 on the previous week and up 127 year over year with the number of land rigs at 1878, down 26. The number of oil rigs stood at 1,328, down 9 on the previous week. Gas rigs stood at 613, down 18 as US gas prices remain low with the directional/horizontal rig count at 1,382, down 27. The Canadian rig count was, due to seasonality effects, down 12 on the previous week.

Mining News

Discovery Metals (ASX:DML) has released the DFS for the Zeta Underground Mine at the Company's Boseto copper project in Botswana. Total capex to first production is expected to be US$26.8M with C1 cash costs of US$1.82/lb. Average production over the 11 year mine life is forecast at 1.5mtpa for 18kt Cu and 800koz Ag pa. Project NPV10 is calculated at US$131M at US$3/lb Cu and US$30/oz Ag. The Company plans to start open pit production at Boseto later in the current quarter and will produce 36,000 t Cu & 1.1 Moz Ag pa in concentrate. The Zeta underground is a key component of the overall development strategy for Boseto, becoming a model for further underground development with other underground targets already identified at Plutus, Zeta Ne, Selene and Mango.

Beacon Hill Resources (LON:BHR) has released its1Q'12 Activities Report. Unsurprisingly, heavy rainfall during the wet season impacted stripping and mining with ROM coal down QoQ from 49,288t to 29,235t. The current wash plant was interrupted by power issues during the quarter, which have been resolved by the acquisition of an independent power generator and total saleable coal increased from 13,741t to 21,952t with the Company on track to produce and export 100,000t of coking coal this year. With first coking coal due to be exported in early 2H'12, potential rail allocation and expansion of the existing 120tph to 400tph by year end, we believe BHR is well positioned to either consolidate its position and existing relationships in Tete through M&A/ JVs with other groups without infrastructure access or become a takeover target itself.

Sylvania Platinum (LON:SLP) has released a disappointing, although not unexpected 1Q'12 update and will delist from the ASX. Sylvania's dump operations were severely impacted by industrial action at the host mines where striking staff prevented Sylvania's non-striking staff from entering the mine premises. The Company believe this, combined with safety stoppages and tropical storms lost about 4 weeks production during the quarter and production fell to 7,506oz PGM. Despite this, EBITDA was still positive at R5.7M (US$0.7M). Cash on hand of R175 million (US$22.8 million) at period end and as off close of business today the Company will no longer be trading on the ASX.

Thor Mining (ASX:THR) has announced that its updated Feasibility study on the Molyhil Project, originally expected at the end of December, will now not be published before June due to administrative issues.

UK Coal (LON:UKC) has released a very good set of final results. The group made a profit before exceptionals of £65.2M compared to a - £74.3m loss in FY'10, with revenue of £488.2M, including £67M of property sales. Total production rose to 7.5Mt from 7.2Mt in FY'10 and the average sales price rose to £2.48/GJ from £1.97/GJ. As a result, net bank debt was reduced to £55M from £141M and total net debt, including generator loan/prepayments reduced from £242M to £139M.

African Mining & Exploration (LON:AME) has signed a MOU with Sahelienne des Mines SARL, a Malian registered company that owns the Tekeledougou exploration permit in Southern Mali. The MOU gives AME an exclusive option to enter into an exploration joint venture following a six month due diligence period, during which time AME will complete a preliminary exploration programme. This deal fits well with AME's existing Karan and Diatassan projects both in Mali. Currently the Company is continuing its auger drill programme using its own rig at Diatassan and is well funded despite its low market capitalisation.

ECR Minerals (LON:ECR) has released the drill results for its Sierra de las Minas gold project area in La Rioja Province, Argentina, that caused it to be suspended yesterday after press speculation caused a rise in the price. Assay results for 7 holes have been released with the best intersections including 3.0m @ 21.5 g/t gold including 1.0m at 50 g/t gold. The results suggest that the high grade gold mineralisation continues to depth. Drilling continues and further assays are pending; trading in the Company will now resume. 

Oil & Gas News

Salamander Energy (LON:SMDR) Accelerating the appraisal programme will undoubtedly be accretive to the Company's value, and the exposure to the explosive upside potential of the exploration programme provides investors with a route to the next stage of growth. However, this is offset to some extent by the concerns surrounding the announcement of the amendments to the production platform currently under construction. The fact that a revised development plan has been identified that will make significant savings and been decreed to be so transformational that it must be enacted at this late stage (hence the need for the raising), raises the question "why this wasn't considered in the first place?" It doesn't engender confidence that the development team will not make the same mistake again. While this is a concern and will have to be addressed by management, they must also be applauded for having the strength of character for holding their hands up and taking this very bold step in the best interests of shareholders. This rights issue seems to be at an excessive discount, which gives rise to the belief that there seems to be more than just a whiff of desperation to this raising, but at least all existing shareholders will get the opportunity to follow their investment. In this news:

• The net proceeds of the Rights Issue will be used to maximise value from the existing focused portfolio through a combination of: 

o enhancement of the Bualuang oil field, Gulf of Thailand through the addition of platform-based oil processing facilities which are expected to reduce operating costs, extend the economic field life and potentially release further recoverable oil volume;

o contracting a second rig in the Gulf of Thailand to accelerate exploration and appraisal drilling with the plan to drill at least six exploration wells in parallel to the development drilling programme to be undertaken by the Atwood Mako rig; and

o investment in a potentially transformative exploration drilling campaign in the North Kutei Basin, Indonesia.

Nighthawk Energy PLC (LON:HAWK) The Company took another step forward towards the monetisation of Jolly Ranch as early results of the work-over and geo-science programmes have been encouraging. The programme has provided valuable additional data and initial conclusions suggest increased potential for production from a number of hydrocarbon-bearing zones. Subsequently, shareholders can expect a production increase through Q2 as wells that were unavoidably off-line in Q1 due to the work-overs are brought back online. Management appear to be making all the right steps towards rehabilitating the story and creating value for shareholders. In the news:

• Work-over and Geo-science programs continue on schedule with two-rigs on site

• Down-hole work completed on eleven wells

• Further top-side work now required to facilitate production increase

• New log information on third party wells and new seismic data has also been acquired and processed

• Initial results show increased potential for multi-zone production without hydraulic fracture

• Plans for drilling of new wells now being pushed forward

• Whilst remedial work on equipment and infrastructure will take a little longer than expected, there are encouraging signs that the acreage gives access to a wider range of potential oil producing zones than expected

Xcite Energy (LON:XEL) Today's announcement marks the beginning of new transition period for Xcite Energy as it moves towards the development of its reserves in the Bentley field. The Company reported 2P reserves of 116mm bbl attributed to Bentley field (100% WI). The Company is fully funded to finance the first leg (Phase 1A) of the development programme. On the valuation front, Excite is trading at $3.2/boe based on the reported 2P reserves. In the near-term we are positive on the stock and given that it is at the bottom of its trading range, we would expect the shares to trade up. However, against this must be tempered the fact that there is going to be a fund raising on the horizon, and the question over the long term productivity. In this news:

• Oil reserves of the type 1P, 2P and 3P for the Core Area of approximately 96mm bbl, 116mm bbl and 140mm bbl, respectively.

• NPV10 (after tax) value of oil reserves for the Core Area of approximately $1.076 billion, $1.464 billion and $1.921 billion on a 1P, 2P and 3P basis, respectively.

• Phase 1A development costs in aggregate are accounted for in 2012, for which the funding resources are available to the Company and the work programme has commenced.

• Phase 1B to commence from 2013. Four additional production motherbore wells are planned to be drilled during 2013, 2014 and 2015 for Phase 1B.

• The Company is in advanced discussions with a group of commercial lending banks to secure an RBL facility, which will provide significant project debt to be used as a material part of the overall funding required for Phase 1B.

• The $360 mm development expenditure estimated for 2013 is required to be funded from external sources to achieve first oil in Phase 1B.

Jupiter Energy (ASX:JPR) The Company has secured advance payments for its trial crude production from J-50 and J-52 wells at Block 31, Kazakhstan. This is a positive announcement as it reduces working capital requirement and provides cash for the continued development of the field. In this news:

• Trial production from J-50 and J-52 wells has commenced with a combined daily production rate of an expected ~600 bopd.

• Entire production is transported by road tanker to a 3rd party processing and storage facility.

• Jupiter Energy has entered into agreements with two oil traders for the sale of Jupiter's oil at the storage facility for a price of $58/bbl.

• Oil traders have agreed to 100% prepayment for the aggregated supply of 6,000 tonnes of oil on the basis that each will take.

Oilfield Services News

Newpark Resources (NYSE:NR) Newpark reported Q1 results which were marginally below market expectations. Q1 revenues were up 30% compared with Q1 2011 owing to acquisitions gains but net income was flat at $0.16 per share and down from $0.22 in Q4 2011.

Results were impacted by the deterioration in completion services and equipment rental business and reduced activity in certain dry gas regions in the U.S. The group is taking actions to address the margin-related issues and remains focused on improving profitability and to further build the foundation for solid revenue growth.

Newpark is a well-positioned mid-sized oilfield services company with attractive growth opportunities in the US shale basins and in international markets including the fast growing Far East and Brazilian market. This growth profile is not reflected in the undemanding and favourable valuation compared with its peers. We continue to believe current price levels to be an excellent entry point into Newpark's stock.

Saints & Sinners: Oil & Gas

Red Emperor Resources (LON:RMP) slipped 3% to 34p after the company said that it is placing, 19.5 million new ordinary shares at 32 pence per share to raise GBP6.24 million before expenses. The funds raised under the placing will be used for exploration activities at the company's high impact exploration projects in Puntland and in the Republic of Georgia. We (Fox Davies) as a shop were also announced as joint broker to the company. We currently have a BUY recommendation on the stock, with a 65p price target. Copies of the note are available on the web site.

Range Resources (LON:RRL) slipped 5% to 10p which has historically been a strong support level for the company. Range have a 20% joint ownership of the Puntland well in Somalia, along with Red Emperor (20%) and Horn Petroleum (60%).

Borders & Southern (LON:BOR) pushed 2% to 86p on decent volume after the company said it has raised GBP46.5 million in a share placing to fund further exploration and appraisal work around the Falkland Islands, after announcing a large condensate gas find on Monday. "The proceeds of the placing will strengthen our already robust balance sheet and allow Borders & Southern to complete additional work including additional seismic and analysis to better understand the recent drilling results," Chief Executive Howard Obee said. The funds will be used to acquire additional three-dimensional seismic surveys within its existing acreage, to enable further analysis of the results of the Darwin East well, where it made the gas find. the funds will also be used for general working capital purposes, including further contingency funds for the upcoming exploration well, it said. The company placed 55.3 million shares at 84 pence each with institutional shareholders. Now to raise that amount of cash in the current economic climate I think was a job well done!

Forum Energy (LON:FEP) slipped 15% to 197p during afternoon trading after jumping well over 100% yesterday. The shares have been full steam ahead since the company issued a report by Weatherford Petroleum Consultants on the interpretation of new 3D and 2D data acquired over the service contract 72 license area, or SC72, in 2011 shows an improvement in the resources previously known and supports the case to proceed with the drilling program. Forum will continue discussions with major shareholders, joint venture partner and advisors to determine how the SC72 drilling program, which it anticipates will cost a total of $75 million, will be funded. The bulletin boards are alight with many bits of speculation, all of which must be taken with a large pinch of salt until the company gives another update.

