W Resources (LON:WRES) – BUY*: CAA/Portalegre update
Market Cap: £21m; Current Price: 0.6p; Target Price: 1.1p
From yesterday: Licence area expanded to include the 328,621oz São Martinho Gold Project
- W Resources has signed an agreement with the Portuguese Department of Energy and Geology (DGEG) to increase the area covered by the CAA/Portalegre Gold Project by 101.7km2.
- This extension includes the prospective São Martinho Gold Project that contains a non-compliant mineral resource estimate of 328,621oz at an average grade of 1.37g/t Au based on limited historic drilling (77 holes 8,566m) and trenching.
- W Resources has acquired the project at no additional cost other than insignificant licence renewal fees and is now planning its initial exploration programme for the expanded area.
- The expanded licence area is valid until September 2018. The Company plans to advance the project with a joint venture partner to provide technical and financial input.
- No change to forecasts, rating or price target.
NORTHLAND CAPITAL PARTNERS VIEW: The expansion of the CAA/Portalegre licence area to include the non-compliant 328,621oz Au (1.37g/t Au) São Martinho Gold Project at no cost other than the minor licence renewal fees is a very positive development for W Resources. The CAA/Portalegre Gold Project now covers an area of 289.75km2 and has two prospective targets for further work. At São Martinho, historic drilling has already demonstrated the presence of significant mineralisation and W Resources’ work earlier in the year at the Assumer target defined a 9.5km long gold-in-soil anomaly that was drill tested.
Savannah Resources (LON:SAV) – CORP: Placing
Market Cap: £4.7m; Current Price: 1.9p
From yesterday: Raises £225,000 from existing shareholders
- Savannah Resources has raised £225,000 through the issue of 13,264,706 shares at a price of 1.7p per share in a placing with three existing shareholders.
- The funds will be used towards a reverse circulation (RC) drill programme at its Oman Copper-Gold Project expected to commence next week.
- Post the placing the Company will have a total issued share capital of 261,777,390.
NORTHLAND CAPITAL PARTNERS VIEW: Savannah Resources plans to use these funds towards a 1,500m drill programme to test targets at on Blocks 4 and 5. The drill programme is designed to produce a maiden JORC mineral resource estimate on Block 4 and increase its mineral resource estimate on Block 5, both significant catalysts expected before the end of the year.
Management Resources Solutions (LON:MRS) – CORP: Update
Market Cap: Suspended; Current Price: Suspended
From yesterday: Potential reverse progressing; organic growth
- Potential acquisition: MRS has signed a non-binding heads of terms for the acquisition of an earthmoving business in Australia and this is continuing subject to final approval from Westpac Bank and shareholder consent. Audit of the acquisition target and an asset valuation completed and work has commenced on legal due diligence. An AIM admission document is expected mid-November with re-admission of the shares expected thereafter.
- Contract win: Secured a four month contract worth A$5.5m for a new project in Papua New Guinea. This contract has been in negotiation since October 2014 and management had originally hoped to complete the project in FY15 (June).
- FY15 update: FY15 revenue expected to be c. A$17m (FY14: A$10.5m) with a net loss of c. A$900k (FY14: A$52k profit). This includes exceptional costs of A$2m relating to December’s IPO and the aborted reverse takeover in H2. Stripping out these costs, MRS would have reported a profit of c. A$1m, a significant improvement on FY14. Management does not intend to pay a final dividend.
NORTHLAND CAPITAL PARTNERS VIEW: The potential reverse takeover, first announced in August, is progressing with an admission document expected in mid-November and the re-admission of the shares to trading expected following the necessary vote. The core business is also demonstrating growth though still subject to problems of contract timing and MRS has started FY16 with another PNG project.