column http://www.proactiveinvestors.co.uk Proactiveinvestors column RSS feed en Tue, 20 Feb 2018 21:33:21 +0000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) In the news: Panthera Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29396/in-the-news-panthera-resources-29396.html FROM THE BROKING DESK

A reminder that we’re marketing Geoff Stanley of Panthera Resources* (PAT LN) in the UK this week. Space is now obviously limited, but if you missed our previous announcement let us know and we’ll try and squeeze you in. RFC Ambrian listed Panthera on AIM just before Christmas last year. It owns rights to a 70% interest in the Bhukia Gold Project in Rajasthan, India, where it has defined a JORC resource of 1.74Moz of gold at a grade of 1.4 g/t.

While the company is underpinned by a portfolio of prospective West African gold exploration licences, it’s Bhukia that provides the most potential. The Geological Survey of India (GSI) has explored the project area, estimating a resource of 6.7Moz at a grade of 2.0 g/t; although not JORC-compliant, this represents a well-defined exploration target. Mineralisation remains open in all directions, suggesting the ultimate size of the project could be even greater. Progress on the granting of the Prospecting Licence (PL) has picked up over the past year and, although the timing is not final yet, the process seems on track. Panthera offers upside to exploration results from its West African portfolio and the grant of the PL and the resource drill-out at Bhukia.

 

RFC Ambrian recently initiated coverage with a Speculative Buy: Panthera Resources — Chasing an Indian Elephant, 15 January 2018. This rating recognises the high quality of Bhukia, but also that the PL remains outstanding. We have an illustrative valuation matrix justifying a valuation of 32p/share currently, increasing to 57p on the grant of the PL with the potential to increase to 109p if Panthera successfully outlines a JORC-compliant resource of 6.7Moz. We expect to revisit our recommendation after the granting of a PL or positive exploration results from the company’s West African projects. 

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Mon, 19 Feb 2018 09:22:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29396/in-the-news-panthera-resources-29396.html
In the news: Panthera Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29367/in-the-news-panthera-resources-29367.html FROM THE BROKING DESK

We’re marketing Geoff Stanley of Panthera Resources* (PAT LN) in the UK next week. RFC Ambrian listed Panthera on AIM just before Christmas last year. It owns rights to a 70% interest in the Bhukia Gold Project in Rajasthan, India, where it has defined a JORC resource of 1.74Moz of gold at a grade of 1.4 g/t.

While the company is underpinned by a portfolio of prospective West African gold exploration licences, it’s Bhukia that provides the most potential. The Geological Survey of India (GSI) has explored the project area, estimating a resource of 6.7Moz at a grade of 2.0 g/t; although not code-compliant, this represents a very well-defined exploration target. Mineralisation remains open in all directions, suggesting the ultimate size of the project could be even greater. Progress on the granting of the Prospecting Licence (PL) has picked up over the past year and, although the timing remains uncertain, the process appears on track. Panthera offers upside to exploration results from its West African portfolio and the grant of the PL and the resource drill-out at Bhukia.

 

RFC Ambrian recently initiated coverage with a Speculative Buy: Panthera Resources — Chasing an Indian Elephant, 15 January 2018. This rating recognises the high quality of Bhukia, but also that the PL remains outstanding. We have presented an illustrative valuation matrix justifying a valuation of 32p/share currently, increasing to 57p on the grant of the PL with the potential to increase to 109p if Panthera successfully outlines a JORC-compliant resource of 6.7Moz. We expect to revisit our recommendation after the granting of a PL or positive exploration results from the company’s West African projects. 

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Mon, 12 Feb 2018 10:02:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29367/in-the-news-panthera-resources-29367.html
In the news: Weatherly International http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29331/in-the-news-weatherly-international-29331.html COMPANIES

WEATHERLY INTERNATIONAL*

WTI : LN | 1.8p | US$26.5m | Speculative Buy

Outlines Plans for Kitumba Copper Project in Zambia

Weatherly International is continuing to move towards completing the acquisition of the Kitumba Copper Project in Zambia, with shareholders of the current owner Intrepid having recently voted in favour of the deal. The transaction remains subject to regulatory approvals in Zambia, but we expect it to proceed. The company also outlined what appear to be very sensible plans for a re-scoping of the project as a smaller, higher-grade operation with a simpler processing route. Weatherly also stated that it plans to complete an updated PFS in 2018 and a DFS in 2019, potentially allowing construction to commence in 2020.

COMMENT: Kitumba is an attractive, mid-scale copper project that has had a significant amount of work completed on it. At a cut-off grade of 1.0% Cu the total resource at the project contained 578,000t Cu at a grade of 2.3% Cu. The top of the deposit lies around 150m below surface and contains both oxide and sulphide mineralisation. It was historically viewed as a relatively large-scale development of an underground mine, along with a complicated processing route that involved the pressure oxidation of the sulphide mineralisation and before leaching.

Weatherly is proposing a staged development, with an initial focus on the higher-grade core. At a 2% Cu cut-off, the resource totals 342,000t of copper at a grade of 3.6%. The company is considering a processing rate of 0.75-1.0Mtpa and envisages using a simpler processing route that would initially float the sulphide mineralisation to produce a copper concentrate and undertake a tank leach of the flotation tail to produce copper cathode. No details are available, but we suggest that this approach could result in a smaller — but considerably higher return — project compared to previous development scenarios.

We reiterate our Speculative Buy rating on the basis that Weatherly offers significant operational and financial leverage to the price of copper. We also consider that the acquisition of the Kitumba Project has the potential to add significantly to the value of the company. However, we do not consider it appropriate to have a target price at this time given the ongoing support needed from Orion

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Fri, 02 Feb 2018 10:37:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29331/in-the-news-weatherly-international-29331.html
In the news: Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29322/in-the-news-metal-tiger-29322.html FROM THE BROKING DESK

Jim Taylor has released Metal Tiger* — Positive PFS Completed, 31 January 2018. This piece covers the results of a positive pre-feasibility study into the development of the T3 Project in Botswana, in which the company owns a 30% JV interest, with the ASX-listed MOD Resources owning the remaining 70%. The JV now aims to complete a definitive feasibility study on the project by the end of 2018, with a view to taking a decision to mine by the end of the year.

 

We maintained our Buy rating and target price of 3.6p. We’ve updated our valuation for the PFS parameters and increased our long-term copper price assumption by 10% from US$5,995/t to US$6,612/t. We consider that the results of the PFS reflect an interim stage of the project’s development and note that drilling has been ongoing since August, which will lead to a resource update (planned for 2Q18). We also observe that drilling of many high-quality regional exploration targets is planned to be undertaken this year. 

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Thu, 01 Feb 2018 15:28:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29322/in-the-news-metal-tiger-29322.html
In the news: Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29317/in-the-news-metal-tiger-29317.html FROM THE BROKING DESK

We’ve had some more positive news from Metal Tiger*. The PFS for the open-pit, high-grade T3 Copper Project in Botswana has been completed; Metal Tiger owns 30% of this in a JV with the ASX-listed MOD Resources. In a ‘base case’ scenario, with production from Proven and Probable ore reserves and throughput of 2.5Mtpa, the PFS indicates about US$730m in EBITDA over nine years, and — were the expansion case to proceed — an EBITDA of US$1.1bn over 12 years. The JV partners have agreed to proceed with a feasibility study this quarter. Other headlines from the base case PFS were: a pre-tax NPV8% of US$281m, using a long-term US$3.00/lb Cu price, IRR of 39% and payback of 2.7 years.

As CEO Michael McNeilly pointed out, this PFS is “robust”. There’s no doubt that the T3 deposit is an extremely exciting prospect. I don’t think the market has seen a copper project this good for quite a while, and it’s also encouraging that the relationship with MOD is strong; the two parties are working well together to progress this. We should have a full piece out on this later.

 

In a separate announcement, Metal Tiger has now sold down its position in Kingsgate Consolidated Limited (KCN) to zero. This is the second sell-down in a week, and raised a further £1,973,209 for Metal Tiger. While the company may not have achieved all its ambitions with Kingsgate, it’s certainly proved a very lucrative bit of trading. 

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Wed, 31 Jan 2018 11:28:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29317/in-the-news-metal-tiger-29317.html
In the news: Panthera Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29307/in-the-news-panthera-resources-29307.html FROM THE BROKING DESK

In view of yesterday’s news that Panthera Resources* (PAT LN) had made significant progress towards getting a Prospecting Licence, we thought our recent report was worth highlighting. Last month Jim Taylor released this initiation report: Panthera Resources — Chasing an Indian Elephant, 15 January 2018. This is a 40-page introduction to the recently-listed, UK-based mineral exploration and development company. The potential Prospecting Licence is for the Bhukia Gold Project in Rajasthan, India, where Panthera owns rights to a 70% interest.

 

Previous work by the Geological Survey of India outlined a non-compliant resource containing 6.7Moz of gold at a grade of 2.0 g/t Au at Bhukia. Also, a limited drill programme by the company outlined a JORC-compliant resource of 1.7Moz of gold at a grade of 1.4 g/t. Mineralisation extends from surface, supporting the view that the project should be able to be developed as a large, bulk-mineable, open-pit operation with a low strip ratio. Metallurgical work to date suggests the gold is non-refractory and that the most appropriate processing route is likely to be flotation followed by regrinding and CIL, with 85-90% recoveries expected. 

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Tue, 30 Jan 2018 09:58:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29307/in-the-news-panthera-resources-29307.html
In the news: Panthera Resources & West African Gold http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29298/in-the-news-panthera-resources-west-african-gold-29298.html FROM THE BROKING DESK

Panthera Resources* (PAT LN) has announced that significant progress has been made towards the granting of a Prospecting Licence (PL) over the Bhukia Gold Project in the State of Rajasthan in India. The company’s JV has withdrawn four petitions that prevented the Government of Rajasthan (GoR) from creating third-party interests over a large area previously held by the JV under a Reconnaissance Permit. The High Court of Rajasthan noted letters from the GoR of its intent to grant the PL if the JV withdrew all pending court cases and directed the GoR to take a decision on the grant of the PL application, preferably within three months. Importantly, the court also gave the JV the right to refile and approach it with fresh cause if the decision of the GoR is unfavourable.

This is excellent news for Panthera. The company has been involved in a protracted process to have a PL granted over a 21km2 area at Bhukia; previous work on the area by the Geological Survey of India outlined a non-compliant resource containing 6.7Moz of gold at a grade of 2.0 g/t Au, while a limited drill programme by the company outlined a JORC-compliant resource of 1.7Moz of gold at a grade of 1.4 g/t. Mineralisation extends from surface, supporting the view that the project should be able to be developed as a large, bulk-mineable, open-pit operation with a low strip ratio. Metallurgical work to date suggests the gold is non-refractory and that the most appropriate processing route is likely to be flotation followed by regrinding and CIL, with 85-90% recoveries expected.

We think this is a significant step towards the granting of the licence. The implication is that a decision on the PL could be taken by the GoR within three months. This would be followed by the granting of consent for the PL by the Federal Government of India (GoI) before the final grant and execution of the PL by the GoR, paving the way for the recommencement of exploration activity at the project.

A total of 370 drill holes have been completed on site since 1990. These have provided a large database of information and a very helpful guide to future exploration. The company expects the completion of an exploration programme to deliver a JORC-compliant resource over the project area could cost US$20m and would take two years to complete. Pending the grant of the PL, we maintain our Speculative Buy rating.

We had a problem with our website last Friday. A few people alerted us to the fact that they couldn’t get access to Jim Taylor and David Bird’s 80-page report West African Gold — Plenty to Play For, January 2018. This has now been updated and we apologise for any inconvenience

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Mon, 29 Jan 2018 09:59:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29298/in-the-news-panthera-resources-west-african-gold-29298.html
In the news: West African Gold http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29289/in-the-news-west-african-gold-29289.html FROM THE BROKING DESK

Jim Taylor and David Bird have a new sector piece out: West African Gold — Plenty to Play For, January 2018. In an 80-page report, they review the current status of the West African gold sector. The piece includes features on the region, the main countries involved and the companies active in the space.