Enquest Plc. (LON:ENQ) pushed 2% higher during afternoon trading after the company said it has agreed to buy a 15% interest in the Kraken oil discovery from privately owned First Oil PLC for up to $144 million, raising its stake to 60%. Following the deal, which is subject to regulatory, partner and shareholder approval, First Oil will hold a 15% stake in Kraken, Nautical Petroleum PLC (NPE.LN) will hold 25% and Enquest will hold the remainder. Enquest proposes to pay First Oil between $90 million and $144 million, to fund the associated costs of developing the oil find, in relation to First Oil's remaining 15% interest in Kraken. The amount payable depends on the gross 2P reserves (reserves with a 50% chance of production) in Kraken. If below or equal to 100 million barrels of oil equivalent, Enquest will pay only $90 million. If between 100 and 166 million barrels, Enquest will pay up to an additional $54 million. If the reserves are above 166 million barrels, Enquest will pay the maximum $144 million. Enquest said the cash payments will be deferred and noted it will still be entitled to receive the capital tax allowances normally available for investment in such a development project.

Roxi Petroleum (LON:RXP) jumped 9% during afternoon trading after the company said that the NK-7 well, the first of six wells expected to be drilled across the groups assets this year, was spudded at 0000 local time on April 25. Appraisal well is planned to drill to 1400 metres and is targeted to encounter Jurassic sands and Conglomerate in the North Channel of NW Konys. Drilling operations coordinated by Roxi's operating partners LGI, and are expected to take 30 days. Well NK-6 achieving a production rate of approximately 155 barrels of oil per day from NW Konys field. We will keep our eyes firmly on the news wires towards the end of that 30 day timeframe.

Kea Petroleum (LON:KEA) slipped 2% to 9p on big volume after the company said it was informed, on 25 April 2012, that Thornaby Limited, a company wholly owned by the trustees of the I R Gowrie-Smith Family Settlement, of which I R Gowrie-Smith, the Chairman of Kea Petroleum, is a beneficiary, purchased 300,000 Ordinary Shares of 1p each in Kea at a price of 8.5p per share on 24 April 2012. Following this transaction Thornaby Limited's total beneficial interest in Kea is 69,300,000 Ordinary Shares, representing approximately 13.61% of its issued share capital.

Gold Oil (LON:GOO) jumped 30% during afternoon trading on huge volume of 22 million shares, which is almost 5 times the average daily volume. The last update from the company was back on the 15th of March that said it has now completed the processing and interpretation of the 3D marine seismic Erika North and South surveys on Block Z34 offshore Talara Basin, Peru. Receives Competent Person's Report from DeGolyer and MacNaughton for 12 prospects identified by Gold Oil on the block. -Mean prospective resources certified by DeGolyer and MacNaughton total a combined 2.02 billion barrels of oil with a mean potential net present value of $ 2.6 billion. Farm out process is progressing well with the data room open and available to prospective partners from early February. Considerable interest in the opportunity has been shown by a large number of oil companies and in order to accommodate the level of interest, the bid deadline has been extended to early May. As we approach the bid deadline, I guess the speculation will start to make its way around the market, hence the move today.

Aminex (LON:AEX) pushed 11% to 5.1p at the mid-price on a decent slab of volume. The shares have been very bullish over the last few sessions, and reading through the last update I found this "The company said it has not found gas reservoir potential at its Ntorya-1 exploration well in the Ruvuma Basin onshore in Tanzania after deepening it to 3,000 meters. The well will now be plugged back to the base of the 7-inch liner and completed for testing the gas pay interval. A test program will be carried out after the rig has been moved off location. On Feb. 27 Aminex reported that a gas discovery had been made in a 25 meter gross sand interval between 2,660 meters and 2,685 meters with a 3 meter net gas bearing pay zone in sandstones having 20% porosity at the top and a 16.5 meter thick lower sandstone interval with further possible gas pay. Aminex owns 75% of the project and Solo Oil PLC (LON:SOLO) 25%." Possibly the market is getting ready for an update on the testing of the gas pay zone?

Oak Holdings (LON:OAH) the relisted cash shell investing company announced today that its name has changed from Oak Holdings PLC to "Pires Investments PLC". The Company's TIDM will change to (LON:PIRI) from 27 April 2012 to reflect its new name. The company also announced that Gledhow Investments PLC is now interested in 200 million Ordinary shares, representing 11.39%. Gledhow didn't previously have a notifiable interest in Oak Holdings.

Saints & Sinners: Mining

Bushveld Minerals (LON:BMN) pushed 2.2% higher during early trading after the company said that it has commenced its drilling program on the Mokopane Tin Project, in South Africa. Commencement of its drilling and metallurgical testwork program starting on April 30. Bushveld has appointed Drillcorp Africa and has hired an additional geologist to complement the existing technical team. Assaying of the drill core will be carried out by Setpoint Laboratories, which has been appointed to carry out the analysis of the drilling assays. Initial assays results are expected in Q2 2012.

Herencia Resources (LON:HER) pushed 3% higher to 1.9p on big volume after the company said that the final results of its 2011 drilling program have returned some of the highest zinc, silver and lead grades ever achieved at its flagship Paguanta project. Managing Director Michael Bohm said some of the grades were outstanding, especially near-surface. "Grades of plus 20% zinc, plus 30% lead and plus 1,400 grams per [metric] ton silver are a positive way to round out the 2011 program", he said. All of the assays will be included in an upgraded mineral resource estimate, planned to be undertaken in May or June. The company also said that some of the mineralized vein structures it has found could be larger than originally anticipated as they remain open at length and depth. There is also further potential for more veins to be discovered as geophysical tests have returned strong anomalies, the company said.

Edenville Energy (LON:EDL) pushed 9% to 0.3p during afternoon trading after the company recently announced that it is making preparations for the upcoming field season at the Mkomolo Basin on the Rukwa Coalfield Project in South Western Tanzania, and new site vehicles have been purchased. Camp is being up-graded and additional geological staff recruited in preparation for the 2012 work program. Focus of the 2012 drill campaign will be on the Rukwa Coalfield Project and the nearby properties of Namwele and Muze. Drill contractor is expected to mobilize during May as is the geophysical contractor. Company is fully funded to undertake the planned 2012 work program.

Sunrise Resources (LON:SRES) slipped 13% to 1p after the company said that following geological modeling at its Derryginagh barite project in Ireland it is satisfied that its internal estimates of tonnage and grade potential are sufficient to justify a preliminary economic evaluation of the project. Consultants have been selected to tender for the scoping study, which is expected to be awarded in the near future. Field work has now also started on the Cue diamond project in preparation for drilling of the Cue 1 and Soapy Bore kimberlites; before drilling can start, an Aboriginal Heritage Survey needs to be carried out. At the Long Lake project, Canada, company has given notice to the project claim owner that it will not be electing to extend its option to purchase the project. I highlighted yesterday that the major support was at 1p, now the shares have slipped back to that level, it will be very interesting to see how these react to this level once again.

Ncondezi CoalCoal (LON:NCCL) pushed 5% to 57p during afternoon trading after the company said that it has embarked on an initiative to identify potential strategic partner to further enhance long term value for and to participate in the development of the company's flagship Ncondezi Coal Project licenses 804L & 805L in Mozambique. It is envisaged that potential participation could include one or all of the following: corporate and/or project equity; offtake; financing and construction capability. The company has appointed Standard Chartered Bank to act as financial advisor in relation to the partner search initiative. Given the company's expectation that its export thermal coal project will be of significant interest to a number of potential partners, together with the expected completion of the Definitive Feasibility Study on the project in September, timing to launch the strategic partner initiative is now opportune.

Metminco (LON:MNC) slipped 6% to 11.75p during afternoon trading after the company said that the Los Calatos resource increased by 170% to 9.4 million tonnes contained copper. With the completion of the Company's Phase 4a drilling program at the Los Calatos Project, Metminco Limited commissioned SRK Consulting, Chile S.A. ("SRK") to model, and calculate, an interim mineral resource estimate for its 100% owned copper - molybdenum project in southern Peru. The new resource model incorporates the drilling results from 113 drill holes totalling 90,403 metres, of which 31,550 metres1 were used in estimating the mineral resource associated with the Los Calatos mineralised envelope.

CIC Mining Resources (LON:CICR) jumped 10% to 1.85p after the company said it is pleased to provide a further update following the recent visit by shareholders and investors to certain of CIC's interests. Emulsion Fuel Limited (Emulsion) Emulsion, in which CIC holds a 33% interest, focuses on world leading heavy oil emulsion fuel technologies specifically in heavy industry, mining and shipping. The directors believe that emulsion fuel can afford significant direct cost savings on heavy fuel of up to 50% as well as indirect saving in heavy fuel supply logistics. Emulsion has recently entered into an agreement with a Chinese shipping group to field test Emulsion fuels in their large container shipping fleet within the next six months for which Emulsion will earn a percentage of the cost of fuel saved using its technology. CIC Precious Metals Limited (CICP) China, The Company is pleased to report that heap leaching of oxide gold will commence in May 2012 as planned at the ShangBa mine in Gansu, China in which CICP owns a 33% interest. CIC hold a 48% equity interest in CICP. Installation of crushing circuit, heap leach pad preparation, mining equipment and processing equipment have all been completed. The oxide mining to starting next month will see heap leaches of approximately 30,000 tonnes each completed late June 2012. There will then be normal leaching for 48 days before gold recovery will commence. ShangBa is targeting production of 30K to 50K oz. gold in its first year. Mr. Su, China's leading oxide gold miner and Stuart J. Bromley of CIC are the Technical Directors of the company. Congo, The CICP owns 48% of CIC Congo which now holds four gold mining leases next to Banro Corporation (now in production) having recently received its final mining permits to facilitate oxide gold mining on all four leases. Mr. Su and a technical team will arrive in May 2012 to establish base camp and other logistics to start the process of future oxide gold mining operations planned for 2013. Initial bulk testing for oxide gold mining has been completed.

Forte Energy (LON:FTE) slipped 2% to 2.4p after the company announced is pleased to announce the appointment of Mr. James Leahy as a Non-Executive Director with effect from 26 April 2012. Mr. Leahy has more than 26 year's experience in the mining sector as a senior mining analyst and as a specialist corporate broker with expertise in international institutional and hedge funds, foreign capital and private equity markets. As a founding partner of the natural resources team at Mirabaud Securities, one of the leading UK based stockbroking firms, offering specialised and quality stockbroking to corporate and institutional clients, Mr. Leahy has advised a number of natural resource focused funds in the UK, raised more than US$2 billion in equity for resource companies and participated in over 30 IPO's. Mr. Leahy is also a non-executive director of ASX/AIM listed Continental Coal Ltd and a non-executive director of TSX-V listed Bacanora Minerals Ltd The Company also advises that Lady Barbara Judge and Mr. Bosse Gustafsson have resigned from their positions as directors, effective 30 April 2012. They will continue to be involved with the Company as external consultants.

