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Range Resources reports successful well test on Morne Diablo, Trinidad - UPDATE

Sat, 28 Jan 2012 02:54:00 +1100

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Range Resources (LON:RRL, ASX:RRS) reported a successful production test of a well on the Morne Diablo concession in onshore Trinidad as it continues to ramp up production there and prepares for exploring deeper targets on the acreage.

It also reported good progress at the North Chapman Ranch and East Texas Cotton Valley projects in Texas.

By 1.35 pm, the stock was trading up 2.3 percent at 11.25 pence.

In an operations update, the company said initial production testing of the QUN118ST well at Morne Diablo has seen production at a rate of up to 102 barrels of oil per day under natural pressure from the shallow Forrest formation. It has stabilized at approximately 84 bopd.

This follows the recent successful test of QUN116ST which is currently producing 30 bopd under natural pressure. It is planned to put the well on pump to increase the production rate to around 50 bopd.

The same is planned for the QUN 117 well, which is forecast to produce upwards of 50 bopd.

Rig 2 has moved to the QUN 119 location where it is drilling nearly halfway to the planned depth of 2,400 feet, targeting the Upper Cruse and Lower Forest Sands.

Well logs from the Lower Forest interval are indicating approximately 280 ft of good oil sands, results which Range called “extremely encouraging” as indications are that the multi zone producing trends previously encountered in the QUN 117 well appear to continue.

Rig 5 will drill its first well, QUN 120, targeting the Lower Forest Sands in the coming weeks.

Rig 8 currently awaits regulatory inspection which is expected shortly and will be targeting the deeper Middle and Lower Cruse formations, whilst Rig 1 is shortly expected to receive spares that put it back into operation on Morne Diablo.

Range plans to explore the licence for deeper targets this year, following reprocessing and interpretation of the 3D seismic database, which is scheduled to be completed early or mid-February.

Old Park Lane Capital analyst Barney Gray commented on today’s news, saying Range’s completed wells on Morne Diablo are delivering production in excess of expectations. “With a total of four rigs expected to be available to the company very shortly, we anticipate that the drilling programme will accelerate significantly over the next three months,” said Gray.

Range holds three onshore licences in Trinidad: Morne Diablo, South Quarry and Beach Marcelle. Earlier this week it announced a tie-up with Leni Gas & Oil (LON:LGO) under which LGO gets an option to take a 15 per cent stake in Beach Marcelle and Range receives 50 per cent of LGO’s Goudron oilfield on the island.

On North Chapman, where Range has 25 per cent interest in the Smith No. 1 well and 20 per cent interest in subsequent wells, the Albrecht-1 well is drilling ahead just above the Anderson Formation, approximately 3,000 feet from the 14,500 feet target depth.

If productive, the formation could add significant reserves to those of the Howell Hight formation, the primary field pay at North Chapman Ranch.

Completion work continued on the Smith-2 well, which is scheduled for fracture stimulation early next month, along with first production and sales.

A successful Albrecht-1 could support a re-classification of current Possible (P3) reserves into the Probable (P2) and Proved (P1) categories, the company said.

Following on from the Albrecht-1 well, Range and joint venture partner Crest Resources have the option to continue with the development of the field with a possible four-well program in 2012.

Old Park Lane’s Gray said any reserve upgrade will significantly enhance the value of Range’s interest “at which point we believe the company will make a decision whether to participate in a further four well development programme or crystallise the value of its interest in 2012.”

On the East Texas Cotton Valley prospect, where Range holds 21.75 per cent, operator Crest Resources has received approval from the partners for fracture stimulation of the Ross 3H horizontal well.

Fraccing and testing is scheduled for the current quarter is expected to confirm commerciality of this shallow oil field.

Stratex International set for boost from drilling results, says broker

Sat, 28 Jan 2012 02:53:00 +1100

Drilling results due soon from Stratex International’s (LON: STX) Blackrock and Öksüt projects should give a boost to the explorer’s value, says broker Northland.

Results for holes 52-57 at the Öksüt project in Turkey are expected in the coming weeks along with an updated resource estimate, said Northland.

