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Ariana Resources, Leni Gas & Oil, Vatukoula Gold Mines, ECR Minerals, and others feature in Fox-Davies Newsflash


Mining News

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

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

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

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

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

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

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

Oil & Gas News

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

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

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

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

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

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

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

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

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

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

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

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

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

Quick facts: Archer Daniels Midland

Price: 42.52 USD

Market: NYSE
Market Cap: $23.62 billion


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