Volumes in Premier Gold Resources (LON:PGR) have slowly started to improve, but the shares slipped 7% to 0.625p at the mid-price. This is a puzzling move, as I saw the relisting, and the following snippet as bullish news "In line with the Company's new strategy Shareholders approved the acquisition of the entire issued share capital of Central Asia Resources Limited (the "Acquisition") which brings with it the Company's first major gold exploration project, the Cholokkaindy licence, situated on the highly prospective Tien Shan Gold Belt in Kyrgyzstan." The shares have trounced 0.6p a few times recently and bounced, so we will continue to watch this one closely for potential updates.

Berkeley Resources (LON:BKY) jumped 8% to 24.5p during afternoon trading after the company said it has appointed Ian Middlemas non-executive Chairman of the Company and Robert Behets non-executive Director effective April 27, and will undertake a placing of shares to them raising $1.5 million for the Company. Placing 5.0 million shares at $0.30 per share to raise $1.5 million; each share will have a free attaching option exercisable at $0.45 any time before June 30, 2016. It is proposed that Middlemas will acquire 4 million shares through Arredo Pty Ltd, a company associated with Ian Middlemas; and Behets will acquire 1 million shares.

From the trading floor

The FTSE 100 pushed 11 points to 5732 (+0.25%) on volume of just over 512 million shares. It does feel like the steam is starting to running out of a few names over the last few sessions. The FTSE AIM All-Share Index was 0.33% easier on just under 1.1 billion shares.

Commodities Corner

Gold - ↑Trading at $1650, up $7 (+0.41%)

Silver - ↑Trading at $30.73, up 4c (+0.01%)

Copper - ↑Trading at $8261, up $52 (+063%)

Zinc - ↑Trading at $2012, up $22 (+1.01%)

WTI Crude - ↑Trading at $104.21, up 15c (+0.14%)

Brent Crude - ↑Trading at $119.67, up 55c (+0.46%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com 

Mining News

Balamara Resources Limited (ASX:BMB) announced that the first hole drilled at its Bogdan Copper Project in Poland has returned visible evidence of copper mineralisation. The result is considered particularly significant because it suggests that the Zechstien Formation, which hosts the extensive Kupferschiefer mineralised system at the neighbouring complex of mines owned and operated by KGHM Polska Miedz may extend into Bogdan. The Company will immediately start work on the second hole which sits between hole number one and the existing KGHM operating mine.

Berkeley Resources (LON:BKY) has appointed Mr Ian Middlemas as non-executive Chairman of the Company, and Mr Robert Behets as a non-executive Director of the Company, effective Friday 27th April, 2012. Both were involved with Mantra Resources, which was eventually sold to ARMZ for US$1bn last June. MD Brendan James will bring forward his previously announced departure from the Board, and the position of Managing Director, to 27 April 2012. Both new directors have requested to acquire an interest in the Company and Berkeley will issue 5Mshares (4M to Mr Middlemas and 1M to Mr Behets) at $0.30/sh to raise $1,500,000 (before costs), with attached options exercisable at $0.45 any time before 30 June 2016.

Bushveld Minerals Limited (LON:BMN) announced the commencement of its drilling programme on the Mokopane Tin Project, located on the Northern Limb of the Bushveld Complex in South Africa. An estimated 20 RC holes of extension drilling and 58 RC holes of infill drilling will be undertaken on the Groenfontein target in order to bring more of currently defined indicated and inferred JORC compliant resources to the measured category. An estimated 47 diamond holes will also be drilled on the Zaaiplaats target. Metallurgical testwork will also be undertaken to determine mineralogy and processing parameters for the Mokopane Tin ore.

Forte Energy (LON:FTE) has appointed James Leahy as a Non-Executive Director with effect from 26 April 2012. Mr Leahy, was a founding partner of the natural resources team at Mirabaud Securities and is non-executive director of ASX/AIM listed Continental Coal Ltd and TSX-V listed Bacanora Minerals. On a more disappointing note Lady Barbara Judge, currently chairman of the UK Atomic Energy Authority and Mr Bosse Gustafsson, currently technical director have resigned as directors, effective 30 April 2012. They will continue to act as external consultants to Forte.

Herencia Resources Plc (LON:HER) announced the final results of its 2011 drilling programme at its Paguanta Project in Chile. Best intersections include 6.00m at 15.5% lead and 729g/t silver from 38m, 6.00m at 10.4% zinc, 2.9% lead and 150g/t silver from 110m and 2.00m at 12.0% zinc, 2.7% lead and 56g/t silver from 34m. The results are to be included in an upgrade of the Patricia Mineral Resource Estimate planned to be undertaken by Golder Associates in May/June 2012.

Kazakhmys (LON:KAZ) released its 1Q'12 production report and Interim Management Statement. Disappointingly processing of ore during the quarter was severely impacted by severe weather and transportation issues reducing copper cathode production to 65.1kt, down -11.43 on the previous quarter and -12.26% YoY. Guidance is maintained at 285-296kt, which we believe is still achievable as ore stockpiles were built up over the period and the restart of mining at Konyrat should boost 2H production. More positively construction at the US$1.8bn, 28mtpa Bozshakol copper project has now started a month ahead of schedule

Metminco (ASX:MNC) has released an interim resource update for its Los Calatos Cu-Mo project in southern Peru following the completion of the phase 4a drilling program. The Cu-Mo resource tonnage has increased by 150% from 0.926 to 2.32bt. The copper grade has improved from 0.37% to 0.40% increasing the total contained copper by 170% to 9.4mt. The Phase 4b infill drilling program of 70,000m has now commenced after which we expect a further resource update. The company has started an internal mining study, but plans to start a full pre-feasibility project in early 2013 post the resource update.

Namakwa Diamonds Limited (LON:NAD) announced its unaudited results for the six month period ended 29 February 2012. Production commenced in late November 2011 and the 500tph DMS plant was commissioned in late December 2011.Tonnage through-puts have been lower than budgeted due to operational challenges with the secondary crushing circuit during the period and a design failure to the scrubber after the period end. The 500tph DMS plant is currently operating at 300tph, with design capacity expected to be achieved in H2'2012. H1'2012 production was 26.56Kcts from 0.3Mt of ore at an average grade of 8.57cpht.The North West Province Operation's H1'2012 production was 11.07Kcts from 1.5Mt of ore at an average grade 0.73cpht. 11,178 carats were sold at an average price of US$632/ct, and an average cost of US$589/ct. Revenue for the half was US$16.95m (H1'11: US$42.11m) down 60% and EBITDA was a loss of US$11.48m (H1'11: loss of US$3.13m).

Ncondezi Coal (LON:NCCL) has announced it has appointed Standard Chartered Bank to act as financial advisor to identify a potential strategic partner for the development of the company's flagship Ncondezi Coal Project in Mozambique. Although NCCL has no capital commitment for infrastructure at this stage and will most likely negotiate a take or pay agreement with its partners, the DFS and PII power study expected in 3Q'12, we believe Ncondezi will need to find to find a partner to develop the project beyond the end of the year, although we also believe the company will already have been talking to interested parties, most likely Indian groups for the potential offtake.

Paragon Diamonds Limited (LON:PRG) announced that it has acquired the remaining 1.5% interest in International Diamond Consultants ("IDC") from Obtala Resources Limited, bringing the Group's interest to 100%. IDC holds interests in the Group's Lemphane and Motete mining exploration projects in Lesotho, the KapLamp lamproite project in Zambia and the Kabale licence, a diamond kimberlite exploration project both in Zambia. The 600,000 shares have been acquired at a price of $0.88 per share. The consideration of GBP330,000 has been satisfied by way of issuing 970,588 new ordinary shares in the Company to Obtala Resources Limited.

Sunrise Resources plc (LON:SRES) announced that following the receipt of drilling results announced in February, the Company has completed a review of the drill data and has constructed a 3D geological model of the Derryginagh barite vein system. As a result of the geological modelling, the Company is satisfied that its internal estimates of tonnage and grade potential are sufficient to justify a preliminary economic evaluation of the project.

Oil & Gas News

Roxi Petroleum (LON:RXP) That the NK-7 appraisal well is underway, is not newsworthy in and of itself. What it is, however, is representative of the refocusing of the Company on the development of its asset base; this is the first of 6 wells. Results will be expected in the next 30 days, and given that it is an appraisal well, the prognosis should be positive.

Afren (LON:AFR) - Nunya-1x exploration well results disappointing - but not the end of road in Ghana: Nunya-1x is the first exploration well drilled on the unexplored, highly prospective, deep-water Keta block (35% WI) in Ghana. The block has both Tertiary and Cretaceous prospectivity, and supposedly contains multiple prospects and leads. Its play is similar to the Jubilee and Odum discoveries. The block is already covered by 1,600km2 of high quality reprocessed 3D. We think announcement for the second exploration will happen sooner rather than later considering its gross prospective resources are estimated at 1,412 mmbl by NSAI. Financial impact of Nunya-1x exploration well on Afren will be nil as its cost is carried over by ENI (operator) for one exploration well. In this news:

• Nunya-1x exploration well encountered thick and high quality water bearing reservoirs.

• Objective of the Nunya-1x exploration well was to explore a large four-way dip closed Upper Cretaceous prospect in the Keta block, located offshore Ghana.

• The well intersected 153 meters of very good quality sandstone reservoirs, however they were interpreted as water bearing.

• The well was drilled with the Marianas semi-submersible drilling rig to a total depth of 4,550 meters in a water depth of 1,687 meters.

• Afren has a 35% carried interest in the Keta Block and is partnered by Eni SA (ENI.MI)-35% and operator; Mitsui-20%; and GNPC-10%.

Borders & Southern Petroleum (LON:BOR) Today's fund raising further strengthens the Company's balance sheet. It had cash balance of $197mm as 30th June 2011. These funds will be utilized for funding the new exploration well, acquisition of 3D seismic data. New shares placement at 84p is in line with the current market price. In this news:

• It has placed 55.3 million new ordinary shares £0.84 per share with institutional shareholders to raise £46.4 million before expenses.

• These funds will be used to acquire additional 3D seismic within the Company's existing acreage, to enable further analysis of the results of the Darwin East well and for general working capital purposes.

Red Emperor (LON:RMP) On appointing Fox-Davies Capital as joint broker, the Company followed this with a placing. Following the capital raising, we estimate that the Company is now sufficiently well-funded to meet its near to medium term obligations, which are comprised of wells in Puntland and Georgia. In the news:

• Appointment of Fox-Davies Capital Limited as joint broker to the Company with immediate effect.

• Placing through Fox-Davies Capital Limited and Old Park Lane Capital, of 19,500,000 new ordinary shares at 32 pence per share (the "Placing Shares") to raise GBP6.24 million before expenses (the "Placing")

• Funds raised under the Placing will be used for exploration activities at the Company's high impact exploration projects in Puntland and in the Republic of Georgia

• Trading in the placing shares should commence on or about 1 May 2012

• Following Admission, the Company will have 258,484,221 ordinary shares in issue.