The gold industry in West Africa remains healthy. Gold output is robust, with slowly declining average grades partly offset by improved recoveries. Six new mines are currently coming on stream, there are a significant number of projects at the feasibility stage, and exploration expenditure increased in 2017. While geopolitical risks remain, that has always been the case and the investment framework is stable and the legal structure is sound.

The report takes a fresh look at current gold mining, development and exploration activity in West Africa. Our database has identified 38 mines operating in the region in 2017, with a further six under construction that were due to come on stream in late-2017 and in early-2018. We have also identified 24 greenfield exploration projects that have a reported resource of more than 1.0Moz and a further 23 projects at an earlier stage of exploration.

 

West Africa is one of the world’s great gold provinces and we have taken a look at the players in the region, both the producers and the explorers. Within our database of West African gold producers, we identified 21 listed companies. Of these, we regard seven as ‘globally-focused’ producers, with the balance largely ‘regionally-focused’, although some of these regional players do have assets elsewhere. Then, within our database of West African gold explorers, we have identified a further 22 junior companies that are currently active in the region. 

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Fri, 26 Jan 2018 11:46:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29289/in-the-news-west-african-gold-29289.html
In the News - Metal Tiger & Plateau Uranium http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29278/in-the-news-metal-tiger-plateau-uranium-29278.html FROM THE BROKING DESK

There are a couple of bits of news out on Metal Tiger* that we think are worth mentioning. It has announced that it has reduced its holding in Kingsgate Consolidated Limited (KCN), selling just under 8m shares for gross proceeds of £1,534,260. Metal Tiger retains just over 11.5m shares in KCN, representing 5.15% of the issued share capital.

Metal Tiger has been critical of Kingsgate management. It was narrowly defeated in an attempt earlier this month to remove three existing directors from the board of Kingsgate and replace them with five new directors, including Richard Warburton. MTR Chief Executive Michael McNeilly says the sale of the shares in Kingsgate does not “mean we are going away” and that “… we will be watching the Board closely to see if they deliver on what they have promised.” MTR has said that the bulk of its attention will turn to its copper/silver JV with MOD Resources on the T3 deposit in Botswana. A PFS on T3 is expected shortly.

Metal Tiger has also announced a £300,000 investment into the AIM- and ASX-listed Thor Mining. Thor has a portfolio of tungsten, copper and lithium projects in Australia and Arizona.

 

We remind investors that Ian Stalker, Chairman of Plateau Uranium†† and CEO of LSC Lithium, is marketing with us on both companies next week. LSC Lithium is a TSX-listed company with a market cap of around C$200m and is looking to deliver an initial NI 43-101 resource shortly. LSC boasts the largest land package of lithium-bearing brines in northern Argentina, a prolific area within the ‘Lithium Triangle’ covering Argentina, Bolivia and Chile. Please let us know if you would like to meet with Ian. 

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Wed, 24 Jan 2018 11:19:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29278/in-the-news-metal-tiger-plateau-uranium-29278.html
In the news: Base Resources, KEFI Minerals & Weatherly International http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29259/in-the-news-base-resources-kefi-minerals-weatherly-international-29259.html FROM THE BROKING DESK

Base Resources* has announced the successful close of the retail component of its entitlement offering, with an approximate 70% participation, raising A$7.7m. This follows on from the strong support it received for the institutional entitlement offer and placing component, which was led and underwritten by RFC Ambrian. This was completed earlier in January and secured A$89m at the offer price of A$0.255/share (around £0.165).

The company agreed to acquire an 85% interest in the Toliara Sands Project in Madagascar for US$75m in December 2017. The remaining 15% can be acquired for US$17m, payable on achieving certain milestones. With the completion of the capital raise, Base will now finalise the acquisition, which is expected to close next week.

The Toliara Sands Project is already permitted, and is underpinned by the Ranobe deposit. This deposit has a JORC 2012 Resource of 857Mt at 6.2% heavy mineral (HM), including 612Mt at 6.7% HM in the Measured and Indicated categories. By our calculations that makes it one of the largest and highest-grade heavy mineral sands development projects anywhere in the world. We estimate the NPV10 of Toliara at US$390m, net of milestone payments.

Much good work has already been completed by the previous owner World Titanium Resources. Base’s development plan is to complete a full study phase ahead of a decision to proceed to construction in 2HCY19. This timetable could see the Toliara Sands Project in production in mid-2021.

We think this is the best development asset in the space with the right management team at the right time in the cycle. This acquisition should be transformational for Base, giving it the opportunity to enhance its already demonstrated development expertise at the Kwale Project in Kenya. Unlike much of its peer group, Base will enjoy the benefits of asset and jurisdictional diversification and scale. Mine life, projected for at least 30 years at Toliara, will no longer be an issue for the company; we see no reason for the stock to trade at a discount to the sector any longer.

We have published two pieces on Base in the last month or so. The first one looking at the Toliara acquisition can be seen here, while last week’s piece on its latest quarterly update can be viewed here.

 

On reports, we had some issues with our website yesterday. This meant that our piece on KEFI Minerals’* latest release was not fully available. It can now be accessed here

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Fri, 19 Jan 2018 13:01:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29259/in-the-news-base-resources-kefi-minerals-weatherly-international-29259.html
In the News - Lithium & KEFI Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29251/in-the-news-lithium-kefi-minerals-29251.html While cobalt is still attracting much attention, lithium developments are coming thick and fast. Lithium prices have continued to climb; according to the Benchmark Minerals Lithium Index (referencing direct market pricing on lithium hydroxide and lithium carbonate, the forms used in batteries for electric vehicles), current pricing is at an all-time high and was up 27% in 2017. There is a strong drive ongoing to ensure safe and secure sources of long-term supply for those involved in transport electrification.

Just last Tuesday Toyota announced that it will be taking a 15% stake in the Australian-listed lithium miner Orocobre for US$232m as part of a capital raise. The money will go towards doubling the plant’s current lithium carbonate capacity to 42,500t. This will put Toyota in the same category as Chinese manufacturers BYD and Great Wall Motor company in that it too will have directly secured future lithium supplies for batteries for electric vehicles.

This week also saw Ford announce its commitment to an electric future. It released a decision to invest US$11bn over the next five years into electric vehicle and hybrid development, doubling the size of the previously-announced investment. It’s thought that this will give it 40 hybrid or pure electric vehicle ranges to sell by 2022. This follows Volkswagen’s November statement about the doubling of its electric vehicle programme to US$40bn by the end of 2022.

Still, western auto-manufacturers (with the notable exception of Tesla) appear to be behind their Asian competitors in securing supply for one of the key products (not to mention cobalt). This will determine their ability to deliver on expansive (and expensive) promises of an electric vehicle future over the next decade. Whatever the eventual supply landscape of lithium looks like, one would imagine that securing short- and medium-term supply chains should be at the top of western OEMs’ agendas.

There are only a handful of stocks on the AIM market that offer exposure to lithium. Just a few these have resources in Europe, and it seems unlikely that these have gone unnoticed by European OEMs and battery producers.

One such company is the dual ASX-AIM-listed European Metals Holdings. This company presented at our Mobility Metals Conference in London back in October. The location and potential scale of its Cinovec Project (in the heart of Europe on the Czech-German border) make it arguably globally significant. It is within 300km of the main operations of VW, Daimler, BMW, Porsche and Skoda. Additionally, LG, Samsung A123, BMZ and, indeed, Tesla all have (or are planning to have) battery manufacturing plants within easy trucking distance of the project.

It is the largest lithium resource in Europe, and the fourth largest non-brine lithium resource in the world. Its JORC total mineral resource estimate is 656Mt @ 0.4% Li2O, for 7Mt of contained lithium carbonate equivalent and 263,000t of tin. According to the company’s pre-feasibility study, it is also potentially the lowest-cost hard rock lithium producer in the world, with projected operating costs (with by-product credits) of U$3,483/t Li2CO3. Current plans are for 20,000tpa of LCE production over a 28-year mine life. CEO Keith Coughlan is looking to complete a DFS during 2018.

Elsewhere, Jim Taylor has a short piece out this morning: KEFI Minerals* — December Quarter Update, 18 January 2018. KEFI is continuing to work towards the financing of its Tulu Kapi Gold Project in Ethiopia, which it now expects to take place in 2Q18. This would allow its commissioning around the end of 2019. The proposed debt portion of the financing is subject to agreeing the level of historical expenditures on the project with the government, the commencement of community resettlement and an equity capital subscription. It also remains subject to due diligence, regulatory approvals and the execution of binding documentation.

 

We reiterated our Buy rating and revised our target price down from 8.0p to 6.8p. We reduced our target price due to an increase in anticipated dilution as a result of the fall in the share price since our last report. We have assumed that the company will raise US$25m in equity at a price of £0.03/share (previously£0.05/share), which would result in the issuance of 638m shares, equivalent to 192% of the outstanding share capital. We have also assumed that the company secures a US$17m working capital facility. 

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Thu, 18 Jan 2018 12:28:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29251/in-the-news-lithium-kefi-minerals-29251.html
In the News - http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29232/in-the-news--29232.html FROM THE BROKING DESK
Jim Taylor has a new initiation piece out: Panthera Resources*† — Chasing an Indian Elephant, 15 January 2018. This is a 40-page introduction to this recently-listed, UK-based mineral exploration and development company. Panthera owns rights to a 70% interest in the Bhukia Gold Project in Rajasthan, India, where it has defined a JORC resource of 1.74Moz of gold at a grade of 1.4 g/t.

While underpinned by a portfolio of prospective West African gold exploration licences, it is Bhukia that provides the main excitement. The Geological Survey of India (GSI) has also explored the project area, estimating a resource of 6.7Moz at a grade of 2.0 g/t; although not code-compliant, this represents a very well-defined exploration target. Mineralisation remains open in all directions, suggesting the ultimate potential of the project could be even greater. Progress on the granting of the Prospecting Licence (PL) has picked up over the past year; although timing remains uncertain, the process appears on track. Panthera offers upside to exploration results from its West African portfolio and the grant of the PL and the resource drill-out at Bhukia.

We initiated coverage with a Speculative Buy. This rating recognises the high quality of Bhukia, but also that the PL remains outstanding. We have presented an illustrative valuation matrix justifying a valuation of 32p/share currently, increasing to 57p on the grant of the PL with the potential to increase to 109p if Panthera successfully outlines a JORC-compliant resource of 6.7Moz. We expect to revisit our recommendation after the granting of a PL or positive exploration results from the company’s West African projects.

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Tue, 16 Jan 2018 10:08:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29232/in-the-news--29232.html
In the News - Chasing an Indian Elephant http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29228/in-the-news-chasing-an-indian-elephant-29228.html Panthera Resources is a UK-based mineral exploration and development company that listed on AIM in December 2017. It owns rights to a 70% interest in the Bhukia Gold Project in Rajasthan, India, where it has defined a JORC resource of 1.74Moz of gold at a grade of 1.4 g/t. While underpinned by a portfolio of prospective West African gold exploration licences, it is Bhukia that provides the main excitement. The Geological Survey of India (GSI) has also explored the project area, estimating a resource of 6.7Moz at a grade of 2.0 g/t; although not code-compliant, this represents a very well-defined exploration target. Mineralisation remains open in all directions, suggesting the ultimate potential of the project could be even greater. Progress on the granting of the Prospecting Licence (PL) has picked up over the past year and, although the timing of an approval remains uncertain, the process appears back on track. Panthera offers upside to exploration results from its West African portfolio and the grant of the PL and the resource drill-out at Bhukia.

 

Initiating coverage with a SPECULATIVE BUY — This rating recognises the high quality of Bhukia, but also that the PL remains outstanding. We have presented an illustrative valuation matrix justifying a valuation of 32p/share currently, increasing to 57p on the grant of the PL with the potential to increase to 109p if Panthera successfully outlines a JORC-compliant resource of 6.7Moz. We expect to revisit our recommendation after the granting of a PL or positive exploration results from the company’s West African projects. To view the full report, please click here.

