Stratex International (LON:STI) – BUY*: Altintepe update
Market Cap: £6.7m; Current Price: 1.4p; Target Price: 6.8p
Due for completion in Q315
- Construction is due to be completed in August. This will be followed by pre-operational testing (cold commissioning), hot commissioning and production in Q315.
- The phase 1 excavation and engineering fill for the leach pad is complete.
- The installation of a low permeability soil liner fill and geomembrane is 40% complete and the installation of pipework and diversion channels underway.
- The ADR plant is mechanically completed and the electrical reticulation is underway. The crusher and screening sections of the plant are also mechanically complete.
- The construction of the gold room building is completed and the internal mechanical and electrical works are underway.
- The legal challenges are ongoing but have not impacted construction.
- No change to forecasts, rating or price target.
NORTHLAND CAPITAL PARTNERS VIEW: The next quarter will see Stratex International move from developer to producer with the commencement of gold production at its 45% owned Altintepe Project located in Turkey. Altintepe will provide Stratex with steady cash flow that it can redeploy on its high impact exploration projects. The construction process is progressing well and expected it to be completed in August with maiden production expected to commence in Q315. The mine will produce between 30,000oz Au and 40,000oz Au per annum once at full production. This is in line with our forecasts and we maintain our BUY rating.
Petrel Resources (LON:PET) – CORP: FY Results
Market Cap: £2.9m; Current Price: 3p
A frustrating year but prospect of progress Offshore Ireland
- Underlying operating loss reduced 18.5% to €0.4m. On top of this there was a €2.5m impairment of evaluation and exploration assets. Investment revenue reduced 78.7% to €386k and report LBT increased €2.4m to €3.0m. Cash reduced €94k to €1.3m – this included the receipt of €0.9m in respect of farm-out of exploration assets and the payment of €0.6m for exploration and evaluation assets (FY13: €0.7m).
- Offshore Ireland - Completion of the 3D seismic by Woodside Energy on the Porcupine Basin (Petrel: 15% interest) has been delayed while the Irish government completes an offshore environmental assessment. Results are expected in Q3 2015 and hence the seismic programme is likely in 2016.
- Ghana (Petrel: 30%; Clontarf Energy: 60%) – Ghanaian authorities have failed to implement court approved agreement on the disputed licence in Tano. Petrel has commenced litigation.
- Iraq – Political situation remains challenging. Petrel has interests in the Wasit province where they have a carry that will be paid for in Petrel shares when certain milestones are reached. Should the operator, Oryx, be unable to spud wells within the next four years then the agreement lapses.
NORTHLAND CAPITAL PARTNERS VIEW: A frustrating year for Petrel in its three areas of activity and the backdrop for junior oil and gas companies remains very challenging. On the plus side, the Company has cash on the balance sheet, an experienced team and a strong partner in Ireland with Woodside Energy. With the litigation in Ghana and the ongoing political chaos in Iraq, Ireland is the most likely to deliver progress first.
ValiRx Plc (LON:VAL) VAL 201 clinical trial update
Market Cap: £17.5m; Current Price: 58p
Update on Phase l/ll clinical trial for lead compound VAL201
- ValiRx announced that the trial to date has successfully demonstrated safety and tolerability and there have been no significant adverse effects.
- There are preliminary indications that the compound is demonstrating the effects that were seen in preclinical studies. Management indicated that potential efficacy was detected at the lowest doses.
- The trial is now advancing through planned dose escalation, where further safety and tolerability testing is being undertaken and efficacy will be further investigated.
- The trial is on track and proceeding according to the group’s timetable and plan.
NORTHLAND CAPITAL PARTNERS VIEW: ValiRx’s flagship programme, VAL201, continues to advance according to plan. Not only have no significant adverse effects been seen to date, but early stage efficacy is also being reported.