EnQuest (LON:ENQ) The acquisition of a third tranche in the Kraken oil discovery highlights management's enthusiasm about the quality and potential of the asset. In the news:

• Acquisition of a further 15% interest in blocks 9/2b and 9/2c including the Kraken oil discovery

• EnQuest now have 60%

• EnQuest proposes to pay First Oil between $90 million and $144 million by way of a development carry in relation to First Oil's remaining 15% interest in Kraken

• The amount payable is dependent on a future determination of the gross 2P reserves in Kraken

• Less than or equal to 100 MMboe, EnQuest will only pay $90 million

• Less than 166 MMboe, but more than 100 MMboe, then the amount of the development carry will be increased by up to a further $54 million

• EnQuest will pay the maximum of $144 million if the future determination of gross 2P reserves is greater than 166 MMboe

Oilfield Services News

Technip (EPA:TEC) Technip's Q1 results revealed revenues up 23% to EUR 1.765Bn with EBITDA at EUR 204.7M and EBITDA margins at 11.6%. Net income was up 7.6% to EUR 112.2M. These results are much as expected. The outlook continues to remain favourable with the backlog now standing at EUR 12.34Bn and the group confirming its expectations for 2012. Group revenue is expected between EUR7.65Bn and EUR8.00Bn with Subsea revenue between EUR3.35 and EUR3.50 billion, with operating margin around 15%; additionally, onshore/offshore revenue of between EUR4.3 and EUR4.5 billion, with operating margin between 6% and 7%.

Saints & Sinners: Oil & Gas

Afren Plc. (LON:AFR) slipped 4.5% to 136p during afternoon trading after the company said the Nunya-1x exploration well in the Keta block offshore Ghana has encountered thick and high quality water bearing reservoirs. Objective of the Nunya-1x exploration well was to explore a large four-way dip closed Upper Cretaceous prospect in the Keta block, located offshore Ghana. Well intersected 153 meters of very good quality sandstone reservoirs, however they were interpreted as water bearing. Well was drilled with the Marianas semi-submersible drilling rig to a total depth of 4,550 meters in a water depth of 1,687 meters. Afren has a 35% carried interest in the Keta Block and is partnered by Eni SA (ENI.MI)-35% and operator; Mitsui-20%; and GNPC-10%. Afren continues to make excellent progress with wider exploration program, which has already yielded two significant discoveries year to date. Ebok North Fault Block exploration well has been spudded in Nigeria and is drilling ahead towards target. First line support looks to be around the 135p area, so it will be interesting to see how the long term holders react to that level.

Providence Resources (LON:PVR) pushed 3% to 550p during early trading today. The oil and gas exploration and production company, recently said that initial technical evaluation of Licensing Option 11/12 located in the Slyne Basin, Ireland, has revealed the presence of the "Kylemore" and "Shannon" prospects which are similar in age to the nearby Corrib gas field. Kylemore prospect is interpreted as a mid-basinal inverted four way dip-closed anticline based on a combination of 2D and 3D seismic data. Most recent mapping of the Kylemore prospect indicates that it is structurally directly analogous to the Corrib gas field. Volumetric analysis based on available Kylemore prospect maps indicates a potential gas in place of up to 228 BSCF. Shannon structure, which is fully covered by 3D seismic data, warrants a complete re-evaluation in the context of any remaining resource potential. Providence (66.66%) operates LO 11/12 on behalf of its partner First Oil Expro Limited (33.33%). The shares bounced nicely off of the support at 530p during early trading, and with volumes steadily increasing once again, they could be on course for a retest of the 52 week high at 581p.

Sefton Resources (LON:SER) are sitting right on long term major support at 2.2p. The last few times the company have hit this major support we have seen a small bounce. The next line of support behind this would be the 2p area. The last update on the 12 of March said that the findings of an Independent Competent Persons Report produced by Dr. Nafi Onat which assesses and values the company's potential oil and gas resources in Kansas and said the report gives an updated estimated valuation of the group's interests in Kansas. Report estimates the PV10 value of Sefton's potential oil and gas resources in Kansas and anticipated pipeline revenues at this time of $140.0 million; This is a 40% increase on the valuation reported in May 2011. The report includes Mississippian related prospective oil resources of 1.97 million barrels; shallow CBM related possible, contingent and prospective gas resources of 55.78BCF; and assumes an anticipated pipeline revenue with flow rates of 10MMCF/d of gas over a 20 year period. The evaluation excludes the prolific Mississippian related McClouth and Burgess sand producing areas, until a more comprehensive geologic/engineering study has been completed.

Aminex Plc. (LON:AEX) jumped 12% to 4.55p on almost 3 times the average daily volume. The last update back on the 11th of April said the company had not found gas reservoir potential at its Ntorya-1 exploration well in the Ruvuma Basin onshore in Tanzania after deepening it to 3,000 meters. The well will now be plugged back to the base of the 7-inch liner and completed for testing the gas pay interval. A test program will be carried out after the rig has been moved off location. On Feb. 27 Aminex reported that a gas discovery had been made in a 25 meter gross sand interval between 2,660 meters and 2,685 meters with a 3 meter net gas bearing pay zone in sandstones having 20% porosity at the top and a 16.5 meter thick lower sandstone interval with further possible gas pay. Aminex owns 75% of the project and Solo Oil PLC (SOLO.LN) 25%. Aminex sees significant further exploration potential for the Ruvuma block, in particular the offshore portion of the PSA which is largely unexplored. Possibly the market is getting ready for another update from the company on testing of the gas pay interval.

Zoltav Resources (LON:ZOL) jumped 8% to 3.35p at the mid-price during afternoon trading today. Holders here are sitting waiting for an update from the company regarding the purchase of assets in the Former Soviet Union (FSU). The last time the company gave any sort of update on assets was back on the 18th of January when they said they had sold its holdings in the following companies: Rosneft - US$ 271,994.76 - Gazprom ADRs US$ 259,997.63 - Lukoil OAO ADRs US$ 165,892.39. The proceeds of these investment sales will be used to fund future investments and for general working capital purposes. Following these realisations the Company holds investments in three natural resources companies. The Company continues to actively manage its portfolio in accordance with its investing policy. Possible the market is getting ready for another update, or possibly this was nothing more than a bounce off of strong support at 3p. Big brother is watching!

HaiKe Chemical (LON:HAIK) pushed another 10% to 40p at the mid-price today. Possibly the market is running the stock into the final results that are due in early May. An interesting point to remember here is that Zhang Zaizhong, the chief executive officer and director of the company, purchased 15,000 shares in the company at a price of 38 pence per share on Jan 20. Only a small purchase in the grand scheme of things, but it is always interesting to see the directors buying shares.

In yesterday's note, I highlighted the fact that Serica Energy (LON:SQZ) were back at the major support at 29p, and today holders decided to continue to back the company at that level and pushed them to trade as high as 32p during early trading. We will continue to watch these closely, as they are back to the level they were trading at prior to the BP Farm-In announcement.

Volumes in Leni Gas & Oil (LON:LGO) jumped considerably today, with well over 11 million shares changing hands before the end of lunch. The last update on the 26th of March said "The A2ST01 sidetrack was designed to test the Cranberry Creek prospect at the Tex-X2 reservoir level at a depth of approximately 13,000 feet subsea. The Tex-X2 reservoir was encountered slightly high to prognosis and was found to be water wet. Logging while drilling results show a 5 foot thick hydrocarbon pay zone at a different level within the well, however, this is not considered by the operator to be sufficient to justify installation of a production completion. This sidetrack from the A2 well is being plugged. With the new data obtained, which will require study and integration with the existing well and seismic data, and the need to release the rig due to its sale by Diamond Offshore to Hercules the operator Marlin Energy LLC ("Marlin") was not able to drill and complete the second well and has therefore released the rig back to the owners. When a suitable rig is located the operator will commence drilling of the planned 2(nd) well." Possibly the market is expecting an update on the location of a suitable rig? We will be watching the newswires for any updates.

A lot of people have been commenting on cash shells recently, as a number of them have finally started to roll assets into them. The two that have caught the eye recently are Creon Resources (LON:CRO) and Oak Holdings (LON:OAH). Creon Resources are sitting at 2.95p at the mid-price as holders await news on any potential assets purchases or reverse takeovers. Oak Holdings are sat at 0.2p at the mid-prices and have only recently relisted after the company raised £1 million and has disposed of all of its assets. The company also raised an additional £700,000 by way of a placing due to further demand from professional and institutional investors. The interesting similarity between Creon and Oak Holdings is the Non-Executive director Aamir Quraishi who's CV looks pretty impressive, and is a non-exec at both companies. Peter Redmond is also a Non-Executive director at Oak Holdings, and this chap also has his fingers in a number of pies, including Leed Resources (LON:LDP) and IGAS (LON:IGAS). Both of these chaps look like interesting characters, so holders will sit patiently waiting to see how both of these cash shells play out.

Saints & Sinners: Mining

International Ferro Metals (LON:IFL) jumped 10% to 16.5p during early trading today after the company said that it achieved alloy sales of 52,930 tons in the quarter ended March 31, down 9% from the previous quarter but up 9% on prior year corresponding period. Moved back into overall profitability on a monthly basis for March, operations cash generative. Eskom-related furnace shutdowns reduced ferrochrome production to 48,762 tons for the quarter, down 10% on previous quarter and down 5% on prior year corresponding period. Sky Chrome mining operations produced 122,000 tons run-of-mine ore for the quarter, flat on previous quarter. Co-generation plant produced 7.6GWh, or gigawatts, of electricity for the quarter, 3.8% of total requirement ramping up to 10% in March. UG2 Chrome Recovery Plant delivered 10,000 tons of concentrate in March.

With the recent goings on surrounding Zambian mining licences Berkeley Mineral Resources (LON:BMR) has been hit from just over 5p to the current level of 4p in just over a week. Historically the 4p level has been a very strong support line, so we will be watching closely to see how the long term holders react to the stock being back down at this important level once again.

Ortac Resources (LON:OTC) has started to rebound after its recent slip from 0.94p to 0.69p, and volumes have slowly started to increase once again. The last update from the company was back on the 21st of February that said "the company is pleased to report further encouraging drill results from its turec gold-silver project located in central Slovakia, with consistent high grade intercepts and encouraging widths. All holes reached targeted depth with good overall core recovery. Borehole STOR-3.11 demonstrates that there are significant high grade structures present that haven't been extracted during previous underground mining activities; considerable potential to follow these high grade structures to the south and deeper into previously unexplored areas. Turec deposit suitable for modern open pit mining with low strip ratios. Preparation of an updated geological model incorporating the 2011 drill results and the findings of the Scoping Study will start; anticipated that the updated model will be completed during Q2 2012." Possibly the market is getting ready for another update on the last line of that statement.

Toledo Mining (LON:TMC) jumped 7% to 20.75p on just over 3 times the average daily volume during early trading today. The market seems to be trying to bottom fish on this one as the share prices has been in free fall since the end of February, falling from a high of 30p to the recent low of 18.5p.

West African Minerals (LON:WAFM) pushed almost 11% higher to 28p during afternoon trading after the company reported Positive results from Aeromagnetic Survey, highlighting 27,000 line km of aeromagnetic surveys targeting potentially high tonnage, 60-65% Fe content, hematite-rich mineralisation completed on WAFM's six exploration properties in Cameroon. 30 discrete demagnetised zones covering over 100km(2) in total area have been initially identified as potential DSO targets. Seven of the anomalies on the south-eastern permits have geophysical signatures similar to other major DSO deposits in the region. Board approval given to Phase Two of the exploration programme which will comprise of approximately 400 fifty metre holes (20,000 metres in total) to target DSO material overlying magnetite banded iron formation (BIF) bedrock. Government assurances given that the Company will be given equal access to proposed new port and rail infrastructure being built in the country.