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Mon, 15 Jan 2018 12:29:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29228/in-the-news-chasing-an-indian-elephant-29228.html
In the News - Base Resources and Mining Indaba http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29218/in-the-news-base-resources-and-mining-indaba-29218.html FROM THE BROKING DESK

Jim Taylor has put out Base Resources* — December Quarter Activities, 11 January 2018. Base put in another strong operating performance at Kwale in Kenya during the quarter, with production of all products on track to meet or exceed guidance for FY18. The outlook is positive, with stable production and a strong pricing environment, particularly for zircon and rutile. We also believe that the acquisition of the Toliara Sands Development Project in Madagascar is accretive and represents a sound strategic fit for the company.

We maintained our Buy rating and raised our target price to A$0.62. We have increased our target price from A$0.54 after including a risked value for the Toliara acquisition and allowing for the recent share issue. The valuation of the Kwale operation is based on long-term commodity price assumptions of US$180/t for ilmenite, US$1,050/t for rutile and US$1,150/t for zircon. We estimate the net NPV10 value of Toliara at US$390m, to which we have applied a risk multiple of 0.5x to allow for the potential dilution associated with the financing and delivery of the project.

And a final reminder that we’re partnering with Mining Indaba in its launch of the Junior Mining Showcase in Cape Town over 5-8 February 2018. This will be a dedicated, deal-making zone with restricted access. It will group over 60 junior miners in one place.

 

Also, the Investment Battlefield, a Shark Tank/Dragon’s Den-style pitching session, will return in 2018. Given its success in 2017, this is going to be even bigger in 2018, with junior miners pitching their projects to managers of some of the world’s biggest mining funds. 

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Fri, 12 Jan 2018 10:32:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29218/in-the-news-base-resources-and-mining-indaba-29218.html
In The News - Base Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29213/in-the-news-base-resources-29213.html A full report can be accessed through this e-mail (see below).

Base Resources put in another strong operating performance at Kwale in Kenya during the December quarter, with production of all products on track to meet or exceed guidance for FY18. The outlook is positive, with stable production and a strong pricing environment, particularly for zircon and rutile. Also, we believe that the acquisition of the Toliara Sands Development Project in Madagascar is accretive and represents a sound strategic fit for the company.

Maintaining our Buy rating and raising target price to A$0.62. We have increased our target price from A$0.54 after including a risked value for the Toliara acquisition and allowing for the recent share issue. The valuation of the Kwale operation is based on long-term commodity price assumptions of US$180/t for ilmenite, US$1,050/t for rutile and US$1,150/t for zircon. We estimate the net NPV10 value of Toliara at US$390m, to which we have applied a risk multiple of 0.5x to allow for the potential dilution associated with the financing and delivery of the project.

RFC Ambrian acts as Nomad and Broker to this company

The link below will take the recipients of this e-mail directly through to the RFC Ambrian website where they will be able to access this 6-page report.
To view the full report, please click here.

This is a temporary link that will be switched off after a limited time period. To gain permanent access to this and all our other reports, please follow the instructions to register for a username and password on the RFC Ambrian website.

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Thu, 11 Jan 2018 15:29:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29213/in-the-news-base-resources-29213.html
In the News - Base Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29137/in-the-news-base-resources-29137.html FROM THE BROKING DESK

There’s been some fantastic news from Base Resources*. The company has announced the acquisition of the Toliara Sands Project in Madagascar. Base believes this to be the best mineral sands development project in the world.

This deal will be funded through a A$100m equity raise, for which RFC Ambrian acted as Offer Manager. This involved a combined share placement to institutional investors and a 1 for 3 accelerated pro rata renounceable institutional entitlements offer at A$0.255/share. This element, which accounts for A$88.4m, has been completed and is being underwritten by RFC Ambrian. The final A$11.6m will be raised through a retail entitlement offer, which opens on Thursday 28 December and closes on Wednesday 17 January.

The A$0.255/share Offer Price represents a 16.4% discount to Base’s last traded price on the ASX on 18 December 2017 (a 15.2% discount to the ten-day VWAP). Base shares will remain in suspension on the ASX until 21 December, although they will be fully tradeable on AIM.

The Toliara Sands Project is already permitted, and is underpinned by the Ranobe deposit. This deposit has a JORC 2012 Resource of 857Mt at 6.2% heavy mineral (HM), including 612Mt at 6.7% HM in the Measured and Indicated categories. By our calculations that makes it one of the largest and highest-grade heavy mineral sands development projects anywhere in the world.

Much good work has already been completed by the previous owner World Titanium Resources. Base’s development plan is to complete a full study phase ahead of a decision to proceed to construction in 2HCY19. This timetable could see the Toliara Sands Project in production in mid-2021.

 

We think this is the best development asset in the space with the right management team at the right time in the cycle. This acquisition should be transformational for Base, giving it the opportunity to enhance its already demonstrated development expertise at the Kwale Project in Kenya. Unlike much of its peer group, Base will enjoy the benefits of asset and jurisdictional diversification and scale. Mine life, projected for at least 30 years at Toliara, will no longer be an issue for the company; we see no reason for the stock to trade at a discount to the sector any longer. Further comment will follow. 

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Tue, 19 Dec 2017 12:19:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29137/in-the-news-base-resources-29137.html
In The News - Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29081/in-the-news-metal-tiger-29081.html COMPANIES
Metal Tiger
LON:MTR 


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

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


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


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


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


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

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Thu, 07 Dec 2017 13:45:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29081/in-the-news-metal-tiger-29081.html
In The News - Wave Swell Energy http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29005/in-the-news-wave-swell-energy-29005.html FROM THE BROKING DESK


Wave Swell Energy*** got a fair bit of coverage in the Australian press this morning, with articles such as this. We’re assisting Wave Swell in a capital raising at the moment. The company is developing its wave energy generation technology, and is carrying out commercial trials off Tasmania's King Island ahead of a potential listing. Full details on the company can be found on its website.
The company has signed an off-take agreement with Hydro Tasmania for an initial 200KW trial unit, which it will operate during 2018 after its first funding goals are reached. Wave Swell CEO Tom Denniss has said that all energy generated will initially be provided to the King Island grid and Hydro Tasmania. Current tests put forecast generation costs at A$100/MWh, or A¢10/KWh. Typical solar systems cost around A¢13/KWh and wind about A¢7/KWh, not including grid costs. “This is really about ensuring independent verification, and Hydro Tasmania verifying that we can produce at the low cost of A¢10/KWh," Mr Denniss said.


It has built “big concrete caverns” that use the constant back and forth flow of the ocean to generate energy. “What sets this apart from other wave generation technology is its lack of moving parts," Mr Denniss commented. Its blocks are located in water depths of around 10m, and typically up to 500m offshore. They connect to the mainland via undersea cables and provide energy to the onshore grid via a transformer unit. The units can also be used as breakwaters or as an artificial reef, with trials demonstrating an increase in marine life where they are installed.

Wave Swell is still looking to investors to raise A$8.3m over the coming months, having secured A$2m in investment to date. It has set a goal of raising A$10m in total funding, Mr Denniss told Fairfax Media. “We are targeting anyone for funding, from energy companies, construction companies, or individuals who see upside in investing.”

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Mon, 20 Nov 2017 09:19:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/29005/in-the-news-wave-swell-energy-29005.html
In the news: Plateau Uranium http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28994/in-the-news-plateau-uranium-28994.html FROM THE BROKING DESK
We have some encouraging exploration results from Plateau Uranium’s†† Macusani Uranium Project in south-eastern Peru. The first hole drilled into a new location, Falchani, at which radioactivity is elevated over a 2km2 area, returned assays that showed two significant zones of mineralisation, the first being uranium-rich and the second, deeper zone being lithium-rich. The hole returned 45m from surface grading 633ppm (0.0633%) U3O8 with minor lithium, and also 51m grading 2,712ppm Li (equivalent to 0.58% LiO2) from 95m to the end of the hole at 146m.


As the company highlighted, these results are significant. The uranium grade is twice that of the current resource, while the lithium grade in the lower hole is 6x that of the current resource! Plateau has outlined 124Mlb of U3O8 and 176,000t of LiO2 in resources elsewhere on the project, and completed a scoping study on a uranium heap leaching project in January 2016. However, given the increasing appreciation of the potential for the project to produce lithium along with uranium, the focus has now moved to a tank leach project. In addition to exploration, current work is concentrated on metallurgical test-work to optimise both lithium and uranium production.

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Thu, 16 Nov 2017 10:40:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28994/in-the-news-plateau-uranium-28994.html
In the news: Metal Tiger & Cassini Resources/Oz Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28989/in-the-news-metal-tiger-cassini-resourcesoz-minerals-28989.html
FROM THE BROKING DESK
There are a few things worth mentioning this morning. First off is an announcement by Metal Tiger*† (MTR LN : 2.2p : US$27m : Buy : TP 3.6p) that it has requested that Kingsgate hold a shareholders meeting to consider changes to the Kingsgate Board. MTR owns 6.7% of Kingsgate and is seeking approval to remove three of the four existing directors and replace them with three MTR directors and two independent directors (nominated by MTR). We put out an initiation piece on MTR last week. It can be viewed here.


Also, Metal Tiger - LON:MTR and its JV partner MOD Resources announced the results of six additional holes from their T3 Copper Project in Botswana. MTR has a 30% interest in this. The results point to the extension of mineralisation to the east and west of the main area of mineralisation on which a scoping study was completed towards the end of last year. Four holes tested mineralisation to the east of the planned pit and intersected multiple veins of copper mineralisation between 186m to 448m downhole (including 3m @ 1.4% Cu). The two holes drilled to the west returned multiple intervals between 235m and 492m downhole (including 4.5m @ 4.0%). The results continue to suggest that the project has the potential for underground mining (particularly to the west), in addition to open-pit mining, on which a PFS is planned for completion by the end of this year. Drilling is continuing apace, with a sixth rig now on site.


There was another noteworthy announcement from Cassini Resources (ASX:CZI, US$17m). Oz Minerals is now sufficiently excited by the results of a scoping study into Cassini’s West Musgrave Nickel-Copper Project that it will move to the next stage of its earn-in on the project, putting it firmly on the map. Oz will earn a 51% interest in the project through spending A$19m within 18 months, and will also manage the pre-feasibility study. Oz can earn up to 70% in the project in return for funding all study work up to a decision to mine.


The West Musgrave Project is located in east-central Western Australia. The scoping study on the Nebo-Babel deposits indicated that a large-scale development with 10Mtpa throughput returned the best results. The project would produce around 22,500tpa of nickel, 27,500tpa of copper and 850tpa of cobalt. It’s expected to have attractive C1 costs of around US$1.45/lb nickel in concentrate. With pre-production capex of some US$600m, the study returned a post-tax IRR of 20-25%. The pre-feasibility study is pencilled in for completion by mid-2019, with the DFS a year later.

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Wed, 15 Nov 2017 11:39:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28989/in-the-news-metal-tiger-cassini-resourcesoz-minerals-28989.html
In the news: Great Boulder Resources, Mineral Sands, Metal Tiger & Mining Indaba http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28980/in-the-news-great-boulder-resources-mineral-sands-metal-tiger-mining-indaba-28980.html FROM THE BROKING DESK


We want to highlight some great exploration results from Great Boulder Resources (ASX:GBR: A$0.70 : US$37m). Some of you may remember that this company’s CEO, Stefan Murphy, worked with us here in London and in Perth before taking up his position with GBR just over a year ago. The stock tripled on the announcement of the results, which confirmed potentially economic mineralisation over significant widths in at least four of the nine scout RC holes drilled at the Mt Venn prospect, which is located on the company’s Yamana Project, in which it is earning a 75% interest in return for spending A$2m over five years.


The project is located on the Yamana Belt, east of Laverton, in WA. It benefits from being 25km from the Gruyere Gold Project that is being developed by Gold Fields and Gold Road. Highlights from the results included 48m grading 0.75% Cu, 0.20% Ni and 0.07% Co, and 61m grading 0.50% Cu, 0.15% Ni and 0.05% Co. The holes confirm the presence of copper, nickel and cobalt mineralisation alongside the pyrrhotite that is responsible for much of the extensive EM and magnetic anomalies at the Mt Venn prospect. We await further news with interest.


Elsewhere, a few general reminders. We’ve put out a couple of reports over the last few weeks. First, Jim Taylor released Mineral Sands — Shifting Up A Gear, October 2017. This 76-pager looks closely at the mineral sands space, a small — but significant — part of the mining sector. Over the past 18 months the industry has moved through an inflexion point, creating an extremely favourable outlook. In the piece we have full reports on six companies: Iluka Resources, Base Resources*†, Kenmare Resources, Mineral Deposits, MZI Resources and Sheffield Resources.