Assay results from the Blackrock project in Ethiopia are also expected during the first three months of 2012 and management believes these could define some good grades, according to Northland.

The house broker said that a call with management had given it confidence that the key exploration projects are on track to deliver encouraging results.

The development assets are also broadly on course to deliver near term cashflow towards the end of 2012 and early 2013, it added.

Öksüt currently has a resource of 222koz gold in an oxide zone and 76koz in a sulphide zone but recent exploration success suggests a likely extension to the resource, said the broker.

Centerra is Stratex’s partner in the project and has an option to increase its stake to 70% by spending a further $3 million on exploration over the next two years.

Elsewhere in Turkey, Stratex has respective joint ventures with Turkish companies NTF at Inlice and Bahar at Altintepe for gold.

It also recently signed a heads of agreement with an as-yet unnamed new partner to develop the Muratdere copper-gold project in Turkey, while there are exploration ventures with heavyweights Teck for gold and Antofagasta for copper.

The assays at 95% owned Blackrock will be the explorer's first drilling on the prospect following bonanza grades revealed by surface sampling last year.

A recent attack on tourists 40km from the Blackrock deposit has raised the issue of security close to the Eritrea border, but the company told Northland the Ethiopian military has increased its presence in the region as a result and it regards the attack as an isolated incident.

Northland has a 13.3p target price for Stratex, which consists largely of the interests based in Turkey.

It attributes a value of 2.7p currently for the East African prospects that include Blackrock and also the Afar project, where Thani-Ashanti is the partner, and also the recently acquired Silvrex acreage in West Africa.

Stratex and Thani-Ashanti are currently reviewing results from the Megenta drilling program at Afar and planning follow up drilling for this year at the project.

The upside case based on a major Afar or Blackrock discovery is 18.4p, the broker added.

Northland added its valuation will also likely to be revisited once Öksüt results are pubished as it expects them to be positive.

“Development at the Inlice and Altintepe projects is expected to lead to production sometime during 2013, subject to outcome of Bahar’s diligence and technical studies, and drilling results expected shortly from the Blackrock and Öksüt projects, are potential positive catalysts for Stratex’s share price. We reiterate our price target at 13.3p.”

IGas Energy: CBM gas is the priority despite surprise shale discovery

Sat, 28 Jan 2012 02:52:00 +1100

IGas Energy (LON:IGAS) doesn’t intend to get distracted by its surprise shale gas discovery in Cheshire.

On Thursday, the British oil and gas firm revealed an unexpected result in the Ince Marshes exploration well, south west of Warrington.

It said the find was very significant, with a shale section of at least 1,000 feet found in the well.

At target depth the well was still in the shale section, it said.

Gas indications were observed across the interval and a number of potentially prospective zones were identified. According to IGas, this area is part of the Bowland shale.

The company told Proactive Investors that coal bed methane (CBM) remains the priority despite the fact that the shale discovery may have raised a few eyebrows.

Indeed, many investors may be quick to size up the potential of the shale discovery – because of the massive Bowland shale play discovered last year by Cuadrilla Resources further north, near Blackpool.

IGas’ shale potential is no secret. The firm has highlighted the prospectivity of its acreage on a number of occasions in the past.

But the group is keeping its sights fixed firmly on the development of a coal bed methane operation, for the near term at least.

“The well was targeting coal bed seams. It just so happened to encounter shales as well,” chief financial officer Stephen Bowler told Proactive Investors.

“There is no change in emphasis in terms of the group’s objectives or what we are drilling for.”

The emphasis of the Ince Marshes well was on the coalbed, not shale rocks. It was designed to find out the thickness of the coal seams and to pinpoint their locations, Bowler explained.

The company’s focus is on CBM, he added. And at the moment it is too early tell whether the shale element of Ince Marshes will be explored or developed further. Instead Bowler says IGas needs to assess the findings of the well first.

Mainly, the emphasis will be on the Doe Green field development and establishing CBM production volumes from there, Bowler added.

At Doe Green, located between Widnes and Warrington, IGas has just completed the ‘in-coal’ phase of drilling for the DG-3 and DG-4 wells. The firm expects to start work on the production completion operations, which includes de-watering, for the two wells in the coming days.