It was no surprise to see a few profit takers show up to the recent rally on Athol Gold and Value (LON:AHG) today, with the shares lipping 10% to 0.2p during early trading. Holders here are waiting on a couple of snippets of news from the company, including an updates Net Asset Value (NAV) for the company. The last NAV update was back on the 1st of February where the company highlighted that as of the 25th of January the NAV for the company was 0.33p.

Another stock that has slipped right back to the long term support is Sunrise Resources (LON:SRES). The shares have slipped from a high of 2.55p back towards the end of January to the current level of 1.1p. Major support for the company has historically been around the 1p area, so it will be interesting to see how the long term holders react to this level once again.

Nyota Minerals (LON:NYO) slipped another 8% to 5.45p during afternoon trading today, and are now sitting right back at levels not seen since the end of last year. The 5p level has historically been a decent enough support line, so we will continue to watch these closely as the shares slip closer to that support.

From the trading floor

The FTSE 100 somehow managed to rally by 13 points to 5722 (+0.22%) by the time the US market had opened, even though the GDP data out in the UK today showed we were officially in a double dip recession, not seen since the 1970s. Volumes were a little on the light side with only 450 million shares changing hands before the US opening bell. The FTSE AIM All-Share Index was 0.35% higher on volume of 682 million shares.

Commodities Corner

Gold - ↑Trading at $1642, up $2 (+0.09%)

Silver - ↑Trading at $30.85, up 3c (+0.05%)

Copper - ↑Trading at $8210, up $62 (+076%)

Zinc - ↑Trading at $1991, up $1 (+0.11%)

WTI Crude - ↑Trading at $103.81, up 28c (+0.27%)

Brent Crude - ↑Trading at $118.46, up 29c (+0.25%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com 

Mining News

Central Rand Gold Limited (LON:CRND) announced its Interim Management Statement for the three months ended 31 March 2012. 19 216 tonnes of underground ore at a mined grade of 4.9 g/t Au was mined in the first quarter, which was below the Company's production target of 12 000 tonnes per month. Surface mining totalled 36 211 tonnes at a mined grade of 3.67 g/t Au. Gold production in the first quarter was 70% higher than last year at 4,777 oz at recoveries above 95%. The Company is pleased that it continues to remain cash flow positive, with cash and cash equivalents at US$6.3 million.

International Ferro Metals (LON:IFL) released a positive IMS & Production Report for the 3 months to the end of March as the Company moved back into overall profitability on a monthly basis for March and operations became cash generative, partly due to the Eskom electricity buy-back agreement. Production numbers appear weak with alloy sales of 52,930t down 9% QoQ, the Sky Chrome mining operations were flat QoQ producing 122,000t ROM and Eskom-related furnace shutdowns reduced ferrochrome production to 48,762t down 10% QoQ. The Company was able to achieve 37.5% of targeted production cost savings in the quarter, up from 27.5% for H1, with a 5.3% reduction of FeCr costs to ZAR5.92/lb (US76¢/lb) meaning that net borrowings decreased from ZAR458m to ZAR421m during the quarter. The Company was also upbeat on the outlook with benchmark European FeCr prices increasing by 20¢ to US$1.35/lb for the quarter ending June 2012 due to reduced SA production reducing spot market availability, although Chinese market weakened.

Polymetal International (LON:POLY) has released a good set of FY'11 Financial Results. Revenue was up 43% to US$1,326M due to a 13% increase in gold equivalent ounces sold and a 26% increase in the average realised gold price. Adjusted EBITDA of US$624M, up 47% and EBITDA margin was up 1.1% to 47% despite ramp-up of new mines, operational challenges in the beginning of the year and a 26% rise in cash costs to US$701/AuEq oz due to domestic Russian inflation of 6.1% and the Rouble strengthening against the US dollar by 3.4%. As a result, an inaugural dividend of US$0.20/sh has been proposed.Polymetal is now on track to deliver 1Moz gold equivalent production in the current year.

Regency Mines (LON:RGM) has released a maiden JORC compliant Mineral Resource Estimate for the Mambare Nickel Laterite Project in Papua New Guinea. The maiden resource is 95.1Mt @ 0.96% nickel and 0.08% cobalt for 912,595t of contained nickel @ a 0.60% nickel cut-off grade. Exploration at the Mambare Nickel Laterite Project is being undertaken by Oro Nickel Ltd, a 50:50 Joint Venture of Regency Mines plc and Direct Nickel Pty Ltd. Following the delivery of the MRE at Mambare, attention will now be given to future resource definition work, metallurgical testing, and scoping studies with the Company hoping that the Direct Nickel Process for extracting nickel from laterites will produce significant cost savings.

Rio Tinto (LON:RIO) has completed the formation of the Simandou JVwith Chalco, Chinalco's listed subsidiary following the completion of all Chinese regulatory approvals. Chalco has made an earn-in payment of US$1.35billion, in line with an agreement reached with Rio Tinto in March 2010. Rio Tinto and the Chalco consortium now hold a 53% and 47% interest respectively in the JV which translates into a 50.35% and 44.65% interest in the Simandou project. The remaining 5% is held by the International Finance Corporation and the Government of Guinea retains its options for participation in the project, which Rio expects it to take up in the near future. Given uncertainty over the investment climate in Guinea, this is very positive for the country and other companies operating there.

Talvivaara Mining Company (LON:TALV) released its interim report for January-March 2012. The results were disappointing with nickel production of 3,374t against a lower end guidance of 25000 t for the year (6,250 t pro rata for the quarter). Production was adversely impacted by process modifications at the metals recovery plant. Net sales were EUR 39.0M leading to an operating loss of EUR 11.4M for the quarter. The good news is that the Company has a strong cash position of EUR 85.9M after raising EUR 83M from an equity placing and EUR 110M from a bond issue.

West African Minerals Corporation (LON:WAFM) has announced the results of a 27,000 line km aeromagnetic survey and positive discussions with the Cameroon government over infrastructure. The aeromagnetic survey on WAFM's six exploration properties in Cameroon has identified 30 discrete demagnetised zones covering over 100km2 as potential DSO iron ore targets. Seven of the anomalies on the south-eastern permits have geophysical signatures similar to other major DSO deposits in the region. As a result the company will embark on Phase Two of the exploration programme with an initial 20,000m shallow RAB drilling programme targeting potential DSO material. Separately the Company has received correspondence from Mr Emmanuel Bonde, the Minister of the Ministry of Industry, Mines and Technological Development and the Secretary General of the Ministry of Industry, Mines and Technological Development confirming the Republic of Cameroon's commitment to providing the necessary infrastructure to support all mining in the country, and ensuring the Company will have access to the infrastructure on equal terms, including the proposed harbour and railway infrastructure, once completed.

Oil & Gas News

Premier Oil (LON:PMO) The FDP approval for the Solan field (60% WI) confirms Premier's continuous success in the North Sea. The Solan field, with gross 2P reserves of 40mmbbl,will contribute net 14.4mm boed by the end of 4Q-2014. With 61mm boed production forecast for 2012, we believe Premier is on track to meet its medium term production target of 100mm boed. Today's announcement will have a positive impact on the valuation and bodes well for the share price. In this news:

• Received approval of its Field Development Plan (FDP) for the Solan field (Premier 60%, Chrysaor 40%) from the Department of Energy and Climate Change.

• Field development would involve the drilling of four subseawells (two producers and two water injectors) tied back to a processing deck supported by a jacket.

• Premier has entered into an agreement with Awilco Drilling for the provision of the WilPhoenix for Solan drilling commencing in the second quarter of 2013.

Oilfield Services News

Lamprell (LON:LAM) Lamprellannounced the exercise by National Drilling Company, Abu Dhabi of the options for Lamprell to build a further two jackup rigs in addition to the four rigs currently under construction by Lamprell for NDC. The rigs are valued at US$166.65M each. Deliveries are scheduled to be in Q4 2014 and Q1 2015 respectively. The work will be performed at Lamprell's Hamriyah facility

Baker Hughes (NYSE:BHI) Q1 results were somewhat reassuring after the recent profits warning, with Q1 net income of$379 million, or $0.86 per sharecomparedwith $0.87 per share for the first quarter 2011, and to $1.22 per diluted share for the fourth quarter 2011.

The international business performed very well, relative to the typical seasonal declines.In particular, the performance of the Europe/Africa/Russia Caspian segment was excellent, driven by strong results across Africa. Margins in North America were lower than the fourth quarter due to challenges in the Pressure Pumping product line, including the rapid transition from natural gas to oil-directed drilling rig activity and the increasing supply of Pressure Pumping capacity across the market.

The outlook comments remained cautionary with the Company stating that "it is clear that the overall pressure pumping market is experiencing pricing pressure that is likely to extend throughout 2012."

Saints & Sinners: Oil & Gas

Cove Energy (LON:COV) pushed 4.5% to 227p on huge volume of 85 million shares before lunch, after the company said that they have reached agreement on the terms of a recommended cash offer to be made by Shell Bidco for the entire issued and to be issued share capital of Cove. Cove Shareholders who accept the offer will be entitled to receive 220 pence in cash for each Cove share. The offer values the entire issued and to be issued share capital of Cove at GBP1.12 billion million. Cove directors intend to recommend unanimously that Cove shareholders accept the offer. The offer is conditional upon, amongst other things: *The receipt of written consent of the Republic of Mozambique's Minister of Mineral Resources or through one or more delegated representatives required as a result of the indirect change of control of Cove Mozambique and the Rovuma Area 1 Interest, such consent to be in a form satisfactory to Shell Bidco and such consent, once given, not having been revoked or withdrawn or otherwise having lapsed; and *Cove Mozambique being the owner of the entire legal and beneficial interest in the Rovuma Area 1 Interest and, following the release of this announcement, no circumstances having arisen which might reasonably be expected to result in Cove Mozambique no longer being the owner of the entire legal and beneficial interest in the Rovuma Area 1 Interest. The bit of news that really pushed them over the bid price was the announcement from PTT Exploration that said, In connection with PTTEP's announcement dated 24 February 2012 of a proposed cash offer for Cove, PTTEP notes today's announcement by Shell Exploration and Production (XL) B.V. ("Shell") of its firm intention to make an offer for Cove at a price of 220 pence in cash for each Cove share, on and subject to the terms and conditions set out in that announcement. PTTEP is currently considering its options and will make a further announcement as and when appropriate.

Gulfsands Petroleum (LON:GPX) slipped 1% to 125p, back towards its major support at 122p/125p. Volumes have not really been catching the eye of late, and news reports that Syrian forces have killed dozens of civilians in the past two days will not do anything to help restore the already battered confidence in the stock. This news raises fresh concerns about the potential of success for the United Nations (UN) peace plan.

A few profit takers showed up to the Matra Petroleum (LON:MTA) party today, knocking the shares for 5% to 2.75p during early afternoon trading, after the shares had pushed on yet another 12% to a traded high of 3.25p. The shares had been on a fantastic run over the last few sessions, so it was no surprise to see a little profit coming off of the table up around the 3p area, but as I type the shares are starting to edge up once again.

Xtract Energy (LON:XTR) pushed on 8% to 0.67p during afternoon trading as the shares slowly started to rebound from the recent fall. The shares have dropped from just over 2p to a recent low of 0.6p, after the company said that they found no hydrocarbons at its Luna well, and that they would be looking for new opportunities in the Netherlands. Possibly one of the reasons for the additional fall was the market wondering if the company has enough cash to expand its opportunities in the country, or if it would need to raise additional funds.