This was followed by Jim’s initiation piece Metal Tiger (LON:MTR) *† — Earning its Stripes, 9 November 2017. Metal Tiger plc (MTR) is an AIM-quoted company that owns a portfolio of direct and listed minerals investments. Its main asset is a 30% interest in the Kalahari Copper JV, which it owns together with the ASX-listed MOD Resources. We started coverage with a Buy rating and a target price of 3.6p. We’re marketing MTR’s CEO Michael McNeilly in London on Tuesday and Thursday this week. Please let us know quickly if you’d like a meeting.


Finally, we’re partnering with Mining Indaba in its launch of the Junior Mining Showcase in Cape Town over 5-8 February 2018. The showcase will be a dedicated, deal-making zone with restricted access. It will group over 60 junior miners in one place.
 

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Mon, 13 Nov 2017 11:51:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28980/in-the-news-great-boulder-resources-mineral-sands-metal-tiger-mining-indaba-28980.html
In The News - Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28967/in-the-news-metal-tiger-28967.html Jim Taylor released a new initiation piece yesterday: Metal Tiger (LON:MTR)*† — Earning its Stripes, 9 November 2017. Metal Tiger plc (MTR) is an AIM-quoted company that owns a portfolio of direct and listed minerals investments. Its main asset is a 30% interest in the Kalahari Copper JV, which it owns together with the ASX-listed MOD Resources. Within this, the Copper-Silver T3 Project is currently the subject of pre-feasibility study (PFS) work towards the development of an open-pit copper mine, with the study expected by the end of year It also owns a portfolio of other direct minerals interests, including a lead-zinc-silver project in Thailand, and a significant portfolio of cash and shares.

We started coverage with a Buy rating and a target price of 3.6p. Our target price (TP) indicates more than 50% upside from current levels. At June 2017, 45% of the company’s market cap was accounted for by cash and shares. Our TP is based on the risked NPV10 of the T3 Project assuming a copper price of US$2.72/lb (US$5,995/t). We note that a 10% increase in the assumed copper price to US$3.00/lb (US$6,612/t) increases our TP by 19% to 4.3p.

By lucky coincidence, we’re marketing the company’s CEO, Michael McNeilly, on two days next week: Tuesday 14 and Thursday 16 November. Interest in this is proving to be high, so please let us know quickly if you’d like a meeting.

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Fri, 10 Nov 2017 09:17:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28967/in-the-news-metal-tiger-28967.html
In The News - Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28950/in-the-news-metal-tiger-28950.html FROM THE BROKING DESK


We are marketing Michael McNeilly, the CEO of Metal Tiger*† (LON:MTR), in London on two days this month: Tuesday 14 and Thursday 16. Metal Tiger is an AIM-quoted investment company whose main asset is a 30% stake in a JV in Botswana on the Kalahari Copper Belt, with the remaining 70% owned by ASX-listed MOD Resources (MOD AU). Within this, the Copper-Silver T3 Project is currently the subject of pre-feasibility study (PFS) work towards the development of an open-pit copper mine, with the study expected early next year.


T3 has a current JORC-compliant resource estimate, updated last August, of 36.0Mt @ 1.14% Cu and 12.8 g/t Ag, containing 409,000t copper and 14.8Moz silver. A potential major strike extension to the deposit was released in early October, which highlighted that the intersection of visible copper mineralisation has extended by 300m to the west and north-east of the planned pit to 1.5km along-strike. Seven rigs are now operating on-site. The throughput of the project being considered in the PFS is to be increased by 25% (from 2.0Mtpa to 2.5Mtpa). Confidence in an increased mining inventory and an improved copper price have led to the consideration of a larger project, which will be designed to allow for an expansion to 4.0Mtpa should further additions to resources justify it. Other study work, including metallurgical test-work, water bore testing, environmental approvals and stakeholder engagement, is also underway.


Metal Tiger is also active in Thailand, with a 72% interest in an entity that has a pipeline of multi-commodity exploration projects. The main focus here is a number of brownfield silver-lead-zinc mines in the Kanchanaburi Province in western Thailand. MTR is looking to have the assets designated as a government-approved ‘Minerals Development Area’. This change of status should ease the path back into production. While the assets are fairly small, they are high-grade and a recent CPR valued them at around US$40m.


The group has a host of other investments. These include a 6.6% stake in Kingsgate (KCN AU), whose focus is the Chatree Gold Project in Thailand, and an interest in Logrosan Minerals, which has a portfolio of tungsten and gold assets in Spain and Finland.


Metal Tiger has a market cap of £24m, with cash of around £4m and £6.4m in shareholdings. We’re expecting interest to be high in seeing the company, so please let us know quickly if you’d like a meeting.

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Tue, 07 Nov 2017 11:40:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28950/in-the-news-metal-tiger-28950.html
In The News - KEFI Minerals & the Mineral Sands Sector http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28924/in-the-news-kefi-minerals-the-mineral-sands-sector-28924.html FROM THE BROKING DESK
As hinted at earlier this week, Jim Taylor has put out KEFI Minerals (LON:KEFI)  — Tulu Kapi Development Update, 1 November 2017. KEFI is now set to develop the Tulu Kapi Gold Project in Ethiopia with a throughput 25% above that used in the updated DFS of May 2017. This will raise average production over the first three years of the project’s life from 115,000oz pa to 144,000oz pa and increase the flexibility to switch between selective and bulk mining.


We reiterated our Buy rating and revised our target price down from 9.0p to 8.0p. We adjusted our model to reflect the current finance structure. We’ve assumed that the company will raise US$25m in equity at a price of £0.05/share, resulting in the issuance of 383m shares, equivalent to 115% of the outstanding share capital.


Jim really has been busy — he released this last week: Mineral Sands — Shifting Up A Gear, October 2017. This 76-page tome has a detailed looked at the mineral sands space, a small — but significant — part of the mining sector. Over the past 18 months the industry has moved through an inflexion point, creating an extremely favourable outlook. Product prices have risen, reflecting stronger housing and construction markets, particularly in developing regions, robust demand for paints and plastics and positive end markets for zircon.


Further positive factors include the draw-down of previously-built inventories, production outages and some capacity cutbacks in China. The space is also benefiting from industry consolidation and producer supply discipline. The medium- and longer-term outlooks for prices of both titanium feedstock and zircon are positive, with robust demand expected and limited new supply on the horizon. In the piece we have full reports on six companies: Iluka Resources, Base Resources*†, Kenmare Resources, Mineral Deposits, MZI Resources and Sheffield Resources

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Thu, 02 Nov 2017 10:43:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28924/in-the-news-kefi-minerals-the-mineral-sands-sector-28924.html
In the News - Amani Gold & KEFI Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28908/in-the-news-amani-gold-kefi-minerals-28908.html FROM THE BROKING DESK


Amani Gold†† has announced its September 2017 Quarterly Activities and Cashflow reports. Much of the Activities Report summarises previously-announced plans for further exploration around its DRC-based Giro Gold Project, including up to 30,000m of RC and diamond drilling at Kebigada, 6,345m of RC drilling at Douze Match, and additional drill programmes planned for newly-defined target areas. With progress in place, management has now announced that the first 3,645m of drilling at Douze Match is to be completed in the December 2017 quarter. First results of that programme had been expected by the end of October, but management has reiterated that it still intends to publish a maiden resource on Douze Match in 1Q18, indicating that it is still on track to meet this milestone.


Drilling at Kebigada is still expected to be completed in 1H18, though it has yet to commence. This will start once Amani has complete access to the area of drilling. The company is currently working with the Governor of the Haut Uele Province to relocate illegal, artisanal miners, as well as the illegally-established Giro village set up to support artisanal mining in the area. The initial stages of the relocation are expected to be completed within two months, at which point the infill drilling can commence. Amani expects to progress its drilling programmes at Adoku and in the immediate area surrounding Kebigada in the current quarter.


Amani had previously paid US$250,000 for the exclusive right to negotiate an interest in the Tendao Project, which borders its Giro Gold Project. The company has now ceased due diligence activity while a DRC state-owned mining company and the present licence holder resolve contractual issues. Amani may reengage if clear commercial and legal structures can be established.


Amani’s Cashflow Report shows the receipt of A$15m as part of the previously-announced Luck Winner transaction. It also shows spending of A$4m on exploration, with a balance of A$11m at the end of the September 2017 quarter. Management has budgeted for A$5m of additional exploration in the December 2017 quarter. Still outstanding is Stage 2 of the Luck Winner transaction, under which, subject to shareholder approval, Amani will receive A$10m in exchange for 200m shares and 250m options exercisable at A$0.07/share for two years.


COMPANIES


KEFI MINERALS
LON:KEFI, | 4.5p | US$20m | Buy | TP : Under Review


Projections for Expanded Production
KEFI Minerals has announced projections for expanded production from its Tulu Kapi Gold Project in Ethiopia. This follows an announcement on 6 October in which the company said that it is now planning to build a plant with a capacity of 1.9-2.1Mtpa, 25% larger than previously envisaged. The additional capex required for the plant and infrastructure associated with this is estimated at US$12m, although the company noted that this has been offset by expected capex savings related to a move from a fixed-price, lump sum project construction to an open book, cost-based arrangement with incentivisation based on target costs and schedule. The company also stated that it will be further offset by Oryx offering to expand its facility from US$135m to US$140m. The larger throughput enhances the project’s flexibility to switch between bulk mining and selective mining as appropriate.


Oryx Management is continuing to work towards closing the funding package this year and has submitted a draft financing agreement to the Ethiopian authorities for approval. Oryx expects to raise US$140m towards the project’s financing requirement and the government has agreed to fund offsite infrastructure to a maximum of US$20m, for a total of US$160m. With respect to the residual capital requirement, KEFI has previously stated that it is considering offering third parties a stake in the project. It commented that it is in discussions with a number of potential project-level investors and that it will now bring these discussions to a head.


COMMENT: As a result of the increased throughput, gold production during the project’s first three years of operation is planned to increase from 115,000oz pa to 144,000oz. Forecast all-in sustaining costs (AISC) are planned to be slightly lower than previous estimates at US$773/oz. The announcement stated that the post-tax NP

V8 of the project, assuming a gold price of US$1,250/oz, decreased by 24% compared to the updated DFS of May 2017 (US$97m to US$74m).
We expect to update our valuation and target price as a result of this announcement and will provide a more complete commentary later. Our previous target price of 9.0p was based on a risked SoTP NAV for the company and assumed a gold price of US$1,250/oz and a 0.75x P/NAV8 multiple for the Tulu Kapi Project. It also reflected allowances for the underground potential at Tulu Kapi, other exploration assets and G&A costs. To view our previous report on the company, please click here.

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Tue, 31 Oct 2017 13:08:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28908/in-the-news-amani-gold-kefi-minerals-28908.html
In The News - Weatherly International & Metminco http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28901/in-the-news-weatherly-international-metminco-28901.html FROM THE BROKING DESK


Weatherly International*† has announced the rescheduling of repayments to Orion. The first two repayments under Facility B have been pushed back by two months each, with the remaining terms unchanged. The payments under Facilities C & D have been deferred by four months. The current combined payment schedule includes US$21.8m on 31 December 2017, US$9.7m on 31 January 2018 and US$9.7m on 28 February 2018. Weatherly and Orion have also agreed that future missed interest payments will no longer be capitalised and added to the principal, but will instead be due at the same time as the principal. Any unpaid interest will accrue at LIBOR +12%. This stands in contrast to LIBOR +2% for the Orion facility announced in July.
The current total of US$41.2m owing from 31 December 2017 to 28 February 2018 compares to US$3.5m of operating cashflow for the six months ended 31 December 2016. Over these six months the average sales price and C1 costs were US$4,916/t and US$4,603/t, respectively. Prices and costs have both since risen, with hedging expected to provide a realised sales price of ~US$6,050/t in the December 2017 quarter, while C1 costs increased to US$6,344/t and US$5,402/t in the June 2017 and September 2017 quarters, respectively.
The company continues to manage its cashflow with hedges on the price of copper. The company appears to be fully hedged for the December 2017 quarter, with 4,650t hedged between US$6,000-6,077/t, and a further 2,100t under options to Orion to purchase at US$6,000/t. The combined 6,750t under hedging and options for the December 2017 quarter compares to production in June 2017 and September 2017 of 6,344t and 5,402t, respectively.