After that the wells will be tested and indicative flow rates are expected before the end of March.

IGas now has over 3,500 feet of lateral exposure to CBM seams in three wells. The DG-2 well already gave the firm 1,000 feet of exposure. Now the DG-3 well has added 1,500 feet of exposure and the DG-4 well added 1,000 feet.

On Thursday, it said that the DG-4 well was in an area that was more faulted than it had anticipated, particularly in the deeper seams.

“Hopefully that’s an encouraging sign,” Bowler explained.

Faulted coal beds are typically more brittle and the gaps between the layers of coal are often larger.

While drilling, this makes for slower progress as the faulted coal bed is more complicated to navigate, as such wells in faulted CBM seams may have less exposure to the coal bed.

But from a production point of view it is a positive.

A potential benefit of finding CBM in faulted seams is that more gas may have been trapped within the coal bed and it may potentially be easier to extract higher volumes of gas from the seam - because the gaps in the rock are larger.

“There was more time and complexity in achieving longer lateral lengths in DG-4, due to the faulting, but that could have benefits on the other side.”

However, this rule-of-thumb has yet to be confirmed at this particular site and gas flow test results in March will be revealing.

CBM, like most other unconventional hydrocarbon plays, requires many wells to be drilled.

This is so that the coal seams can be properly mapped and gas extraction techniques can be tweaked and optimised for each particular seam.

For the uninitiated, CBM wells are drilled laterally across a coal seam to maximise the well’s exposure to the largest possible surface area of the coal seam.

Water is subsequently drained from the well, via the ‘sump’ section of the well. The dewatering process causes a change in pressure which draws gas out from the coal and causes it to flow via the well bore to surface.

This kind of development work can become capital intensive and a drain on cash resources.

This is why the recent acquisition of Star Energy was such a significant move for IGas.

It agreed to buy the onshore conventional oil firm in September in a deal worth £110 million. It brought an additional 11.1 million barrels of 2P reserves and gave the firm production in the order of over 2,000 barrels a day.

The earnings and positive cash flows from this traditional oil operation can potentially give the IGas balance sheet a degree of support, thus avoiding a constant drain of capital as the CBM development progresses in the coming years.

Star Energy has only been an official part of the IGas business for a little over 20 days, after the deal was closed in December but integration is already said to be going well.

On Thursday, IGas revealed that production, from all the group’s assets, is currently 15 per cent ahead of forecasts.

It is currently producing at a rate of 2,700 barrels a day. This daily production is mainly made up of 2,600 barrels of oil, while the rest is gas.

Around 1,500 barrels a day is currently hedged at a price of $93.4 per barrel, while the balance is currently being sold at more that US$106 a barrel.

The production revenue is helpful, Bowler added, while saying that IGas will look to strike a balance between capital spending, production revenues and its debt repayment.

“Really (the future capital requirement) will depend on how we press ahead with the overall business, and a lot of that will come down to the upcoming results from Doe Green and the encouragement we get from that.”

No doubt investors will eagerly await the pivotal Doe Green results in March, as the prospect of the UK’s full scale commercial CBM gas production operation moves closer to fruition.

In the meantime any further news on the shale gas front may also capture the imagination on AIM.

Aminex says Ntorya-1 well is approaching target depth; result due this month

Sat, 28 Jan 2012 02:50:00 +1100

The potentially high impact Ntorya 1 well is now approaching its target interval, Aminex (LON:AEX) confirmed today.

Aminex is the operator of the keenly followed well in Tanzania. It has a 56.25 per cent in the venture alongside partners Tullow Oil (LON:TLW) and Solo Oil (LON:SOLO), which have 25 and 18.75 per cent respectively.

This morning it was revealed that the well has now been drilled to a depth of 1,535 metres. Drilling is now progressing towards the target intervals, high quality Basal Tertiary and Upper Cretaceous sands, which are at believed to be between 1,800 and 1,900 metres.

Aminex says the well will reach target depth by the end of this month.