Nighthawk Energy (LON:HAWK) jumped nearly 9% to 3.3p at the mid-price, albeit on very thin volume. The shares have slipped from just over 5p back down to 3.1p over the last few months, and the most recent update that read bullish enough could not get them moving positive again either. The update on the 26th of March said that its 2012 work-over program at its Jolly Ranch project in Colorado is on schedule and that its preparation and data gathering is complete on seven wells. Second work-over rig will be on location shortly. The company now anticipates that additional down-hole work will be required above original estimates, and consequently the company has budgeted for an additional net spend of $300,000 to $600,000, which is fully funded. Nighthawk is undertaking substantial overhaul of topside facilities including cleaning of tanks, improvement of well-pads; better environmental protection; and improved infrastructure. Data-gathering process has proved very successful with check-shot data obtained from three wells and additional logging data from the out-lying Williams 10-27 well. Over the past week recompletion work to bring three additional wells into production has been underway and an update on production will be released in April 2012. Now the last line of that update is the one I think could be the main driver behind the bounce. So possibly the market is getting ready for a production update.

Bowleven (LON:BLVN) jumped 5% to 85p during afternoon trading after the company said that its wholly-owned Cameroon operating subsidiary, Euroil Limited ("Euroil"), has signed a memorandum of understanding (MOU) relating to the supply of gas from the Etinde Permit. The following release was made by SNH in Cameroon today. Signing of a Memorandum of Understanding between SNH, German company Ferrostaal GmbH and EurOil Ltd with a view to supplying natural gas to the chemical fertilizer plant. The Executive General Manager of the National Hydrocarbons Corporation (SNH), Mr Adolphe MOUDIKI, the Senior Vice-President of German company FERROSTAAL GmbH (FERROSTAAL), Mister Kaspar EVERTZ, and the Chairman of EurOil Limited (EUROIL), Chief TABETANDO, inform the public of the signing on 24 April 2012 at the head office of SNH in Yaounde, of a Memorandum of Understanding for the supply of natural gas to the chemical fertilizer production plant due to be constructed in Limbe, Cameroon. Under the Memorandum of Understanding, the three companies intend to cooperate towards the evaluation, development and putting on production of the gas fields in the EurOil operated Etinde permit, within a time limit compatible with the construction of the plant, in order to ensure that it is supplied with natural gas as from year-end 2015. The estimated gas requirements of the fertilizer plant stand at 70 million cubic feet per day, for a minimum period of ten years which the parties wish to extend to 20 years, with the contribution of other potential or identified gas fields on the EurOil operated ETINDE permit.

HaiKe Chemical (LON:HAIK) jumped 21% to 35.5p on almost 4 times the average daily volume. The last RNS from the company on the 23rd of April said "HaiKe Chemical Group Limited the AIM quoted (AIM: HAIK) petrochemical, specialty chemical and biochemical business based in China will announce final results for the year ended 31 December 2011 in early May 2012." So possibly the market is getting ready for the final results which should be over the next few weeks.

Serica Energy (LON:SQZ) slipped 1.5% to 29p during early trading, albeit on thin volume. The shares have slipped from the high of just over 45p back toward the end of March, to the current level of 29p that has historically acted as a major support line. It will be very interesting to see how the holders react to the shares now they are back to the major support. The shares jumped initially after the company said that BP PLC (BP.LN) has agreed to earn a minority stake in its offshore Namibia exploration license by covering past costs and paying for an extensive three-dimensional seismic survey. Serica currently holds an 85% stake in exploration license 0047 and has agreed to farm out 30% to BP. The National Petroleum Corporation of Namibia Ltd. holds a 10% stake and Indigenous Energy Ltd. holds the remaining 5%. The deep water geological basins offshore Namibia, including the Luderitz Basin, are at the early frontier stage of exploration and having a major like BP on board, should reduce the financial and technical risk to the minnow.

We (Fox Davies) put out a BUY note on Melrose Resources (LON:MRS) today, with a price target of 175p. The note highlighted that Melrose Resources has demonstrated its ability to execute a cost competitive exploration, appraisal and development strategy. With an already strong balance sheet and improving cash flow, alongside a balanced exploration portfolio, all the elements exist for a robust growth model. Against this we temper the additional risks associated with operating in Egypt. We initiate coverage on Melrose Resources with a BUY recommendation and a target price of 175p.

• Egyptian risk overdone: While there are some short term risks with respect to payment terms, we do not believe the risks associated with nationalisation to be too excessive. Nevertheless, although the termination of the Egyptian / Israeli gas deal has been presented as a commercial issue, there is the fear that this is just the mask covering more clandestine motivations, all of which will only serve to stoke regional tensions.

• Balanced portfolio: Melrose has a well-balanced portfolio of assets with established producing assets in Egypt and Bulgaria, frontier exploration potential in France, Egypt and Turkey, and further exploration in Romania. Its CapEx spend has averaged $114mm pa over the last 3 years, with a ~50:50 split between development and exploration.

• Attractive project economics: Melrose pursued an aggressive development strategy in Egypt and Bulgaria, bringing its discoveries on line quickly by leveraging off of its existing infrastructure. This in turn has kept F&D costs to a minimum and resulted in rapid paybacks; the operating cost for the producing fields in Egypt and Bulgaria averages at just $2.1/boe. The expertise it has developed can be applied across its portfolio. The unit development cost ranges between $2-9/boe for the Egypt fields and $7-9/boe for the Bulgaria fields. The 2P reserves of 35.6mm boe ensure cash flow to the Company for the minimum period of six years.

• Significant cash built up: Melrose has established a strong cash flow platform in Egypt and Bulgaria. We estimate free cash flow generation of $394mm over the next three years which places the Company in a strong position of being able to fully fund its exploration and development programmes and retain sufficient financial flexibility to pursue acquisitions.

• Initiate with a BUY recommendation and a target price of 175p: With opportunities in the near medium and longer term, the stock is keenly priced. However, this is offset by its exposure to the turbulent Egyptian region. (A full copy of the note can be found on our web site)

Nostra Terra Oil & Gas (LON:NTOG) slipped 4.4% to 0.435p at the mid-price today, albeit on thin volume. The shares are now back to what looks like an interesting support line along the uptrend. In the last update on the 16th of April the company said that the drilling plan in the Bale Creek prospect has been accelerated. The Company has a 30% working interest in the Bale Creek prospect, located in Oklahoma.A decision has been made to accelerate the drilling of the horizontal wells in Phase I. The three horizontal well locations in Phase I have already been spaced and pooled. While the first horizontal well is being drilled, the pad for the next horizontal well is being constructed and the rig contract has been extended, such that the rig will remain on the lease for the second horizontal well, where drilling will commence immediately following completion of the prior well. Following Phase I, there are four additional potential horizontal well locations in Phase II. Matt Lofgran, Chief Executive Officer of Nostra Terra, commented: "Things are really picking up here. The back to back well drilling programme not only saves money but, more importantly, should allow us to bring on production much more quickly." Nostra Terra said they will make further announcements as the operations progress.

 Saints & Sinners: Mining

Vatukoula Gold Mines (LON:VGM) jumped 6% to 55p after the company said it has raised GBP5.4 million through a subscription agreement with Zhongrun International Mining Co. Ltd. Zhongrun International Mining Co. Ltd. purchased 9 million new ordinary shares in the Company at a price of GBP0.60 per share. In addition, under the Subscription Agreement, the Company has agreed to grant to Zhongrun an option to acquire an additional 9,000,000 ordinary shares in the Company. The Option will be exercisable at a subscription price of GBP0.77 per share and is exercisable any time on and before July 23, 2012. The funds raised will be added to working capital and also used towards a number of purposes, including drilling to convert current Inferred resources to Measured and Indicated Resource categories, as well as longer term capital and development projects. Underground mining operations at the Vatukoula mine were disrupted following extensive rainfall in the Northern area of Fiji which caused some flooding on the lower levels of the mine and an accident in the Smith shaft. It is expected that the disruption will reduce anticipated gold production for the current quarter by about 2,000 to 3000 ounces.

Red Rock Resources (LON:RRR) slipped 5% to 2.21p at the mid-price during early trading, albeit on thin volume. The shares have continued to slide despite the company announcing on the 19th of April that it appointed Ariel Partners LLP for an initial period of four months to assist the company in restructuring its directly and indirectly held interests in the Migori Project. The Migori Project has a NI 43-101-compliant Indicated Mineral Resource of 1.172 million oz. of gold. Mid Migori Mining Ltd, a Kenyan company which is the owner of the Migori Project, is 15% owned by Red Rock and the balance is held by Kansai Mining Corporation, a Canadian company. Red Rock has the right to farm in to a majority position in Mid Migori Mining Limited by performing exploration work, and is manager of the Migori Project with certain additional rights. As announced on Feb. 2, Red Rock now owns and controls, or has the option to own and control, 45,552,237 common shares of Kansai representing it believes 37.96% of the total issued and outstanding common shares of Kansai. Kansai has also entered into an exclusivity agreement with Ariel under which for a period of three months it will deal exclusively with Ariel in relation to possible transactions relating to the Migori project and assets.

Regency Mines (LON:RGM) which owns just under 16.5% of RRR skipped 2% to 2.2p. The company recently took part in a small raise for Alba Minerals (LON:ALBA) which said it will raise GBP90,000, before expenses, via share placing and added that it will reduce its debt by GBP47,250. Starvest plc (LON:SVE) and Regency Mines PLC (LON:RGM), two major shareholders in Alba, have agreed to subscribe for 10 million and 8 million Alba shares respectively at 0.5 pence share to raise GBP90,000. Funds are to be used to fund fieldwork and for working capital purposes. To issue 9.5 million ordinary shares following the capitalization of GBP47,250 of outstanding loans.

Premier Gold Resources (LON:PGR) which may be a new name for many of you, pushed 4% to 0.675p at the mid-price during afternoon trading. The shares recently relisted to trading on the AIM market of the London Stock Exchange. Premier Gold has completed the acquisition of Central Asia Resources Ltd bringing with it the Company's first major gold exploration project, the Cholokkaindy licence, in Kyrgyzstan. The Company's name change to Premier Gold Resources plc. from Premier Management Holdings. Premier Gold's initial focus is on gold projects on the highly prospective Tien Shan gold belt, running through Kyrgyzstan which is the third largest gold producer of the CIS countries. Kyrgyzstan has a well-developed mining industry with good support services. Many investment incentives have been established to use mining as a starting point for economic development in the country. Premier Gold has a highly experienced board and management team with a combination of precious metal mining expertise, local political knowledge and corporate finance experience positioning the Company optimally to gain access to and develop further gold projects in the region. The relisting document is a very detailed one, and after reading through the fine print it looks like the company could be very vocal over the coming months with regards to news flow. We will be watching this one closely over the coming weeks for any additional updates.

Toledo Mining (LON:TMC) slipped another 4% during early trading to hit a low of 18.85p. The shares are now back to what looks like a very interesting level, and we will be keeping a close eye on them over the coming sessions. The last update from the company on the 14th of March said "that the shipping window for 2012 is now open, adding that the MV Jin Rong has now sailed for China with 48,700 wet metric tons of nickel ore representing this year's first shipment of high grade material from the Berong mine."