COMPANIES


Metminco*†


ASX:MNC | A¢5.6 | US$5m | Speculative Buy


Feasibility Study Confirms Miraflores as a Robust Project
Metminco has announced a detailed summary of the feasibility study into the development of the Miraflores Gold Project in Colombia. This follows the announcement two weeks ago of a maiden reserve at the project, which also included the main findings of the study. The reserve included 4.3Mt of ore grading 3.29 g/t Au and 2.57 g/t Ag, containing 456,000oz Au and 357,000oz Ag. The feasibility study showed production of 45,000oz pa Au and 23,000oz pa Ag over a mine life of 9.5 years. At a US$1,300/oz Au price, the after-tax NPV8% was US$72m, with an IRR of 25%.
COMMENT: The feasibility study announcement provides a detailed summary of the project. Earlier in 3Q17 the company received approvals to complete up to 2,000m of underground development, and it is currently evaluating options to finance this work. The company is also advancing the Environmental Impact Assessment, the approval of which is required prior to the main project development. Metminco aims to commence front-end engineering design (FEED) studies in March and to have them completed around mid-2018. Miraflores appears to be a robust project that more than supports the current market cap of just US$5m. We continue to recommend Metminco as a Speculative Buy.

Miraflores is 100%-owned, subject to up to A$13m of deferred acquisition payments — Metminco acquired Miraflores from RMB in May 2016. A total of A$6m of deferred cash payments remain outstanding over the coming three years: A$1m in June 2018, A$3m in 2019 and A$2m in 2020. The last two of these payments would be triggered earlier by a production decision, meaning that — if the project progresses as expected — the company could be obligated to pay the full A$6m around the middle of next year. A royalty of up to A$7m is also payable from project cashflow.
Feasibility study delivered an NPV8% of US$72m and an IRR of 25% at US$1,300/oz — The results of the study were announced in October 2017. Reserves were 4.3Mt of ore grading 3.29 g/t Au and 2.57 g/t Ag for a contained 456,000oz Au and 357,000oz Ag. Underground mining using longhole stoping with backfill was planned in conjunction with a gravity concentration, flotation and cyanidation processing route. The feasibility study showed production of 45,000oz pa Au and 23,000oz pa Ag over a mine life of 9.5 years. At a US$1,300/oz Au price, the after-tax NPV8% was US$72m, with an IRR of 25%.
Permitting and associated approvals key to timeline — The EIA approval process includes approval of the feasibility study and the completed environmental baseline studies, the approved development plan and the Social and Environmental Management Plan (particularly focused on the relocation of up to 70 homes and a number of illegal miners). It also incorporates the process of consultation and assessment of the impact of the project that forms the project’s Social Licence. The project’s design includes underground mining and dry stacked tailings, limiting its surface footprint, a factor that is hoped to help speed the EIA approval process.

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Mon, 30 Oct 2017 11:14:00 +0000 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28901/in-the-news-weatherly-international-metminco-28901.html
In the news: Barrick Gold/Tanzania & Peak Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28856/in-the-news-barrick-goldtanzania-peak-resources-28856.html FROM THE BROKING DESK

The news that Barrick Gold (TSE:ABX) had come to a settlement with the Tanzanian Government was taken very well by the market; shares in Acacia Mining rose over 35%. The settlement Barrick has struck will see the Tanzanian Government take a 16% stake in three gold mines operated by Acacia, an as yet undefined 50/50 split of economic benefits and a one-off payment of US$300m. The deal will need to be approved by both the shareholders and directors of Acacia, but it is effectively a Barrick subsidiary, with the Canadian gold miner owning 63.9% of the company and having two of the seven board seats.

Problems started when the Tanzanian Government banned the export of unprocessed minerals and enacted laws to increase state ownership of mines. This seriously shook investor confidence in the country and threatened a number of mining projects. While the deal looks quite exacting, it should be remembered that just four months ago Acacia was being asked to pay a whopping US$190bn in unpaid taxes. Tanzania is Africa’s fourth largest gold producer, and Acacia is the largest gold miner in the country. It is expected that a slew of similar deals will now be struck across the industry.

A company that we keep a close eye on in Tanzania is Peak Resources (ASX:PEK) ††, which is developing the Ngualla Nd/Pr Project. Peak got a lot of interest from investors at our recent Mobility Metals Conference, but — unsurprisingly — the situation in Tanzania was seen as an issue. Peak has actually received good support from the government so far, with environmental permits being issued and an application for a mining licence already made. The new mining minister, Angellah Kairuki, said this week that her top priority is to improve relations with investors and grow the mining sector for the economic benefit of all. Also, late last month Chiku Galawa, the Songwe Regional Commissioner, met with Peak and made public her support for the project.

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Fri, 20 Oct 2017 11:18:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28856/in-the-news-barrick-goldtanzania-peak-resources-28856.html
In the news: Amani Gold http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28791/in-the-news-amani-gold-28791.html COMPANIES

AMANI GOLD††

ASX:ANL | A$0.029 | US$35m | Speculative Buy

Amani Kicks Off Latest Drilling Programme at Giro Gold Project

Amani Gold has announced the details of a new drilling programme that will see up to 30,000m of RC and diamond drilling at Kebigada, 6,345m of RC drilling at Douze Match, and additional drill programmes planned for newly defined target areas. Drilling at Kebigada will focus on upgrading the existing resource, with other drilling focused on adding ounces from potential satellite pits. An updated resource combined with planned metallurgical testing will form the basis of a feasibility study.

COMMENT: With this latest release, Amani has provided details of an extensive drill program. The infill drilling will upgrade the resource ahead of a feasibility study, while the addition of a higher-grade satellite pit would add meaningful value. We expect the general pace of execution to accelerate as Amani and its new partners look to advance the project to feasibility and production over a short period. The company expects that in late-October they will have the first results from Phase 1 drilling at Douze Match, and in Q1 2018 they will have completed the infill drilling programme, upgraded the mineral resource and completed a scoping study by BGRIMM leading towards feasibility studies.

Giro Gold Project background — Amani is focused on advancing its 55%-owned Giro Gold Project in the DRC. The majority of activity on the licence has focused on the Kebigada Zone, which was the basis of a maiden resource. A number of other targets, including areas of historical mining, have been outlined by soil sampling and some followed up by drilling. Most significantly, at Douze Match, in the north of the licence area, initial drilling returned some spectacular high-grade results, although follow-up drilling has so far not lived up to earlier results. After putting out a maiden resource in July 2017, the company has concentrated on upgrading and expanding the resource, as well as the metallurgical drilling needed to complete pre-feasibility and feasibility studies. In the near-term, the company has engaged the Beijing General Research Institute of Mining and Metallurgy (BGRIMM) to complete an initial scoping study at Kebigada.

RC drilling at Douze Match has already started — Drilling is focused on the Tango Shear, and is being scheduled in two phases. Phase 1 will involve 77 RC drill holes or 3,645m over a strike length of 1 km to define the orientation and continuity of the northern shear zone. Phase 2 will involve 50 holes for 2,700m targeting areas between the more widely spaced Phase 1 drill holes to ensure full coverage. First drill results are expected in late-October, while final grid spacing is expected to be 50m by 25m to deliver a maiden resource at Douze Match in Q1 2018. Operationally, Douze Match is being viewed as a source of higher grade material that will be blended with material from Kebigada to increase the head grade during processing.

There are plans to upgrade the resource at Kebigada — The current resource consists of 16.5mt of ore grading 1.5 g/t for 800koz in the Indicated category and 29.1mt of ore grading 1.4 g/t for 1,330koz in the Inferred category. Previous infill drilling to define the Indicated resource resulted in an increase in grades. Management is looking to continue this trend as they infill drill 167 RC holes for 25,000m in a 25m x 25m grid that they expect will form the basis of a Measured resource. Furthermore, a significant portion of the Inferred resource sits below 100m. To date, 29 diamond drill holes have served to define this area. Management now plans to add a further 14 holes resulting in a 50m x 50m grid to bring this deeper resource into the Indicated category. In preparation for feasibility studies, a further 3 diamond PQ/HQ holes will be drilled for metallurgical testwork, and Geotech logging will be carried out on all diamond tails. Additional holes will be drilled for hydrological studies and monitoring of water levels. This work programme will commence once Amani has complete access to the area of drilling with management expecting work to be completed in H1 2018.

Further drilling to focus area surrounding Kebigada and Adoku — High-grade soil anomalies previously resulted in targets in the immediate area surrounding Kebigada. Many of these anomalies are associated with artisanal mining or with chargeable IP anomalies. A programme of 40 shallow scout RC drill holes for 2,170m has been planned to cover selected anomalies with the goal of identifying potential satellite pits. An additional potential satellite pit, Adoku, is within 5km of Kebigada and is associated with artisanal mining that has supported a village for a number of years. Channel samples showed strong gold mineralisation, but follow-up diamond holes showed no significant mineralisation. Management believes drilling at Adoku may have been east of a fault and is planning to follow up with 12 RC holes for 1,200m.

Amani’s current market cap is A$45m/US$35m — The company has 1,566m shares outstanding, with 47m options exercisable at prices ranging from A$0.03 to A$0.10/share expiring from November 2019 to December 2020. Cash as of 30 June 2017 was A$1.1m, with the A$25m Luck Winner Investment Limited (LW) transaction closing subsequently. The terms of the binding subscription agreement with LW included 300m shares for A$10m at a price of A$0.05/share, and a commitment to provide a further A$10m subject to an Amani shareholder vote in November 2017 and other conditions precedent. As part of the deal, LW is to receive 250m options exercisable at A$0.07/share with a two-year term from the date of issue. Management expects these financings to help cover the costs of pre-feasibility and feasibility studies on the Giro Gold Project. While Amani is seeking to grow the size of the deposit to the multi-million ounce scale, there is a contingency payment that becomes payable should Amani define 3Moz in the Measured and Indicated categories at a cut-off grade of 2.5 g/t. At such a scale and cut-off grade, however, having to cover the US$5.35m payment would be a welcome development.

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Wed, 11 Oct 2017 13:56:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28791/in-the-news-amani-gold-28791.html
In the news: Base Resources & KEFI Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28770/in-the-news-base-resources-kefi-minerals-28770.html In the news: Base Resources & KEFI Minerals

 

FROM THE BROKING DESK

Base Resources (LON:BSE) *† has published an updated Resources and Reserves Statement for its 100%-owned Kwale Project in Kenya. This reflects depletion from mining that occurred over FY17 as well as the previously-announced resource update for Kwale South Dune: the effect of depletion was in line with our projections, while the resource update is pending the extension of the company’s mining licence. Currently all the South Dune area is covered by the prospecting licence SPL 173, while only a portion is covered by the mining licence SML 23. In the coming months Base will be performing economic analysis on the updated South Dune Resource, which will then form the basis of the application to the Kenyan Ministry of Mines for an extension of SML 23.

We reiterate our Buy rating and target price of A$0.49. It should be noted that the coming update to reserves may provide a 5-10% uplift to our target price from an extended mine life. To view our most recent report on the company, please see Base Resources — FY17 Financial Report, 29 August 2017.

COMPANIES

KEFI MINERALS†

LON:KEFI | 4.1p | US$18m | Buy | TP : 9.0p

Quarterly Update — More Details on Intended Project Funding

KEFI Minerals has announced a quarterly update that provides more detail on its proposed funding package for the development of its Tulu Kapi Gold Project in Ethiopia.

Oryx Management is continuing to work towards closing the funding package this year and has submitted a draft financing agreement to the Ethiopian authorities for approval. Oryx expects to raise US$140m towards the project’s financing requirement and the government has agreed to fund offsite infrastructure to a maximum of US$20m, for a total of US$160m.

COMMENT: With respect to the residual capital requirement, the company is considering offering third parties a stake in the project. It stated that it is in discussions with a number of potential project-level investors and that it will now bring these discussions to a head.