The well is estimated to have a 20 per cent chance of success. It is also estimated that a potential discovery would contain 100 million barrels of recoverable oil resources.

Ntorya 1 is being drilled in an onshore location in eastern Tanzania. It is testing an area within the Rovuma basin, which is host to several large gas discoveries offshore in deep waters.

The Ruvuma Basin has become extremely active for the oil and gas industry in recent years.

Anadarko (NYSE:APC) of the US with partner Cove Energy (LON:COV) have drilled several successful deep water gas wells offshore in the Mozambique sector of the basin. BG (LON:BG) and partner Ophir Energy (LON:OPHR) also made an offshore gas discovery in the Tanzanian sector last year.

African Eagle Resources appoints two non-exec directors to support Dutwa development

Sat, 28 Jan 2012 02:49:00 +1100

African Eagle Resources (LON:AFE) has added two non-executive directors to its board as it transforms from an explorer to mine developer.

Don Newport and Dr Christopher R. Pointon are joining the company as it develops its flagship Dutwa Nickel project in Tanzania, it announced today.

Newport, currently a non-exec director at Wolf Minerals (LON:WLFE), is a London mine finance industry expert with more than 35 years experience in the banking sector.

Dr Pointon has wide international experience in the resources industry and is a non-exec director and deputy chairman of Ruukki Group (LON:RKKI).

He led mining giant BHP Billiton's (LON:BLT) stainless steel materials division for six years, building it into one of the largest global Nickel and ferrochrome producers with annual sales exceeding US$3 billion, said African Eagle.

Chairman Euan Worthington said: "I am very pleased that the board of African Eagle has managed to attract individuals of the calibre and quality of Chris and Don to join us and we look forward to benefiting from their wealth of experience as we continue the development of our exciting Dutwa Nickel project.

"The appointment of individuals of such strength is another step in the transformation of African Eagle from an explorer to a mine developer and we look forward to a strong future."

The firm's non- executive board now consists of Don Newport and Dr Christopher Pointon, Geoffrey Cooper, Julian McIntyre and Euan Worthington.

Yesterday, the company revealed it had chosen engineering firm Lycopodium Minerals to complete the bankable feasibility study (BFS) for the Dutwa project.

And on Wednesday, it said SGS Metallurgy would be responsible for the pilot test programme - an essential component of the BFS.

Continental Coal beats its own export record, ships 30% more thermal coal in December quarter

Sat, 28 Jan 2012 02:48:00 +1100

Continental Coal (LON:COOL, ASX:CCC) subsidiary Mashala Resources has exceeded previous record exports of high quality export thermal coal through the Richards Bay Coal Terminal by more than 30% for the December 2011 quarter.

The company previously announced export sales from the Ferreira Coal Mine during the December quarter were forecast to exceed the previous quarter’s export sales of 130,995 tonnes and previous record export sales of 136,400 tonnes achieved in the June 2011 quarter.

Preliminary results for the December quarter also show unaudited revenue and earnings before interest, taxes, depreciation and amortisation have exceeded the September quarter unaudited results by over 35% and 70% respectively.

New Broad Based BEE Partner

Continental and the Sishen Iron Ore Company Community Development Trust (SIOC-cdt) are finalising the few remaining conditions precedent for Subscription and Shareholder Agreements under which SIOC-cdt has become the company’s new partner in South Africa.

SIOC-cdt is a Broad Based Black Economic Empowerment Company that holds a 3% interest in Sishen Iron Ore Company, the operator of the Sishen, Sishen South and Thabazimbi iron ore mines, Africa’s largest iron ore mining operations.

Importantly, the deal attracts an initial A$16.8 million (ZAR140 million) investment which will be used to further fund the growth and development of Continental’s thermal coal mining business in South Africa.

SIOC-cdt, which has become a 26% partner in the company's South African subsidiary, will invest a further A$9.1 million (ZAR75 million), which will satisfy the A$26.2 million (ZAR215 million) loan advances made by Continental Coal on behalf of its previous partner.

Following completion of the conditions precedent, which is expected to occur within the next two weeks, settlement will take place and the funding will be advanced to Continental.

