This morning, investors in London focused on the mining sector, digesting updates from Condor Resources (LON:CNR), which unveiled the maiden estimate on a concession at the La India project, and Afferro Mining’s (LON:AFF) sale of its stake in the Putu iron ore project to partner Severstal.
Afferro has agreed to sell its 38.5 percent interest in the Putu iron ore project in Liberia to partner Severstal, which now owns 100 percent of the project for US$115 million. Afferro will receive US$65 million on completion of the sale and can request a deferred payment of US$50 million in cash.
The funds will be used to accelerate the development Afferro’s development strategy for its wholly owned Nkout iron ore project in Cameroon and “enhance Afferro's negotiating position in attracting a strategic partner for Nkout”.
“This transaction demonstrates Afferro's ability to successfully generate significant returns for our shareholders,” said chief executive of Afferro Luis da Silva.
“With the focus and cash, Afferro will be extremely well placed to enter a new and exciting phase of growth.”
The payment that Afferro will receive form Severstal represents a hefty premium to its current market cap of £43 million.
Back to Condor, today unveiled the maiden resource estimate on the company’s wholly owned Espinito Mendoza Concession within the La India Project area in Nicaragua. The concession has a maiden mineral resource – which is compliant with the JORC standard – of 209,000 ounces of gold at 6.7 grammes per tonne (g/t).
The Espinito Mendoza estimate has increased the resources of the La India project by 20 percent to 1.255 million ounces.
A number of the veins on the Espinito Mendoza Concession are within 30 to 50 metres of each other, open along strike and to depth, which Condor said offered excellent potential to further increase the La India resource.
These veins will be a priority drill target in 2012, added Condor.
Meanwhile, sector peer Stratex International (LON:STI) has signed a heads of agreement with what it said was a “leading private Turkish financial institution and investment company” to enter into a joint venture to develop the Muratdere porphyry copper-gold project in Turkey.
The new partner will acquire 51 percent of the project for US$1.7 million subject to due diligence and has an option to increase its stake to 61 percent for US$0.5 million and 3,000 metres of diamond drilling.
If the partner company elects to fund the feasibility study, its stake in the project will increase to 70 percent.
In other news, Richland Resources (LON:RLD) has expanded its gemstone activities with the announcement of a new joint venture.
It has entered into a tanzanite joint venture agreement (JVA) with a group of Tanzanian individuals who own government mining licences for exploring and mining an area 2.5 km south of its existing mine, the firm said.
If successful, it will mean feedstock from the new area, which consists of three tenements, will be fed through the firm's existing processing and sorting plant. The area is currently believed to contain an estimated 500 metres of strike.
In oil and gas, Enegi Oil (LON:ENEG) said that it has received confirmation from Dragon Lance Management Corporation (DLMC) that it remains fully committed to the EL1070 farm-out agreement.
DLMC is currently waiting on drilling operations on the 3K-39 well to be completed and on the results of the subsequent application for a Significant Discovery Licence over the EL1070 area.
Back in August, Enegi and DLMC entered into a farm-out agreement over the development of the deep rights in EL1070.
Under the farm out agreement, DLMC has to begin a seismic programme on or before September 30 2012, provided that required environmental approvals have been received and select a drill site and spud a new well on or before September 30 2013 to test the Shoal Point lead.
Fellow oil and gas firm Gulfsands Petroleum (LON:GPX) today updated investors on its Syrian operations.
Gulfsands said the fundamental effect of the additional sanctions against the country is to preclude the group from engaging in activities, including funding activities, connected with the production, delivery or sale of crude oil from its Block 26 fields.
As a result, the directors have been advised that these restrictions constitute grounds to invoke the force majeure provisions of the production sharing contract (PSC) and Gulfsands has now given notice to the Syrian government.
The company said that based on preliminary indications, the government is prepared to accept the notice of force majeure, which means the PSC will not be terminated and its rights under the contract will be preserve.
Staying in oil and gas, Xcite Energy (LON:XEL) responded to messages from shareholders, which “expressed concern about the current share price” and requested more information from the company.
The North Sea explorer said that the changes it has made to the development programme of the Bentley field in the North Sea “provide the Company with a viable and more financially efficient solution to achieve our shared objective of commercialising the field”.
Xcite is currently waiting for a response from the DECC about the field development plan.
In the biotech sector, Silence Therapeutics (LON:SLN), which specialises in RNA interference (RNAi) therapeutics, said today that the United States Patent and Trademark Office (USPTO) has completed its re-examination of four key RNAi patents.
These patents form part of the foundational "Zamore Design Rule" patent families. Silence has exclusively licensed three "Zamore Design Rule" patent families for applications in the human healthcare field from the University of Massachusetts Medical School.
Following a review requested by an anonymous third party during 2010, the USPTO has concluded that the reissued claims are patentable and has issued Notices of Intent to Issue Reexamination Certificates.
Elsewhere in the markets, Rurelec (LON:RUR) has agreed to acquire a 50 per cent interest in Cascade Hydro, a newly formed hydroelectric power development company focused on run-of-river projects in Peru.
Rurelec has secured an option over a 32 megawatt (MW) pipeline of prospective developments, which it proposed to inject into Cascade on completion of successful final due diligence.
The initial package includes Canchayllo, a 4 MW project, which which was awarded a power purchase agreement (PPA) in the latest round of renewable energy tenders in Peru.
Meanwhile, National Milk Records (LON:NMRP) released its interim report today, saying its turnover increased 3.9 percent to £8.64 million in the six months to end September despite the “challenges which remain in the overall UK dairy market place”.
The company said that profitability for the year ended 31 March 2012 will be affected by significant investment in new projects and re-organisation cost associated with its new laboratory being built at Four Ashes in Staffordshire.
The company said the investment in Four Ashes will lead to improved service provision and reduced operating costs.
“This significant change in our business model will have a short term affect on our profitability but will result in a significant gain in the future,” said chairman Philip Kirkham.
“The outlook for NMR remains positive for future revenue and margin growth. NMR remains profitable and we continue to achieve increased turnover year on year, although we look forward to building upon this in the future.”
ECO Animal Health (LON:ECO) also released its interims today, which showed that profits from continuing operations rose to £0.44 million in the six months to end September from £0.42 million for the same period of 2010.
Net cash at period end of £8 million after spending £2 million on further drug registration work and the annual dividend.
“The second half has started well. Based on orders booked for delivery in the third quarter, total sales after nine months should be comfortably ahead of last year,” said chairman of ECO Animal Health Peter Lawrence.