The company stated that Oryx has increased the amount of funding that it intends to secure from US$135m to US$140m and that this is part of the arrangements to allow a 25% increase in the processing plant throughput (from 1.5-1.7Mtpa to 1.9-2.1Mtpa) to be considered. The additional cost of this increase is to be offset by the move from a fixed price lump sum project construction to an open book, cost-based arrangement with incentivisation based on target costs and schedule.

We reiterate our Buy rating and target price of 9.0p. Our target price is based on a risked SoTP NAV for the company and assumes a gold price of US$1,250/oz and a 0.75x P/NAV8 multiple for the Tulu Kapi Project. It also includes allowances for the underground potential at Tulu Kapi, other exploration assets and G&A costs. While the upside to the share price implied by our target price is already substantial, it is worth noting that the current price implies a 0.37x P/NAV to our unrisked NAV8 of 11.9p. With the Ethiopian state of emergency having ended and the financing package in the process of being secured, we believe that there is a near-term re-rating opportunity. To view our most recent report on the company, please click here.

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Mon, 09 Oct 2017 11:22:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28770/in-the-news-base-resources-kefi-minerals-28770.html
In the news: Base Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28734/in-the-news-base-resources-28734.html COMPANIES

Base Resources*†

ASX:BSE LON:BSE | A$0.295 | US$172m | Buy | TP : A$0.49

36% Increase in M&I Resource Tonnage at Kwale South Dune

Base Resources has released an updated Mineral Resource Statement for the Kwale South Dune that incorporates the extensional and infill drilling previously outlined in announcements between March and May 2017. Total Resource tonnage increased 29%, with an overall increase in Contained Heavy Minerals of 13% from the addition of a large volume of material at a grade below the previous average. As the mining licence has yet to be extended to include all of the South Dune area, management has not yet updated the Reserve. In the coming months Base will perform an economic analysis to form the basis of its application to the Kenyan Ministry of Mines either to amend the existing mining licence or receive a new one.

COMMENT: The Resource update shows a significant increase in tonnage and HM contained, albeit at a lower grade. Based on our estimates, the upcoming Reserve update will extend the life of mine and provide a material economic benefit. We believe that 1.0-1.5 years of additional mine life may be added, providing an additional 5-10% of value above our current target price.

We are maintaining our Buy recommendation and A$0.49 target price, but note the additional value that the pending Reserve is likely to provide. For details on the company’s latest financial results, please see Base Resources — FY17 Financial Report, 29 August 2017.

The South Dune Measured category grew due to tonnage additions and resource upgrades — The drilling campaign in 2017 included both extension and infill drilling on South Dune. As a result, the Measured Resource tonnage increased 89%, while Indicated and Inferred Resource tonnage decreased due to upgrading by 20% and 96%, respectively. Overall grades declined from 3.5% to 3.0%, which we believe to be attributable to the new material added. The net addition to the total resource implies that the new material added has a grade of 1.6%.

We believe that the coming Reserve increase is likely to extend the life-of-mine — Grades have fallen across all Resource categories, with Measured & Indicated decreasing 0.5%. However, the increase in tonnage (+36% for M&I) has more than offset the decreased grade and resulted in a higher HM contained (+19% for M&I). This has resulted in additional material that will extend the life-of-mine if converted to Reserves. Assuming that M&I tonnage and HM contained get converted to Proven and Probable Reserves on a similar ratio as in the Resource Statement of 30 June 2016, we believe the life-of-mine may be extended by 1.0-1.5 years. We estimate that the economic impact will be positive.

Mafisini deposit has the potential to extend the mine life — Mafisini is interpreted to be a continuation of mineralisation at the South Dune, separated by a narrow, alluvial lowland. Mineralised intervals occur over a contiguous 1,240m of strike and up to 480m in width. Notable results for Mafisini include the previously reported Line 13 cross-section showing 10.5m at 4.4% HM and 12m at 4.2% HM, both from surface, compared with a grade of 3.8% HM on the South Dune reserve. Other drill hole grades appear to be broadly in line with the South Dune.

NE Sector shows longer-term potential, but has been suspended pending the resolution of access issues — Only four drill holes with mineralised intercepts were reported for the NE Sector, so the story is still developing. The company intersected a surface zone where 2 of 3 drill holes were low-grade and narrow, as well as a deeper mineralised zone sitting ~20m below surface with higher grades. Base has yet to complete most of the proposed drilling; this has been put on hold due to community issues. The company believes these arose as a result of political posturing associated with the 2017 general election in Kenya. Base intends to re-engage with the community after the election to obtain informed consent and access the target drill sites.

Target price — We are maintaining our Buy rating and target price of A$0.49. However, we estimate that the coming update to reserves may provide a 5-10% uplift from an extended mine life. Furthermore, we note that Mafisini offers additional resource potential.

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Wed, 04 Oct 2017 10:14:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28734/in-the-news-base-resources-28734.html
In the news: Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28724/in-the-news-metal-tiger-28724.html COMPANIES

Metal Tiger*†

LON:MTR | 1.8p | US$22m

Potential Major Strike Extension at the T3 Deposit at its 30%-owned Botswana Cu/Ag JV

Metal Tiger has updated the market on the results of work at the T3 Deposit at its 30%-owned Botswana Copper/Silver JV. Highlights included the intersection of visible copper mineralisation that has extended known mineralisation by 300m to the west and north-east of the planned pit to 1.5km along-strike. Drilling was also reported to have intersected vein-hosted copper mineralisation down-dip from the planned pit. Assays are awaited and drilling is ongoing, with seven rigs now operating on-site.

The announcement also stated that the throughput of the project being considered in the PFS — planned for completion by the end of 2017 — is to be increased by 25% from 2.0Mtpa to 2.5Mtpa. Confidence in an increased mining inventory and an improved copper price have led to the consideration of a larger project, which will be designed to allow for an expansion to 4.0Mtpa should further additions to resources justify it. Other study work, including metallurgical test-work, water bore testing, environmental approvals and stakeholder engagement, are also underway.

COMMENT: Metal Tiger and JV partner MOD Resources are continuing to make good progress advancing the T3 deposit, on which a robust scoping study was completed in December 2016. Since the completion of that study, resources were updated in August, showing a 17% increase in contained copper. The reported intersection of visible copper mineralisation is a reminder that exploration at T3 remains at a relatively early stage and continues to deliver results that bode well for the discovery of additional mineralisation along-strike and below the planned pit.

T3 is already an attractive project. The scoping study indicated the potential for the project to produce 22,000tpa of copper, with associated silver, at a C1 cash cost of US$1.29/lb and capex of US$135m, equivalent to a very competitive capital intensity rate of US$6,200/t. At a copper price of US$3.00/lb, the pre-tax NPV10 was US$297m and the IRR 42%. The larger scale and potential additions to the mining inventory bode well for the PFS results.

With regard to its Thai assets, the company expects that during 1Q18 the authorities will make their decision regarding the designation of the area hosting two brownfield silver/lead/zinc mines, Boh Yai and Song Toh, as Mineral Deposit Areas (MDAs). This would allow the company to progress the work towards the re-development of the two mines, which previously operated from the late 1970s until 2002. The company’s ownership structure gives it a 78% interest in the project, on which a final draft of a Competent Person’s Report produced by SRK in June 2017 estimated the NPV10 at US$46m and the IRR at 31%. The company plans to undertake an IPO of its Thai assets once the decision on the land designation has been made.

The company’s current market cap is approximately £15.3m. At the end of June it had £4.0m in cash and a portfolio of equity investments with a value of £6.4m, for an EV of £4.9m, or US$6.4m. We expect that the publication of the PFS on the T3 Project and the decision of the Thai authorities (expected early next year) could have a significant impact on the value of the company.

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Tue, 03 Oct 2017 10:34:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28724/in-the-news-metal-tiger-28724.html
In the news: Amani Gold http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28707/in-the-news-amani-gold-28707.html COMPANIES

AMANI GOLD††

ASX:ANL | A$0.025 | US$31m | Speculative Buy

Annual Results for FY17

Amani Gold has released its 2017 Annual Report. This outlined a number of near-term goals under the leadership of its new Chairman, Yu Qiumin, including the possibility of early production.

COMMENT: With the A$25m financing deal largely finalised (A$10m is subject to a shareholder vote in November 2017), the company is now well positioned to focus on a number of value-generative activities, including the preparation of pre-feasibility and feasibility studies on Kebigada, defining a resource at Douze Match in 2018, and adding ounces from prospective satellite deposits.

 

Giro Gold Project background — Amani is focused on advancing its 55%-owned Giro Gold Project in the DRC. After putting out a maiden resource in July 2017, the company has concentrated on upgrading and expanding the resource, as well as the metallurgical drilling needed to complete pre-feasibility and feasibility studies. Near-term work is to include drilling and metallurgical testing at Kebigada in preparation for the studies, further drilling at Douze Match in order to define a resource in 2018, and follow-up exploration on soil samples at Kolongoba. Drilling at Kebigada will include infill drilling to upgrade resources from the Indicated to Measured category, while recent diamond drilling has shown that there are areas of mineralisation below the depth of previous RC drilling. The most promising depth extension showed 88m at an Au grade of 2.13 g/t from 221m. At Douze Match, in the north of the licence area, initial drilling returned some spectacular high-grade results, although follow-up drilling has so far not matched these results. A programme of vertical holes at Douze Match targeting the flat-lying structures is being planned. Further exploration at Kolongoba is part of a plan to explore high-grade soil anomalies that have the potential to add satellite resources.

Amani’s current market cap is A$39m/US$31m — The company has 1,566m shares outstanding, with 47m options exercisable at prices ranging from A$0.03 to A$0.10/share expiring from November 2019 to December 2020. Cash as of 30 June 2017 was A$1.1m, with the A$25m Luck Winner Investment Limited (LW) transaction closing subsequently. The terms of the binding subscription agreement with LW included 300m shares for A$10m at a price of A$0.05/share, and a commitment to provide a further A$10m subject to an Amani shareholder vote in November 2017 and other conditions precedent. As part of the deal, LW is to receive 250m options exercisable at A$0.07/share with a two-year term from the date of issue. Management expects these financings to help cover the costs of pre-feasibility and feasibility studies on the Giro Gold Project. While Amani is seeking to grow the size of the deposit to the multi-million ounce scale, there is a contingency payment that becomes payable should Amani define 3Moz in the Measured and Indicated categories at a cut-off grade of 2.5 g/t. At such a scale and cut-off grade, however, having to cover the US$5.35m payment would be a welcome development.

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Fri, 29 Sep 2017 12:33:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28707/in-the-news-amani-gold-28707.html
In the news: KEFI Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28695/in-the-news-kefi-minerals-28695.html FROM THE BROKING DESK

KEFI Minerals†  (LON:KEFI) has published its interim 1H17 financial results. The company has signed a mandate letter and heads of terms for the US$135m financing of its Tulu Kapi Gold Project in Ethiopia, which KEFI is aiming to commence construction of this year. An updated DFS for the project was published in May 2017 that confirmed the project’s attractions, including production of 980,000oz of gold over a ten-year mine life, AISC of US$777/oz and estimated initial capital costs of US$161m.

KEFI remains committed to reducing capex and finalising its financing plan. After announcing a further reduction in planned capex in August 2017, including reducing contingency provisions, we estimate that the total project funding requirement is US$152m, with an additional US$33m required for 30 months of interest charges before project cashflows start covering debt payments. To fund the US$185m, the company plans to receive US$135m from the Oryx financing and US$20m from the Ethiopian Government to cover offsite infrastructure, with the balance of US$30m to come from other sources. The company had previously stated that US$6m had been committed by Lycopodium and Lanstead, although the Sharing Agreement with Lanstead is now expected to provide less cash than expected. As of 30 June 2017, we estimate that a further £3.3m in payments to KEFI had been planned for; however, at the current share price of 4.39p, we estimate that only £1.9m will be received. This shortfall led to a write-down in the period’s financials. The cash balance at 30 June 2017 was £1.6m.