ABSA Capital Debt Funding

Meanwhile, Continental has received committed finance from ABSA Capital for aggregate debt facilities of around US$65 million.

ABSA Capital is a division of Absa Bank, one of South Africa’s largest financial service providers and a subsidiary of Barclays Bank.

The facilities, which comprise US$35 million to fund the development costs of the Penumbra Coal Mine, have received all necessary credit approvals and all associated due diligence has been completed.

Drawdown of the funding will begin upon Continental funding up-front the balance of the project’s development costs not met from the US$35 million tranche from its existing cashflow and once it has satisfied the few remaining conditions precedent. First drawdown is scheduled for later in the current March quarter.

Laying the Foundations for Strong Growth

Continental has laid the foundations and has funding in place for substantial growth and a forecast increase in earnings.

The company has a current run of mine production of 2 million tonnes per annum of thermal coal with sales to the international export and domestic markets.

Continental also has a third coal mine currently under development that is forecast to double export thermal coal sales and group earnings in 2012.

A fourth mine Bankable Feasibility Study has been completed for the De Wittekrans Coal Project, confirming a technically and economically viable operation that is forecast again to again double export thermal coal sales and group earnings in 2013.

When in operation the project is expected to produce over 0.8 million tonnes of export sales, over 1.7 million tonnes of domestic sales, and annual earnings before interest, taxes, depreciation and amortisation in excess of US$50 million.

Continental’s goal is to achieve 7 million tonnes per annum of run of mine coal production in 2013.

Petro Matad's co-chairman Toll retires from board

Sat, 28 Jan 2012 02:42:00 +1100

Co-chairman Gordon Toll is retiring from the board of Mongolia focused Petro Matad (LON:MATD), it emerged.

Toll has retired immediately to focus on personal matters and other business interests in the mining industry, the oil firm said in a statement this morning.

Dr Janchiv Oyungerel, previously the co-chair with Toll, has now been appointed chairman.

He thanked Toll on behalf of the board and added: "He was instrumental in the formation of the company and has served with flair and distinction through its initial formation and in its early years as a public company. We wish him well for the future."

Toll said he was proud to leave the firm as an established quoted company with an international shareholder base and a core of Mongolian shareholders.

"I leave the company in capable hands as it advances its ongoing exploration of Block XX and embarks on a new phase of exploration in the promising frontiers of Blocks IV and V, including their oil shale potential," he added.

The company has sole operatorship of three PSCs with the Mongolian government. Block XX covers 10,340 sq km in the far eastern part of the country. Block IV extends over around 29,000 sq km and Block V over around 21,150 sq km. Both are in central Mongolia.

Range Resources reports successful well test on Morne Diablo, Trinidad

Sat, 28 Jan 2012 02:41:00 +1100

Range Resources (LON:RRL, ASX:RRS) reported a successful production test of a well on the Morne Diablo concession in onshore Trinidad as it continues to ramp up production there and prepares for exploring deeper targets on the acreage.

It also reported good progress at the North Chapman Ranch and East Texas Cotton Valley projects in Texas.

In an operations update, the company said initial production testing of the QUN118ST well at Morne Diablo has seen production at a rate of up to 102 barrels of oil per day under natural pressure from the shallow Forrest formation. It has stabilized at approximately 84 bopd.

This follows the recent successful test of QUN116ST which is currently producing 30 bopd under natural pressure. It is planned to put the well on pump to increase the production rate to around 50 bopd.

The same is planned for the QUN 117 well, which is forecast to produce upwards of 50 bopd.

Rig 2 has moved to the QUN 119 location where it is drilling nearly halfway to the planned depth of 2,400 feet, targeting the Upper Cruse and Lower Forest Sands.

Well logs from the Lower Forest interval are indicating approximately 280 ft of good oil sands, results which Range called “extremely encouraging” as indications are that the multi zone producing trends previously encountered in the QUN 117 well appear to continue.

Rig 5 will drill its first well, QUN 120, targeting the Lower Forest Sands in the coming weeks.

Rig 8 currently awaits regulatory inspection which is expected shortly and will be targeting the deeper Middle and Lower Cruse formations, whilst Rig 1 is shortly expected to receive spares that put it back into operation on Morne Diablo.