Rare Earths Global (REG LN) slipped another 10% to 550p at the mid-price during afternoon trading. The shares have been on a real rollercoaster over the last few weeks, jumping from 250p up to a high of 1075p, then back down to the current price of 550p.

GCM Resources (LON:GCM) continued its rebound again today pushing 8% higher to 75p during afternoon trading. One of the reasons for the move could be this little snippet from yesterday's update "The Government is determined to improve the country's power generation situation. It has recently called tenders for numerous coal-fired power stations based on imported coal and many more are planned. Discussions with the Government will now be particularly focused on four key areas: The Phulbari mine could produce coal sufficient to support up to 4000MW of power generation; The Power produced using Phulbari coal would be cheaper than imported coal; Positioning power station(s) at the mine site would make power generation simpler and more reliable, obviating the need for shipping and associated coal handling and inland transport infrastructure; and Utilisation of locally produced coal would create many thousands of Bangladeshi jobs as well as deliver foreign exchange and balance of payments benefits for Bangladesh.

CIC Mining (LON:CICR) jumped another 21% to 1.675p on decent volume, continuing on from yesterday's push. It will be interesting to see if the company have anything to say regarding the recent jump from 1.12p to the high of 1.75p in trading today.

From the trading floor

The FTSE 100 pushed on by 15 points this afternoon to 5679 (+0.25%) on volume of just over 430 million shares. It was no surprise to see the market rebounding after the aggressive sell off in equities yesterday afternoon. The FTSE AIM All-Share Index was up by 0.08% on volume of just over 1 billion shares.

Commodities Corner

Gold - ↑Trading at $1643, up $5 (+0.32%)

Silver - ↑Trading at $30.99, up 20c (+0.69%)

Copper - ↑Trading at $8124, up $62 (+0.77%)

Zinc - ↑Trading at $1988, up $4 (-0.23%)

WTI Crude - ↑Trading at $103.88, up 79c (+0.76%)

Brent Crude - ↓Trading at $118.61, down 8c (-0.08%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com 

Alexander Nubia International inc. (CVE:AAN) announced results from a mapping program at its Hamama gold‐zinc volcanogenic massive sulphide (VMS) deposit in Egypt. The discovery of lenses within the footwall of the principal VMS horizon suggest the presence of at least six stacked layers of VMS material within an open‐ended zone traceable along strike for 2,000 metres. These new VMS lenses have been flagged for deep channel surface sampling.

Archipelago Resources plc (LON:AR.) announced its inaugural production results for Q1 2012. The Company processed 427,859 tonnes at its Toka Tindung, gold mine in Indonesia at an average head grade of 2.44 g/t Au. Recoveries were 91.2%. This produced 32,189 ounces of gold. This was in line with the Company's expectations for the year to date and the Company is confident that it will meet its 2012 full year production guidance of 135,000 to 145,000 Au Eq oz at a cash cost of $540 to $590 per oz.

Highland Gold Mining Limited (LON:HGM) announced its final audited results for the year ended 31 December 2011. Total production of gold and gold equivalents amounted to 184,102 oz (2010: 200,028 oz) derived from MNV, Novo (48.3%) and Belaya Gora. The total cash costs were US$594 per ounce, up from US$513 per ounce in 2010. The Company achieved a 29.6% increase in EBITDA to US$157.1 million (2010: US$121.3 million) reflecting higher realisations on gold sales. Cash and cash equivalents totalled US$126.7 million as of 31 December 2011 (2010: US$222.5 million).

Nord Gold (NORD) has also released a disappointing 1Q'12 production report with mechanical bottlenecks at both Taparko and Berezitovy causing gold production to fall by 11% YoY to 155.7koz. Head grade was maintained with the fall in production entirely caused by reduced throughput during the quarter with ore mined and ore milled down 7% and 12% respectively. Full year guidance remains unchanged at 800-850koz as the Company believes these bottlenecks have now been identified and will be rectified during the current quarter. At Taparko, a regrind mill and two additional leach tanks are expected to be commissioned and at Berezitovy the installation of the secondary crusher and a new penion is on track all by the end of June. The Company expects production to improve in 2H due to the commissioning of the heap leach at Berezitovy, generally better recoveries from all heap leach operations during the milder weather, by mining higher grade zones at Lefa and a material increase in mill productivity with a launch of a pebble crusher.

Oracle Coalfields (lon:ORCP) has released its final results for FY'11. There is nothing material in the results other than the cash position of £1.6m, sufficient for the Company's short term working capital requirements. We expect the Company will have to raise additional funds to progress the existing feasibility study to a standard required to raise debt finance. Post year end the Company received a mining licence for its planned lignite mine in Sindh province, Pakistan and the Company is currently in discussions with international mining contractors for a cost-effective mine development plan and is "evaluating" debt and equity funding options. The Company is planning to build an eventual 5Mtpa lignite operation (gross CV 3,182k calories per wet kilogramme) for use in power generation. The Company also needs to carry out further work on the feasibility of a power plant upon which many of the existing mine study assumptions rely. Expected capital costs for the mine are US$610m, which we believe would be difficult to achieve if the Company was forced purely to rely on the equity markets.

Trans-Siberian Gold (LON:TSG) released a disappointing production update from Asacha. Initially plant through put was impacted by ore not being crushed to a suitable size, power supply problems in March, significant issues with dilution in the first two months and a lack of truck availability meant that ore was not being brought to surface and the Company had to blend material from the low grade stockpile. The net impact of this was a slight decrease in ore processed to 28,877t down from 30,308t in the previous quarter, but more significantly a marked reduction in average grade from 9.36g/t to 6.97g/t. Total gold in Dore fell to 6,689oz from 7,836oz and refined gold fell to 6,281oz. The Company has now adjusted its mining method and increased the onsite laboratory to help grade control and decrease dilution. A new crushing unit has now arrived on site and the Company are currently in discussions to acquire a new truck. As a result it expects the plant production to improve in the next quarter. Whilst this is only the second quarter of production, it is still far below the planned production levels originally envisaged of 84koz Au and 160koz Ag pa over the projects 7 year mine life.

Oil & Gas News

Cove Energy (LON:COV) Just because the Board thinks it's a good offer, the owners must think it is a good offer too. PTT was interested enough in the first place to make an offer, so now that it knows what the price is to be, might there be an alternative? Either way, the management team has delivered value to shareholders, and despite the final sale price likely to be less than $1/mcf net to Cove, the fact that any realistic valorisation route would involve LNG, which is expensive and has a significant lead time, means this is a pretty good offer; it is after all 50% of the prevailing market price for gas in the US currently.

JKX (LON:JKX) So Much More than Revenue: While only flowing at nominal amounts (see below), the importance to the Company is more profound than just the additional revenue that it will generate. The commissioning of this well is a watershed for the Company that sees it put the issues of the past behind it, and look forward. It should also allow the Company to successfully reset its tax and operational cost base, as it is worth mentioning that the new resources tax base that the Company faces is permanent, gone is the low tax operation that existed previously. We believe that the Company has now stabilised, and with agood run, we will see the value of its shares start to reflect the intrinsic worth of its assets. In this news:

• Well M-53 33% beneficial interest to JKX 

o Owned by the state company Ukrgasvydobuvannya

• 3.8mm cfpd of gas and 1.1bpd condensate

• Production now tied back to test separator and sold

• Exported into the Ukrainian gas pipeline network

Hardy Oil (LON:HDY) Today's news on the relinquishment of Block D9 shouldn't come as a surprise, as the Company had been toying with this idea for a few months. Following the KG-D9-A2 natural gas discovery in July last year, it has been unable to drill the fourth and final exploration well within the remaining exploration period, and with the block's hydrocarbon potential deemed low, divesting out of this block should sharpen the focus on the highly prospective D3 exploration licence. Now all that remains in the near term is to get the PY3 licence back up and running. In this news:

• Relinquishment of the KG-DWN-2001/1 (D9) exploration licence

• Main reasons being low potential following results of the three exploration wells, including the KG-D9-A2 natural gas discovery

• D3 remains the main focus

Valiant Petroleum (LON:VPP) The Company took another step forward towards the monetization of the permit resources in Tybalt as it announces a Farm Out Agreement. The Company continues to make steady progress across its portfolio, and this year looks promising as its recent development programme starts to deliver on management's expectations. Farm Outs, approvals, acquisitions, and most importantly opportunity for growth at the drillbit, means the Company is now well positioned for an active drilling campaign this year. In the news:

• Farm Out Agreement with Agora Oil and Gas (UK) Limited ("Agora") in respect of the Tybalt appraisal well

• Agora increases its interest in Tybalt to 40% in return for a partial cost carry.

• The Tybalt drilling results are expected in May

Enegi Oil (LON:ENEG) The commencement of four cased hole tests at Green Point Shale play in EL1070 is positive. Over the next one month we can expect a series of regular updates as all tests are likely to be completed within the next 35 days. In this news:

• Testing has commenced on their Shoal Point 3K39 well, which was drilled to target the Green Point Shale play in EL1070.

• SPE indicates that four cased hole tests have been planned for the Shoal Point 3K39 well, with the first already commenced. 

o SPE further indicates that all the tests will be completed within the next 35 days.

• AJM Deloitte, an independent geological consultant, has been engaged by Enegi to produce a report to assess the extent of the Green Point Shale on the Company's acreage

Jupiter Energy (ASX:JPR) - Commences trial production from the J-50 and J-52 wells: Commencement of trial production from J-50 and J-52 wells in Kazakhstan is a big step towards monetization. It reduces technical risk associated with the asset to a large extent, hence re-rating of the asset valuation. Today's news will aid in building investor confidence and lays the platform for revenue growth as Jupiter focuses on unlocking the values within the Kazakhstan assets. In the news:

• Trial production from the J-50 and J-52 wells has now commenced. Aggregated daily production from the J-50 and J-52 wells is initially expected to be ~600 bpd

• Jupiter is transporting oil from the field by road-tanker to a 3rd party storage base

• Both wells can be produced under Trial Production for a maximum of 3 years and during this time oil is sold into the domestic market

• The Company intends to move these wells from trial production to full production (and therefore from domestic to export oil sales) sooner than this maximum 3 year period

Oilfield Services News

Saipem (BIT:SPM): Q1 results were in line with market expectations with net income up 8.5% to EUR231M. The order backlog is healthy, standingat EUR20,401M of which EUR7,100M is due to be realised in 2012. The Company has stated that the strong results so far and substantial backlog enable the group to confirm its 2013 guidance as announced in February 2012: revenues EUR13Bn, EBIT around EUR1.6Bn and net income of EUR1Bn. Overall, while the results are unexciting themselves, they do indicate the continued favourable trading conditions for the OFS sector as a whole in particular the engineering focussed stocks (Kentz, Petrofac and Wood Group).