We reiterate our Buy rating and target price of 9.0p. Our target price is based on a risked SoTP NAV for the company and assumes a gold price of US$1,250/oz and a 0.75x P/NAV8 multiple for the Tulu Kapi Project. It also includes allowances for the underground potential at Tulu Kapi, other exploration assets and G&A costs. While the upside to the share price implied by our target price is already substantial, it is worth noting that the current price implies a 0.37x P/NAV to our unrisked NAV8 of 11.9p. With the Ethiopian state of emergency having ended and the financing package in the process of being secured, we believe that there is a near-term re-rating opportunity. It should be noted though that it remains to be seen whether peace will hold in Ethiopia, and there are still details of the financing to finish; the opportunity lies in the uncertainty of these two factors being reduced. To view our most recent report on the company, please click here.

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Thu, 28 Sep 2017 11:39:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28695/in-the-news-kefi-minerals-28695.html
In the news: Wave Swell Energy, Metminco & Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28611/in-the-news-wave-swell-energy-metminco-metal-tiger-28611.html FROM THE BROKING DESK

We have been appointed to raise A$12m by Wave Swell Energy Limited***. This private Australian company is — as the name suggests — focused on wave energy. This lesser-known area of renewable energy could be the ‘third leg of the stool’, along with wind and solar power, as it relies on neither of these two for its generation. The technology used by Wave Swell Energy (WSE) converts renewable energy from ocean waves via a 1MW modular oscillating wave column unit into electricity for connection into national electricity grids. Full details on this and the company can be found here.

WSE has a Memorandum of Understanding with Hydro Tasmania to install a full-scale test unit at King Island (Bass Strait, Tasmania, Australia). This unit will complement the existing renewable energy generation units at King Island (which are solar- and wind-driven), and is designed to demonstrate the full-scale commercial viability of WSE’s UniWave™ energy converter unit. To support this, WSE has appointed RFC Ambrian to arrange a private placement of up to 2,500,000 new ordinary shares at A$4.80/share to raise a minimum of A$12m. Following the placement, WSE is anticipated to have 7.5m shares on issue and a value of A$36m.

The global wave resource represents twice the world’s current energy usage. Hawaii is a standout early-stage target market for WSE — the lowest of the low-hanging fruit. It currently draws most of its electricity from diesel generation; WSE can provide clean electricity in Hawaii at a significantly reduced cost. The company thinks that the potential Hawaiian market for wave energy is 1,800MW, or some US$2bn pa in revenue. Other diesel-reliant islands could represent a further US$10bn pa. The total global potential for wave energy is 425,000MW (12% of current global capacity), or US$120bn pa.

So, it’s a large, highly receptive target market. This market is critically underserved, and a clean renewable energy source that can compete with traditional energy sources on price is an exceptional value proposition. Moreover, WSE’s highly innovative product has well protected IP.

WSE’s technology is efficient and commercially competitive — it’s a game-changer. It’s likely to prove very attractive to industry, and has a strong, sustainable advantage in a nascent sector. This is a high-margin business with low overheads; WSE’s EBIT is at the top end of industry margins, giving it a significant competitive advantage. Finally, the management team is highly experienced, and is well respected domestically and internationally.

COMPANIES

Metminco*†

ASX:MNC | A¢4.8 | US$4m | Speculative Buy

Update on Interim Results and Underground Development Approval at Miraflores

Metminco recently published its interim results to June 2017. It also announced that it had received approval from the regional environmental agency allowing it to construct 2km of underground development at its 100%-owned Miraflores Gold Project in Colombia. This will allow access to the orebody and infill drilling ahead of a decision to construct the project.

The key timeline items remain in line with those announced at the beginning of August, namely:

• 3Q17 — Completion of Miraflores feasibility study

• October 2017 — Completion of baseline monitoring for the Environmental Licence (EIA)

• End-2017 — Submission of EIA application

The announcement also presented a mining schedule that showed life-of-mine production from the project of 416,000oz of gold over a ten-year life, with steady-state, nameplate production of 45,000oz pa.

COMMENT: Although the main development permit is not expected to be received until early 2018 and requires the completion of the feasibility study and the EIA, the granting of a permit to undertake underground development will allow the company to establish an operating presence at the site and appears to indicate growing support for the project.

The nominal annual production rate of 45,000oz referred to in the announcement is slightly lower than the 50,000oz pa targeted by the company; this is due to throughput and average head grade being around 6% lower than previously suggested.

We note that the current market cap of A$5m is slightly lower than its net cash, and also that A$6m of deferred cash payments for the acquisition of Miraflores are expected to fall due next year. Nonetheless, the upside represented by the potential value of the project does not appear to be reflected in the company’s current market price. In the mining study of September 2016, at a gold price of US$1,300/oz, Miraflores had an NPV8% of US$73m and the IRR was 26%.

We await the announcement of the results of the feasibility study — particularly operating and capital costs — with interest, along with progress towards securing the permits necessary for the main project development. Pending the results of the feasibility study, we continue to recommend Metminco as a Speculative Buy.

 

Miraflores is 100% owned, subject to up to A$13m of deferred acquisition payments — Metminco acquired Miraflores from RMB in May 2016. A total of A$6m of deferred cash payments remain outstanding over the coming three years: A$1m in June 2018, A$3m in 2019 and A$2m in 2020. The last two of these payments would be triggered earlier by a production decision, meaning that — if the project progresses as expected — the company could be obligated to pay the full A$6m around the middle of next year. A royalty of up to A$7m is also payable from project cashflow.

Miraflores scoping study of September 2016 delivered an NPV8% of US$73m and an IRR of 26% at US$1,300/oz — In September 2016 SRK completed an updated scoping study for an underground-only mining operation, with a mining schedule containing 451,000oz at a grade of 3.5 g/t. The operation was planned with steady-state production of 50,000oz pa and a nine-year mine life for total recovered gold production of 414,000oz. Underground mining using longhole stoping with backfill was planned in conjunction with a gravity concentration, flotation and cyanidation processing route. Initial capex was US$81m, while cash costs and AISC were US$555/oz and US$648/oz, respectively. At a gold price of US$1,300/oz, the NPV8% was US$73m and the IRR was 26%.

Feasibility study to be completed within the next few weeks — The company commenced a feasibility study work programme in November 2016, and this remains on track to be completed around the end of September 2017. The updated mining plan announced with the 2017 interim results showed a mining inventory of 4.3Mt grading 3.29 g/t for 457,000oz of gold, slightly higher than the previous scoping study. At planned steady-state throughput of 467,000tpa and with recoveries of 91%, the rate of production is planned to be 44,952oz pa, some 10% lower than suggested in the previous scoping study. The project is planned to recover a total of 416,000oz of gold over a planned ten-year mine life.

Permitting and associated approvals key to timeline — The company plans to submit the EIA for approval by the regional environmental authority by the end of this year. The process includes approval of the feasibility study and the Terms of Reference, and the submission of the completed environmental baseline studies, the approved development plan and the Social and Environmental Management Plan (particularly focused on the relocation of up to 70 homes and a number of illegal miners). It also incorporates the process of consultation and assessment of the impact of the project that forms the project’s Social Licence. The project’s design includes underground mining and dry stacked tailings, limiting its surface footprint, a factor that is hoped to help speed the EIA approval process.

Net cash at end of June of A$5.5m — The company had cash outflows from operations and expenditures on exploration of A$2.8m in the first six months of 2017. It received A$6.6m from the sale of its remaining 49% interest in the Los Calatos Project in Peru and a further A$1.7m from an equity issue and A$0.75m from the issuance of convertible notes, which are due to expire in May 2018. As a result, the company finished the period with A$6.3m in cash, or A$5.5m of net cash. The company had 102m shares outstanding and a further 25.3m partly-paid shares, which were issued to Lansted in January, and which we estimate would generate around A$1.1m if fully paid at today’s prices.

 

Metal Tiger*†

LON:MTR  | 1.9p | US$19m

IPO of Thai JV Postponed until 1Q18

Metal Tiger has announced that the planned IPO of its Thai-based JV, which includes interests in the potentially near-production stage Boh Yai and Song Toh silver/lead/zinc mines, has been delayed until 1Q18. The company has taken this decision as it is seeking clarification on certain aspects of the new Thai Minerals Act that came into effect in late August 2017.

A key requirement of the new act is that mining will only be allowed in areas that have been designated as being mineral-abundant with high economic value; these are known as Mineral Deposit Areas (MDA). Exploration, however, will be allowed to continue in areas outside the MDAs. Also, mining in preserved areas, or mining of preserved minerals, will be prohibited.

A draft of the areas being proposed to be designated as MDAs is expected to be submitted for approval in November 2017, with approvals expected in December. Metal Tiger expects that by 1Q18 the designation of the MDAs will have been made.

As part of the new act, the company is also working towards holding a public hearing for stakeholders (including villagers within 3km of the project, NGOs and government officials) before the end of the year, with the result to be reported to the Provincial Governor and the Director of the Department of Primary Industries and Mines for consideration.

COMMENT: The company is confident that the areas of interest to the Thai JV will be designated as MDAs, as not only is the project area a brownfield site at which operations were conducted from 1978 until 2002, but also given the economic potential.

We await further news of the results of the public hearing and designation of areas to be included in the MDAs with interest, and note that the company has stated that the value of 80% of the Thai project has a post-tax NPV10 of US$37m.

We expect that market attention will now focus on the results of the pre-feasibility study on the T3 Project in its 30%-owned Botswana copper JV, which is due to be completed by the end of the year.

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Mon, 18 Sep 2017 11:07:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28611/in-the-news-wave-swell-energy-metminco-metal-tiger-28611.html
In the news: Resolute Mining http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28597/in-the-news-resolute-mining-28597.html FROM THE BROKING DESK

A reminder that Jim Taylor released an initiation piece earlier this week: Resolute Mining (ASX:RSG) — Determined to Deliver Profitable Growth, 11 September 2017. Jim started coverage with a Buy rating and a target price of A$1.63. Resolute is an ASX-listed middle-tier gold company that could be looking to list in London at some stage. It is set for production of 300,000oz this year from operations in Africa and Australia.

Resolute is a mid-cost producer with ongoing programmes that are planned to raise capacity to 400,000oz pa in FY19. There’s also a potential development project that could increase this to 500,000oz in FY20. We believe that share price performance will be driven by the de-risking of these development programmes and the de-bottlenecking of the company’s Syama plant in Mali, where the definition of a new discovery, and plans for its integration into the plant, also offers upside.

We base our A$1.63 target price on the SotP NAV of the company. Our NPV8, at a gold price of US$1,350/oz, is US$1,036m (A$1.77/share), equivalent to a current P/NAV of 0.70x. At gold prices of US$1,250/oz and US$1,450/oz, our TPs would be A$1.25 and A$2.00 respectively.

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Fri, 15 Sep 2017 09:53:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28597/in-the-news-resolute-mining-28597.html
In the news: Mineral Sands Pricing, Base Resources & Resolute Mining http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28571/in-the-news-mineral-sands-pricing-base-resources-resolute-mining-28571.html FROM THE BROKING DESK

Some excellent news for mineral sands producers has come out. Iluka Resources has announced a 12% increase (to US$1,230/t) in its reference price for zircon for the next six months. Iluka usually only reports price increases around its quarterly reports; this interim announcement was made owing to the significance of the increase. This reflects the continuing strength in the zircon price, for which we estimate that Base Resources*† received US$800/t in FY17 (to June), and for which we currently forecast US$990/t in FY18. Zircon represents approximately 20% of Base’s (LON:BSE) revenue mix.

Jim Taylor has a new initiation piece out: Resolute Mining — Determined to Deliver Profitable Growth, 11 September 2017. (Believe me, that was quite an achievement given that our office had a new bunch of computers installed and a software upgrade over the weekend.) Jim has started coverage with a Buy rating and a target price of A$1.63. Resolute is an ASX-listed middle-tier gold company that could be looking to list in London at some stage. It is set for production of 300,000oz this year from operations in Africa and Australia.

Resolute (ASX:RSG) is a mid-cost producer with ongoing programmes that are planned to raise capacity to 400,000oz pa in FY19. There’s also a potential development project that could increase this to 500,000oz in FY20. We believe that share price performance will be driven by the de-risking of these development programmes and the de-bottlenecking of the company’s Syama plant in Mali. Also, the definition of a new discovery and the plans for its integration into Syama offers significant upside.