Range plans to explore the licence for deeper targets this year, following reprocessing and interpretation of the 3D seismic database, which is scheduled to be completed early or mid-February.

Range holds three onshore licences in Trinidad: Morne Diablo, South Quarry and Beach Marcelle. Earlier this week it announced a tie-up with Leni Gas & Oil (LON:LGO) under which LGO gets an option to take a 15 per cent stake in Beach Marcelle and Range receives 50 per cent of LGO’s Goudron oilfield on the island.

On North Chapman, where Range has 25 per cent interest in the Smith No. 1 well and 20 per cent interest in subsequent wells, the Albrecht-1 well is drilling ahead just above the Anderson Formation, approximately 3,000 feet from the 14,500 feet target depth.

If productive, the formation could add significant reserves to those of the Howell Hight formation, the primary field pay at North Chapman Ranch.

A successful Albrecht-1 could also support a re-classification of current Possible (P3) reserves into the Probable (P2) and Proved (P1) categories.

Completion work continued on the Smith-2 well, which is scheduled for fracture stimulation early next month, along with first production and sales.

Following on from the Albrecht-1 well, Range and joint venture partner Crest Resources have the option to continue with the development of the field with a possible four-well program in 2012.

On the East Texas Cotton Valley prospect, where Range holds 21.75 per cent, operator Crest Resources has received approval from the partners for fracture stimulation of the Ross 3H horizontal well.

Fraccing and testing is scheduled for the current quarter and is expected to confirm commerciality of this shallow oil field.

Triple Plate Junction sticks with decision to reduce interest in Crater Mountain gold project

Sat, 28 Jan 2012 02:39:00 +1100

Triple Plate Junction (LON:TPJ) has received the full results from the latest drilling at the Crater Mountain gold project in Papua New Guinea, but it stands by its decision not to fund more exploration there.

While the date received from partner Gold Anomaly (ASX:GOA) is encouraging in terms of potential for the discovery of a large low-grade gold deposit, the results do not change Triple Plate’s view that they are not sufficient to justify contributing the amounts of money needed to fund the future drilling programme.

The statement comes a day after Triple announced it would reduce its stake in Crater Mountain from 20 per cent to a 10 per cent free carried interest, held together with Celtic Minerals. The reduced stake will be carried through to the completion of a bankable feasibility study.

Triple Plate will hold 8 percentage points and Celtic Minerals 2 percentage points of the carried interest.

The new drilling programme is budgeted to amount to a total in excess of AS$3.6 million to end June 2012 alone.

Triple Plate chief executive Fraser McGee said yesterday: “While we believe that the Crater Mountain project has potential to deliver real value for the company, the results so far have shown that moving to a free-carried undilutable 8 per cent interest will enable us to retain value without significant capital expenditure."

Scotgold Resources encouraged by River Vein drill results

Sat, 28 Jan 2012 02:00:00 +1100

Scotgold Resources (LON:SGZ) today said it is encouraged by results from the first two deep drill holes at the River Vein prospect near Loch Lomond in Scotland.

The River Vein is located around 5 kilometres from the Cononish Vein, which has been a key focus for the company. This area is outside the boundaries of the Loch Lomond and the Trossachs National Park.

Today’s exploration results have shown high gold grades and confirmed good silver, lead, zinc and molybdenum grades

"Scotgold is encouraged by the results of these first two deep NQ diamond holes drilled at the River Vein Prospect,” said chief executive Chris Sangster.

“They indicate the continuity of the gold vein structures with depth whilst the geochemistry of the veins encountered hold a number of similarities with the Cononish Vein with high grades of silver and significant lead, zinc and tellurium values in addition to gold.”

Sangster added: “Whilst these initial two holes were targeting the gold vein below the high grade gold rock chip samples taken in the river, they also intersected a number of the molybdenum bearing fractures with highly anomalous values."

Scotgold said that the RV01 hole encountered mineralisation 60 metres from surface with grades of 9.7 grams per tonne gold and 13.3 grams per tonne silver as well as 0.6 per cent lead and 2.1 per cent zinc. This intersection was 40 centimetres wide.