Saints & Sinners: Oil & Gas

Borders & Southern (LON:BOR) slipped 31% to 90p during afternoon trading after the company confirmed a "significant gas condensate discovery" in its first exploration well in the region. The well 61/17-1 was drilled to a total depth of 4,876 metres and encountered good oil and gas shows from 4,633 metres down to 4,810 metres. Fluid samples from the reservoir have been recovered and will be brought back to the U.K. for analysis, it said. It is too early to give an accurate resource estimate, but this large simple structure, measuring 26 square kilometres, is likely to contain significant volumes, the company added. Borders & Southern now intends to complete logging well data, plug and abandon the well and move to the Stebbing prospect, the second well in the current drilling program. Chief Executive Howard Obee said: "There is clearly a lot of work ahead of us to understand the size and value of the discovery, but it is a great start and the potential of the basin is exciting." Prior to any speculation the shares were trading at just over 70p, so with the price sitting around the 90p level, the stock is still trading some 28% above the trading level before any of the chatter started.

In sympathy of the Borders & Southern update, Falkland Oil & Gas (LON:FOGL) slipped 13.5% to 81p during early trading. The shares rallied up on the speculation of a Borders oil find, so it was no real surprise to see them trading easier after the confirmation it was a gas find.

I highlighted the move easier in Gulf Keystone (LON:GKP) on Friday, and also pointed out the fact that a number of snippets of news were potentially due. Today the company jumped 10% to 232p during afternoon trading after it said it has completed the testing programme for the Shaikan-4 deep appraisal well, drilled 6km to the west of the Shaikan-1 discovery well in the Kurdistan Region of Iraq. The extensive well testing programme commenced in December 2011 after Shaikan-4 had drilled to a total depth ("TD") of 3,387 metres. Preliminary results of the Shaikan-4 drilling operations were a significant contribution to the new data used by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants, to calculate an addition of over 3 billion barrels of gross oil-in-place volumes for the Shaikan discovery announced in November 2011. In the course of the Shaikan-4 well testing programme the Company has conducted seven well tests in all target formations in the Triassic (Kurre Chine-A, Kurre Chine-B and Kurre Chine-C), Jurassic (Butmah and Lower and Upper Sargelu) and Cretaceous (Chia Gara). Additionally, the Company has performed an acidization and retest of the Sargelu formation interval as part of the well completion process. As a result of the Shaikan-4 well testing programme, the Company has achieved total maximum aggregate flow rates of 24,000 barrels of oil per day ("bopd"). John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented: "Shaikan-4 is our best well drilled to date in the Kurdistan Region of Iraq in terms of the total net pay. These results are particularly impressive because we decided to focus most of our testing on multiple zones of the reservoir, which looked marginal on the well logs. This was done in order to assess the actual log properties required to have a viable producing interval. We have been pleasantly surprised by achieving good flow rates in a new zone in the Upper Sargelu in the Jurassic and finding producible oil in the Chia Gara in the Cretaceous for the first time. In addition, we have more than doubled our initial flow rates in the tested Sargelu interval to over 14,000 bopd following its acidization and retest. The total maximum aggregate flow rates of 24,000 bopd are very significant for Gulf Keystone as we look forward to completing our appraisal of this massive structure with the Shaikan-5 and Shaikan-6 wells and gradually increasing our test production volumes from Shaikan to above 10,000 bopd in 2012. Clearly, Shaikan-4 is another important step forward toward achieving our goal of fully realizing the potential of the giant Shaikan discovery."

Bahamas Petroleum (LON:BPC) pushed 6% higher during afternoon trading after the company said that its petroleum exploration licences state that; "where the licensee applies for renewal and has complied with the Act, Regulations and the terms and conditions contained in this license, the Governor-General shall renew this License for a further period of three (3) years." Bahamas Petroleum Company believes it has significantly exceeded all licence commitments and obligations with cumulative expenditure in excess of $50 million. The Company is already working to fulfil the increased requirements of this next three-year phase.

Matra Petroleum (LON:MTA) continued its moon bound trip once again today, pushing yet another 25% higher during early trading to 2.6p. The volumes on this one have been through the roof over the last week or so, and show no signs of slowing up.

San Leon Energy (LON:SLE) bucked the overall negative trend in the market by pushing 3.6% higher to 10.625p during lunchtime trading. 10p has been a very strong support line over the last few months of trading, so once again it was not a shock to see holders jumping in once again at that level this morning. We will continue to watch this one closely as the volumes have slowly been increasing over the last few sessions. Could the market be getting ready for another update from the company?

Roxi Petroleum (LON:RXP) jumped 10% to 2.9p during early trading, as holders finally drew a line in the sand after the recent collapse. The shares have slipped all the way back from just over 5.5p to the current levels over the last few months, so it was no surprise to a few bargain hunters taking a nibble down at these levels.

Another stock bucking the negative sentiment in the markets today was Max Petroleum (LON:MXP). Shares were 1.5% higher at 11p during early afternoon trading, albeit on thin volume. Recently the company said 3D seismic data acquired in late 2011 has revealed a structure larger than previously identified at the Uytas Field and it now estimates overall oil in place of 184 million barrels, or mmbo. Oil estimates include 58 mmbo in conventional Cretaceous Aptian and Jurassic reservoirs; and 126 mmbo in shallower, non-conventional Cretaceous Albian reservoirs. Well tests have confirmed commercial productivity from the Aptian and Jurassic sandstone reservoirs with Phase One of an appraisal and development program expected to include 30 low-cost, shallow vertical wells. Company is planning an enhanced oil recovery pilot project using steam injection to determine the commerciality of the Albian reservoirs.

Amerisur Resources (LON:AMER) slipped 6% to 23.25p during afternoon trading, albeit on thin volumes once again. The shares are now back to what looks like a major support line at 23p so it will be interesting to see how the holders here react to this level.

Saints & Sinners: Mining

African Barrick Gold (LON:ABG) has started to catch the eye over the last few trading sessions as the stock has slipped back to what looks like a very interesting level here at 350p. The 123.6% Fibonacci retracement level sits around the 326p area, so we could well see a test of this if the 350p support level breaks. The company recently released its production figures for the March quarter. The mines produced 144,643oz of gold at an average cash cost of US$925/oz. Sales totalled 145,417oz. The average realised gold price was US$1,697/oz. ABG also produced 3Mlbs of copper. The first quarter was always expected to be the worst quarter, followed by steady improvements quarter-on-quarter. However, it was 4k oz below our expectations. The low recovery at Buzwagi did not help, but we do expect higher quarterly tonnages and recoveries for the rest of the year which should start to bring down the costs considerably. Also, the buckets on the front-end loaders have been modified which should overcome the abrasive ore problems. We expect power supply problems to continue into the current quarter at Bilyanhulu and then disappear. Our view is that the mine will struggle to average 9g/t in the mill feed due to the high productivity of the lower grade bulk mineable stopes. Overall, this should be a good compromise between ounces and costs. At North Mara, the formal sign-off on the necessary permits is only a few weeks away and we expect the grade profile to match Barrick's guidance. Overall, we currently expect production and cost guidance to be met, but at the lower and upper ends respectively. Our (Fox Davies) target price has been reduced to £4.59/share, formerly £4.89. But, due to the slide in the share price we have upped our recommendation to BUY.

Mwana Africa (LON:MWA) pushed 3% higher to 5.4p during early trading after the company said it is well placed to begin the process of restarting the Trojan nickel mine and further continue exploration work. 14,280 ozs of gold produced at Freda Rebecca, average monthly production for the first quarter was 4,760 ozs, an increase of 19% over the previous quarter. A 41% increase of the gold resource at the Zani-Kodo project taking the total resource to 2.01Moz (based on a cut-off grade of 0.5g/t). Exploration work focused on the Lunsano area of SEMHKAT was carried out, with detailed mapping, trenching, sample preparation and Niton analysis, providing positive indications of good potential deposits. The restart of Bindura Nickel Corporation's Trojan nickel mine is a step closer following the recent fundraising, and work is focused on putting in place all the necessary measures to enable production to recommence as soon as possible.

Athol Gold and Value (LON:AHG) surged 31% to 0.23p during afternoon trading on huge volume of nearly 75 million shares which is well over 15 times the average daily volume. The last few days of trading in this stock have really caught the eye, as the volumes have been surging. It will be very interesting to see if any new holdings updates hit the market over the coming sessions.

CIC Mining (LON:CICR) jumped 20% to 1.45p at the mid-price on almost 5 times the average daily volume. The company did come out on the 5th of April and say they knew of no reason for the share price movement after the shares ran up from .85p to just over 2p in a single day. Then on the 11th the company issued a trading update that said it was pleased to provide an operational update ahead of the publication of its annual report and accounts for the period ended 31 January 2012. As announced in the results for the third quarter ended 31 October 2011 the Company has been working on a number of advisory mandates. As part of its fee for its advisory services, the Company will typically earn an equity interest in the client company. As a result of this strategy CIC has built a significant portfolio of minority interests (the 'Interests') which the Directors believe could represent real value to the Company as these clients grow. The Company is in discussions with a number of its clients with a view to listing the companies on an appropriate stock exchange in the next twenty-four months, which would crystalize the value of the Interests and allow the Company to monetize the Interests.

GCM Resources (LON:GCM) moved 5% higher to 71p, rebounding from Fridays fall from 83p to 62p after the company said following the recent change in management resulting from the departure of the former Chief Executive, the Board has conducted a thorough review of the status of its Phulbari Coal Project ("the Project") in Bangladesh. As a result of this review, the Board has agreed a detailed action plan to fully engage with the Government and people of Bangladesh. This activity will seek to ensure that all stakeholders are fully aware of the significant benefits arising from development of the Project and associated power generation. The implementation of this action plan will necessitate an increased level of commitment and direct participation of certain Board members. In recognition of this increased involvement in working towards achieving the requisite approvals for the Project, the Board has agreed to changes in remuneration.

Anglo Asian Mining (LON:AAZ) pushed 4% higher to 36.25 after the company said it has submitted a Notice of Discovery for gold on its Ordubad contract area in Azerbaijan to the Ministry of Ecology and Natural Resources. The Notice of Discovery is a requirement set out in the company's production-sharing agreement signed with the government of Azerbaijan which needs to be in place before the technical and economical evaluation of a deposit can take place. It said the Notice of Discovery has been submitted following exploration work over its 462 square kilometre license, building on work performed in Soviet times. The work included surface trenching and sampling, re-sampling of historic sites and drilling. Anglo Asian said further results will be announced in due course and more exploration work is now planned with a view to confirming a small gold deposit with production potential. According to its production-sharing agreement, following the submission of the Notice of Discovery, the company has six months to submit a development and production program to the government for approval.

From the trading floor

Continued fears of a sharper slowdown than anticipated in China was one of the main drives behind the fall of over 100 points on the FTSE 100 Index by the end of lunch. The Index was down 104 points at 5668 (-1.79%) albeit on very thin volume of just over 330 million shares. The FTSE AIM All-Share Index was 0.91% easier on volume of just under 1 billion shares.

Commodities Corner

Gold - ↓Trading at $1625, down $15 (-0.92%)

Silver - ↓Trading at $30.83, down 84c (-2.65%)

Copper - ↓Trading at $7994, down $114 (-1.41%)

Zinc - ↓Trading at $1985, down $10 (-0.52%)

WTI Crude - ↓Trading at $102.76, down $1.11 (-1.07%)

Brent Crude - ↓Trading at $117.62, down $1.14 (-0.96%)

Any questions please don't hesitate to contact me at steve.asfour@fox-davies.com or visit www.viewsfromthetradingfloor.com or www.fox-davies.com