We base our A$1.63 target price on the SotP NAV of the company. Our NPV8, at a gold price of US$1,350/oz, is US$1,036m (A$1.77/share), equivalent to a current P/NAV of 0.70x. At gold prices of US$1,250/oz and US$1,450/oz, our TPs would be A$1.25 and A$2.00 respectively.

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Tue, 12 Sep 2017 10:09:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28571/in-the-news-mineral-sands-pricing-base-resources-resolute-mining-28571.html
In the news: Peak Resources http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28539/in-the-news-peak-resources-28539.html FROM THE BROKING DESK

Peak Resources (ASX:PEK) †† has announced a significant milestone. The company has lodged an application for a Special Mining Licence (SML) for its Ngualla Rare Earths Project in Tanzania. This follows the award of an Environmental Impact Assessment Certificate in March and the release of a definitive feasibility study in April. An SML is superior to a standard Mining Licence in that it is granted for 31 years (ie, the life of the project defined in the DFS) and is over a greater land position (more than 18km2 in this case), as opposed to ten years and 10km2.

Despite the recent changes in the Tanzanian Mining Law, the backdrop for Ngualla’s main products is continuing to improve. Neodymium and praseodymium (Nd/Pr) are key components in traction motors for electric vehicles, and have seen spectacular price gains this year; as the move towards mainstream acceptance of electric vehicles has gathered pace, prices have risen almost 110% YTD. China accounts for 90% of the world’s supply, but it is also the largest user, and on current growth projections it will be forced to be a net importer by 2023. The increase in prices led China’s National Rare Earth Office to issue a statement on 8 August to the country’s six largest rare earth groups asking them to help stabilise the market. This led to a month of flat prices, but prices have begun to rise again and they are now at a five-year high of US$78/kg.

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Wed, 06 Sep 2017 09:56:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28539/in-the-news-peak-resources-28539.html
In the news: Metal Tiger http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28518/in-the-news-metal-tiger-28518.html COMPANIES

Metal Tiger*†

LON:MTR | 2.2p | US$22m

Exploration Budget of A$10m for 30%-owned Botswana Copper/Silver Project JV

Metal Tiger has announced that the exploration budget for its 30%-owned Botswana Copper/Silver JV has been set at A$10m for the year to October 2018, the company’s share of which is A$3.0m/£1.85m.

COMMENT: This represents nearly double last year’s exploration budget for the JV and should provide a significant acceleration in the pace of exploration at the project. Work at the JV is currently focused on completing a pre-feasibility study on the T3 deposit by the end of this year, with a feasibility study currently planned to be completed by mid-2018.

The new budget will enable the company to test targets already established and to undertake geochemical and geophysical surveys over the JV licence area, at which soil and electro-magnetic anomalies cover a combined strike length of 150km.

T3 is an attractive project. The scoping study of December 2016 indicated the potential for the project to produce 22,000tpa of copper, with associated silver, at a C1 cash cost of US$1.29/lb and capex of US$135m, equivalent to a very competitive capital intensity rate of US$6,200/t. As pointed out in the latest announcement, the current copper price of US$3.08/lb represents an increase of 50% over the past year, further focusing attention on copper development opportunities.

A$10m exploration budget for Botswana Copper JV, which covers 8,000km2 area of the Kalahari Copper Belt — Expenditures include the funding of a 70-hole drill programme at the T3 deposit (announced in August) and a further 160 diamond drill holes and 40 RC holes on the 50km-long T3 Dome, with additional exploration at the 60km-long T20 Dome to the south-west. Exploration over the coming year is planned to include the following.

T3 Dome

• Funding the current T3 drilling programme, including up to 70 diamond drill holes:

o Drilling at the project re-commenced on 9 August following the approval of the Environmental Management Plan (EMP), which is valid until December 2018.

o To test for extensions at T3 to the east and west of the planned pit.

o To test the extent of Zone 3 mineralised contact 300m below the current T3 resource.

o To test for high-grade, vein-hosted copper mineralisation that could potentially support underground mining beneath the planned open pit.

o To undertake hydrological and sterilisation holes required for project studies.

o To test geophysical anomalies to the north and north-east of the T3 resource.

o Currently seeking approvals for the drilling of 14 electro-magnetic (EM) and copper soil anomalies along the dome.

o The majority of this programme is planned to be completed by the end of the year.

T20 Dome

• Airborne EM geophysical survey over a large area of the T20 Dome.

Metal Tiger owns a 30% interest in the Botswana Copper/Silver Project JV — Metal Tiger holds 30% and MOD Resources (MOD: ASX) 70% in the JV that owns exploration rights over an area of over 8,000km2, covering 150km of the western end of the Kalahari Cooper Belt in western Botswana. Metal Tiger also owns 95.5m MOD shares (5.0%) and 1.5m MOD warrants at a price of A$0.060/share (the current share price is A$0.068). Metal Tiger also has a portfolio of other minerals interests, including exploration and development assets in Thailand and exploration licences in Spain, as well as a portfolio of mining equity investments.

Robust scoping study into 22,000tpa copper operation at T3 completed in December 2016 — The pace of progress at the T3 Project has been impressive: after discovery in March 2016, a maiden resource statement was published in September 2016 and a scoping study completed in December 2016. The positive scoping study was based on the maiden resource of 350,000t copper and 14Moz of silver. It considered the development of an open-pit copper mine producing 22,000tpa of copper and 665,000oz of silver in concentrate over a mine life of over nine years. Average life-of-mine C1 cash costs were estimated to be US$1.29/lb after silver credits. Capital costs were estimated at US$135m, equivalent to US$6,200/tpa of annual capacity. At a copper price of US$3.00/lb (compared with the current price of US$3.07/lb), the pre-tax NPV10 was US$297m and the IRR 42%.

Resources increased by 17% to 409,000t of copper in August 2017 — A resource update was announced in late August 2017. Updated total resources comprised 36Mt, grading 1.1% Cu and 13 g/t Ag, increasing copper content by 17% to 409,000t and silver to 14.8Moz. Some 28% of the copper was contained within Measured resources, and a further 33% in Indicated resources.

Pre-feasibility study planned to be completed by the end of the year — The company plans to complete a pre-feasibility study by the end of the year and a feasibility study in 3Q18.

The company is well funded — Cash at the end of 2016 was £1.4m and the company raised a further £4.85m in April 2017 at 3p/share.

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Fri, 01 Sep 2017 11:54:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28518/in-the-news-metal-tiger-28518.html
In the news: Base Resources, Peak Resources & KEFI Minerals http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28488/in-the-news-base-resources-peak-resources-kefi-minerals-28488.html FROM THE BROKING DESK

Base Resources*† (LON:BSE) has released its full FY17 results. Jim Taylor has already swooped on this one, and has put out Base Resources — FY17 Financial Report, 29 August 2017. As a quick summary, the results highlighted the benefit that stronger prices have had on the company’s cashflow and net debt position. With the retirement of the Taurus Debt Facility, and with it one of the cash sweeps, the company’s cash flexibility has materially improved.

Revenue increased 28% due to both higher prices and volumes, while net debt dropped US$53m to US$99m by period end. Base continues to offer high-quality exposure to a strong market for mineral sands. We maintained our Buy rating and target price of A$0.49.

Not altogether coincidentally, we have Base MD Tim Carstens here with us in London on Thursday and Friday this week. Spots are pretty limited now, but let us know if you’d like to see or speak to Tim and we’ll try and squeeze you in.

Elsewhere, Peak Resources†† (ASX:PEK) has updated the market on optimisation work completed at its Ngualla Rare Earths Project in Tanzania. This work was done after the company released a bankable feasibility study on the project in April 2017. For those of you who don’t know the Peak story, the rare earths in question are neodymium-praseodymium oxide (NdPr), ie, the metals that are used in electric motors, making Peak an important player in the forthcoming electric car revolution.

Its release highlights that EBITDA can be improved by 20%, or US$29m, to US$174m pa. Furthermore, unit operating costs can be reduced by 5.7% to US$32.24/kg NdPr, with post-tax and royalties NPV10 and IRR increasing from US$445m and 21% to US$579m and 24%. Annual production is set to increase 16% to 2,810tpa.

Managing Director Darren Townsend said: “This is an outstanding outcome by the Peak team that drives Ngualla’s already low unit costs even lower, and delivers a large increase in operating margin, reinforcing Ngualla as the leading development project for NdPr. The more than 100% increase in NdPr prices this year, combined with these significant operating improvements, support our main focus now, which is to progress a mining licence application in order to fast track Ngualla towards production in time for the increased demand for NdPr from electric vehicles.”

It was also good to hear some more from KEFI Minerals† (LON:KEFI). This came in the form of an update on progress at its 1.0Moz Tulu Kapi Gold Project in Ethiopia. Financing plans are continuing to move ahead, with Oryx Management (which was mandated in July) compiling the documentation required for the planned US$135m bond issue that will lease finance the project’s infrastructure. The mining licence is being transferred to the joint-venture company in which KEFI will own 75-80%, and the government the remaining 20-25%. Progress was also reported towards calculating the final compensation amounts to be awarded under the resettlement plan following updated property surveys and associated data. This all bodes well for the planned completion of the financing later this year and for the commencement of construction early in 2018.

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Tue, 29 Aug 2017 11:40:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28488/in-the-news-base-resources-peak-resources-kefi-minerals-28488.html
In the news: Amani Gold http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28455/in-the-news-amani-gold-28455.html COMPANIES

AMANI GOLD††

ASX:ANL | A$0.03 | US$37m | Speculative Buy

Revised Resource Estimate

Amani Gold has announced a revision to the resource estimate at its 55%-owned Giro Gold Project in the DRC. The change comes from including low-grade samples that had previously been excluded from the modelling. At a 0.9 g/t cut-off, total contained ounces fell 7%, largely as a result of lower tonnage in the Inferred category, with grade remaining consistent. The revised total resource shows ore tonnage of 45.6Mt at an Au grade of 1.46 g/t, for contained Au of 2.14Moz.

COMMENT: With most of the decrease in the size of the resource coming from a drop in the Inferred tonnage while grades were largely unchanged, our view of the deposit has not materially shifted. While lower tonnage and contained ounces appear a little disappointing, the Inferred category is inherently less accurate. The company’s focus remains on the various drilling programmes that should upgrade and expand the resource. For further details on the company, please see: Amani Gold — Kebigada Maiden Resource of 2.3Moz, 5 July 2017.

Giro Gold Project background — Amani is focused on advancing its 55%-owned Giro Gold Project. After putting out a maiden resource in July 2017, the company has concentrated on upgrading and expanding the resource, as well as the metallurgical drilling needed to complete pre-feasibility and feasibility studies. Preparations have started for an infill drilling programme that will define Measured resources, and there are plans to commence a shallow RC drilling programme of targets showing high-grade soil anomalies that have the potential to add satellite resources. Most significantly, at Douze Match, in the north of the licence area, initial drilling returned some spectacular high-grade results, although follow-up drilling has so far not matched these results. A programme of vertical holes at Douze Match targeting the flat-lying structures is being planned. Recent diamond drilling at Kebigada has shown that there are areas of mineralisation below the depth of previous RC drilling. The most promising depth extension showed 88m at an Au grade of 2.13 g/t from 221m.

 

Amani’s current market cap is A$47m/US$37m — The company has 1,566m shares outstanding, with 52m options exercisable at prices ranging from A$0.03 to A$0.10/share expiring from November 2019 to December 2020. The company has also agreed to a binding subscription agreement with Luck Winner Investment Limited (LW), whereby LW acquired 300m shares for A$10m at a price of A$0.05/share, and committed to provide a further A$10m, subject to Amani shareholder approval and other conditions precedent. As part of the deal, LW is to receive 250m options exercisable at A$0.07/share with a two-year term from the date of issue. After cash outflows during the June quarter of A$2.3m, cash at the end of the period was A$1.1m, which excludes cash received from LW subsequently.

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Wed, 23 Aug 2017 11:38:00 +0100 http://www.proactiveinvestors.co.uk/columns/the-rfc-ambrian-metals-mining-and-oil-gas-overview/28455/in-the-news-amani-gold-28455.html