A further 52 centimetre intersection contained 3.5 grams per tonne of gold, more than 200 grams per tonne silver, 1.4 per cent lead, 100 parts per million molybdenum and 34 grams per tonne tellurium. This section was at a depth of 78 metres.

Similarly the other hole, RV02, found a 40 centimetre intersection at a depth of 70 metres. This had 4.39 grams per tonne gold, more than 200 grams per tonne silver, 1.8 per cent lead, 167 parts per million moly and 43 grams per tonne tellurium.

The company also confirmed that rock chip sampling continues to define and expand the extent of gold and molybdenum mineralization.

This work has mapped a wide extent of molybdenum-bearing fractures. While sampling on the gold vein, at surface, confirms high grade mineralization. It revealed grades from sampling at 74.58 grams per tonne gold and 20.6 grams per tonne silver.

Scotgold is still waiting to receive assay for two more holes that were drilled on the River Vein.

Potash West: assays show broad potassium intercepts at Dandaragan Trough

Fri, 27 Jan 2012 16:58:00 +1100

Potash West (ASX: PWN) has intersected over 20 metres of glauconite rich greensands in a number of locations during aircore drilling at its Dandaragan Trough Potash Project in Western Australia’s mineral-rich Mid-West region.

Assays from 18 of the 41 holes drilled in November and December 2011 have been received showing a best intersection of 22 metres at 4.12% potassium from 74 metres below surface.

Although the intersection is deep it points to the potential for higher grades in selected areas of the sequence.

Encouraging results were also encountered in another hole drilled along the southern boundary of E70/3635, with an intersection of 20 metres at 3.24% potassium from 16 metres below surface in the Poison Hill Greensand.

Located downslope from a laterite ridge, this result provides confirmation of the geological model targeting active erosional surfaces, which expose near surface mineralisation.

While laboratory assays are pending, portable XRF results and visual logging indicate that the two holes drilled in E70/3418 along the Coorow-Greenhead Road have intersected near fresh greensand from 4 metres below surface.

The intersections are notable in that they appear to contain between 60 and 70 metres of the target Poison Hill Formation. Both holes are located along the edges of a topographic high.

Potash West is in the process of negotiating access to properties on both sides of the road and will submit an application to undertake grid drilling of the area.

A zone of phosphate enrichment characterises the top and bottom of the Molecap Formation in some areas of the Dandaragan Trough.

The highest phosphate grade encountered in the recent drilling is a 2 metre intersection at 3.16% phosphorus and 2.84% potassium at the top of the unit.

Drilling is ongoing with the current program expected to be completed by the end of February.

Earlier this week Potash West announced that ongoing test work has identified a number of process options for the production of potash from its greensands resources in Western Australia.

Following testing over the past nine months the company has defined two flowsheets that have successfully produced laboratory quantities of potassium chemicals.

Potassium chemicals have the potential to be important ingredients in the production of fertilisers for domestic and international markets.

Potash West is aiming to have at least one process developed in sufficient detail to form the basis of a Scoping Study by mid-2012.

Azure Minerals’ JV partner JOGMEC increases exploration budget for El Tecolote to US$2.27m

Fri, 27 Jan 2012 16:10:00 +1100

Azure Minerals (ASX: AZS) has recommenced diamond drilling at its wholly owned El Tecolote Project in Mexico with an increased exploration budget from its joint venture partner, Japanese Government organisation Japan Oil, Gas and Metals National Corporation (JOGMEC).

Following the evaluation of positive results received to date, JOGMEC has increased its 2011-12 total budget to US$2.27 million to include an additional 1,000 metres of diamond drilling within the current stage of the El Tecolote exploration program.

Situated between the company’s San Eduardo and La Tortuga Projects, El Tecolote covers 178 square kilometres of land containing abundant evidence of base metal mineralisation with potential for both porphyry copper and skarn copper-zinc-silver deposits.

The El Tecolote Mine – which previously produced 1.4 million tonnes at 1.9% copper, 7% zinc and 47 grams per tonne silver – closed in 1984 due low commodity prices, with unmined copper and zinc mineralisation remaining around the old mine workings.

