viewArcher Daniels Midland

Views from the Trading Floor -10th February 2012


Saints & Sinners
Oil & Gas

San Leon (LON:SLE) jumped 11% to 12p before lunch, on almost 5 times the average daily volume before lunch. Shares jumped after the company announced that it has successfully completed its second shale gas exploration well in Poland's Baltic Basin. The Talisman Energy operated Rogity-1 well, on the Braniewo S Concession in Poland, has been drilled to a depth of 2,788 meters. During drilling continuous gas shows were encountered over more than 500 meters of the Lower Silurian, Ordovician, and Middle Cambrian sections. Evaluation and interpretation of the core and logs is expected to take 3-4 months in preparation for continued operations later in 2012. The well was completed and cased for future operations, which could include pressure testing of the formations (DFIT test) and a possible vertical frac across several intervals. The market took the news and ran with it from the start of trading, and continued to push for most of the morning. Resistance at 13p looks to be the next area of interest here, with 16p looking to be the major headline resistance thereafter. Support looks to be around the 10.5p level now.

Aminex (LON:AEX) and Solo Oil (LON:SOLO) announced on the 7th of February that the drilling had been temporarily suspended at a depth of 2,500 metres pending further evaluation. Intermediate logging and check shot data have been evaluated and it has been decided to continue drilling. An additional target has been identified on the seismic data at a depth of approximately 2,750 metres and the well will now be deepened to test that objective. Drilling operations have restarted and it is expected that the new target will be reached within a week. Tullow Tanzania B.V. has elected not to participate in the well deepening activities which will be undertaken by Ndovu Resources Limited (Aminex) and Solo Oil. Aminex and Solo Oil will be responsible for the cost of deepening the well in proportion of their respective interests. The Ntorya-1 well is designed to test the high quality Basal Tertiary and Upper Cretaceous sands previously encountered in the Likonde-1 well, 14 kilometres to the north.  On the back of that announcement Aminex jumped 10% to 3.2p and Solo Oil jumped 8% to 0.56p as investors jumped in ahead of the new target being reached within a week.

Business as usual for the Gulf Keystone (LON:GKP) holders today, with the stock pushing another 6% to 361p before lunch and printing yet another all-time high of 375p in trading. With all this action over the last few sessions, could the market be in store for the updates on Shaikan-5 and Shaikan-6 early next week? Big brother is watching.

Bahamas Petroleum (LON:BPC) jumped 20% to 11p before lunch today, on huge volume of almost 45 million shares. One possible reason for the jump could be the anticipation of drilling results from other major players in the region, so we will be watching the news wires closely for any sniff of these potential update. If the shares can close above the strong resistance at 10.5p, the next level of very thin resistance would be 11.5p, followed by major resistance at 13p. Previous resistance that was taken out early on in the trading session today at 9.7p, could well act as a support line now.

Tower Resources (LON:TRP) tried to push forward early on, moving almost 5% better before lunch to 3.7p. It would appear that the fund raising was pretty much all done between 3 institutions and the directors, so one would hope there would not be a large amount of overhang from the short term flippers here. 4p looks to be the next major level to look for here, and for the chartist among us, they will probably be excited about the gap fill from 3.68p to 3.95p.

Caza Oil & Gas (LON:CAZA) slipped 3% to 10.75p before lunch, albeit on thin volume. Shares did enjoy a good run from 10p to just over 13p after the company issued what looked like a very positive operational update. Support looks to be around the 10.5p level, with resistance sitting around 12.5p.

Amerisur (LON:AMER) jumped 12% to 25p on decent volume of 4 million shares before I had finished my burrito. The shares have been on a good run over the last few weeks since the company issues an operations update. The market may well be getting ready for the update spoken about in the last RNS “Paraguay - Amerisur also announces the approval of two of the three new licences within the Piriti and Pilar sedimentary basins in Paraguay whose applications were announced on 19 December 2011. The third is currently under review by the Paraguayan authorities. These areas were defined on the basis of new analysis which was prompted and supported by the positive results seen in the San Pedro Aeromagnetic and Gravity studies. The approved blocks are named Las Palmas and Coronillo, have extensions of 2,400,000 and 402,000 hectares respectively. The result of the third application, Espartillar, over 2,400,000 hectares is expected to be known before the end of February 2012.”

Caspian Holdings (LON:CSH) jumped 12% to 0.48p on well over 10 times the average daily volume. The company recently raised £480,000 to fund its La Parrilla Tungsten project in Southern Spain. Looking through the recent update I found this that could be a driver behind the move today “In the meantime drilling on the extension area continues with the first hole at 211m in the mineralized section and continuing to target depth of 250m. Approximately 90m of the sections drilled to date are mineralized.

Design of the tailings production facility is also progressing and technical design is approaching finalisation.” Could holders be in store for a potential update on the design of the tailings production facility?


Angel Mining (LON:ANGM) continued to push forward in anticipation of another gold pour early next week. Shares were 5% dearer at 2.6p by the end of lunch, on decent volume for this time of the day. According to the last RNS the market should be expecting the announcement about the next gold pour by Wednesday of next week. The last few gold pours from the company have been increasing in size, if this pour shows another increase in size, could we see a retest of resistance at 3p here?

Stratex International (LON:STI) jumped 6% to 9.75p to continue its impressive run. Shares have jumped from 6.75p to its current levels, after the company issued a drilling updates that was very bullish. We currently have a BUY recommendation on the stock, with a price target of 14p. A copy of the BUY note is available on request.
Regency Mines (LON:RGM) a stock spoken about regularly here over the last few weeks, jumped another 13% to 2.7p at the mid-price by the end of lunch. Volumes have continued to increase as the stock finds its way on to more investors radars. The company has been very vocal over the last few sessions issuing a number of updates, and the company continued that form today with another two updates. The first was a positive updates from the Mambare Nickel Laterite Project that said Highlights of the assay results include continued thick intersections from Area 3 (North Ridge Infill) from holes MAM-KK-0027, MAM-KK-0028 and MAM-KK-0029, which sit along the same drill line as hole MAM-KK-0026 (35.60m at 0.99% Nickel, detailed in previous announcement). This is encouraging as it shows that mineralization in this area is not only thick, but also apparently continuous. High-grade intersections within this zone include 8.90m at 1.28% Nickel from 17.50m depth at MAM-KK-0029. The second RNS said that Two samples were provided to the Perth laboratories of Direct Nickel to ascertain indicative leaching performance using the Direct Nickel Process. These preliminary samples were taken from hole MAM-KK-0001 (9.00-10.00m, test 390) and hole MAM-KK-0004 (18.5-19.5m, test 387). Both of these holes are located in Area 2 (North Ridge Extension). Resistance at 3p looks to be the next major area of interest here.

Oxus Gold (LON:OXS) jumped 11% to 1.29p at the mid-price, albeit on very thin volume. Holders here are still waiting for an update from the company regarding the on-going court case with the Uzbek Government. Any positive update could really get these going, but until the market thinks one could be just around the corner, these could continue to yoyo on speculation.

Triple Plate Junction (LON:TPJ) dropped 14% to 4p on huge volume, after the company issued a project update that said several phases of mineralized diorite porphyries were intersected in the drill core at the Hides Creek prospect in the Morobe Joint Venture area of Papua New Guinea. A total of 3,019 meters were drilled to test parts of the prospect in five diamond holes drilled from mid-June to December 2011; holes ranged in depth from 471 meters to 801.5 meters. Mineralization encountered included pyrite, both disseminated and in veins, with locally well-developed quartz-pyrite vein stockworks containing variable molybdenite, sphalerite (zinc sulphide) and galena (lead sulphide), and rare disseminated pyrrohotite and chalcopyrite (copper sulphide). There were also traces of gold, but the drilling to date hasn't intersected economic grade mineralization. The final sentence was the one that really caught investors eyes, and they sold the stock accordingly. Support at 3.85p looks to be the major level to look for here.

African Copper (LON:ACU) continued to rally, pushing another 4% higher to 3.25p at the mid-price. Shares have been slowly creeping better, and a recent announcement of an additional $5 million loan from its controlling shareholder ZCI Limited. First line resistance looks to be around the 4p level, with previous resistance at 2.75p now looking to act as support.

Noventa (LON:NVTA) pushed 4.5% better to 18.5p, as the company started to slowly recover from the recent fall from 21p. Support at 17.5p held up well and should continue to act as a baseline support, with 20p looking to be the next resistance level to watch for.

From the trading floor

The FTSE 100 came under pressure today, slipping 50 points (-0.84%) by the US open to 5845, but the index had only traded 488 million shares by the time the US bell had sounded. The FTSE AIM All-Share was actually trading in the opposite direction to the main board, trading 0.52% higher on volumes of 1.2 billion shares, adding weight once again to the view that the small caps are coming back in favour.
Commodities Corner
Gold – ↓Trading at $1712, down $16 (-0.95%)
Silver – ↓Trading at $33.47, down 40c (-1.21%)
Copper – ↓Trading at $8547, down $128 (-1.47%)
Zinc – ↓Trading at $2098, down $25 (-1.15%)
WTI Crude – ↓Trading at $97.82 down $2.01 (-2.01%)
Brent Crude – ↓Trading at $116.91, down $1.57 (-1.32%)
Natural Gas (HH) – ↑Trading at $2.49, up 1c (+0.67%)
Any questions please don’t hesitate to contact me at [email protected]
Written by Steven Asfour, Sales Trader at Fox-Davies

Quick facts: Archer Daniels Midland

Price: 43.62 USD

Market: NYSE
Market Cap: $24.24 billion

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