An intensive US$1.5 million exploration program has identified several new targets, including Reyna del Cobre (skarn), extensions of the El Tecolote Mine (skarn) and several nearby porphyry copper prospects, all of which will be tested by the increased 4,000 metre drilling program.

To enable this program to be completed by March, Azure has mobilised a second drill rig to site.

Azure/JOGMEC JV

JOGMEC manages Japan's stockpiling of oil, liquefied petroleum gas (LPG) and rare metals, including the construction of national LPG stockpiling bases.

Under the terms of the joint venture, JOGMEC will spend US$5 million on exploration over three years for a 51% interest in El Tecolote, and can earn an additional 19% stake by spending a further US$8 million during the following three years, which would increase the interest to 70%.

Importantly, these funds not only ramp up exploration at the highly prospective El Tecolote Project, but provide a huge vote of confidence for Azure.

Precious Metal Resources: one of the best performing IPO's of the past three months

Fri, 27 Jan 2012 15:40:00 +1100

Precious Metal Resources (ASX: PMR) has been one of the best performing IPO's in the past three months, with the company trading at a 10% premium in its two months of public life, after a successful IPO which offered 10 million shares at $0.20 to raise up to $2 million.

The company has some very interesting projects, which includes granted tenements located at Halls Peak, which is located 80 kilometres south-east of Armidale in New South Wales, and is also targeting VMS deposits.

Precious Metal Resources ultimate aim is to host a high-grade deposit of between 30,000 and 170,000 tonnes within a global exploration target of 5 to 70 million tonnes of mixed grade mineralisation.

Providing a boost to the prospectivity of the area, several geochemical and geophysical anomalies are also present that should identify further high grade, near-surface sulphides.

Halls Peak provides a compelling position

A plus for the chances of exploration success for Precious Metal Resources is the strategic location in Halls Peak, which is an inferred volcanic centre for extensive small but high grade VMS deposits.

A substantial body of exploration data has been generated over the years by the Geology Survey of New South Wales and a number of major mining companies including, BHP Billiton (ASX: BHP), MIM Ltd., The Zinc Corporation, Allstate Exploration NL, Carpentaria Exploration Co. Ltd., CRA Exploration Limited and Amoco Minerals Australia Co.

Precious Metal Resources will look to expand on this work.

General Mining Corporation in pre open pending material transaction announcement

Fri, 27 Jan 2012 15:10:00 +1100

General Mining Corporation (ASX: GMM) has been granted a trading halt by the ASX pending the release of details surrounding a proposed material transaction, with the company's shares placed in pre-open.

General Mining has not yet elaborated any further on the transaction, but the company is currently in a very interesting position and recently earned an 80% interest in the Shoemaker joint venture project, with Galaxy Resources (ASX: GXY) 20%.

The technical overview by Coffey Mining in 2010 concluded that the Shoemaker project had good potential for iron-ore mineralisation in both the bedded and taconite styles in banded iron formation and some potential for near surface direct shipping ore hematite.

General Mining also has Mongolian based thermal coal projects, in the Uvs Basin.

The halt will remain in place until the earlier of an announcement being made to the market, or the open of trade on Tuesday 31 January.

Genetic Technologies: shares soar 48% prompting ASX please explain

Fri, 27 Jan 2012 14:40:00 +1100

Genetic Technologies (ASX: GTG) has received a price and volume speeding ticket from the ASX today after the company's shares hit a $0.155 intra-day high, which is 48% higher than the closing price on Wednesday 25 January.

The company said that it not aware of any material information that has not been released to the market, which may explain the sudden investor interest, but did make the following statement in a response back to the ASX:

'... we advise that the company's chief executive officer, Dr. Paul MacLeman recently attended the J.P. Morgan Healthcare Conference in San Francisco during which presentations were made to a number of stock brokers and investment groups.

'No information was contained in these presentations that had not already been released to the market.'

Highlighting how Genetic Technologies continues to move forward, just last month the company entered an agreement with German diagnostic product developer AutoImmun Diagnostika, which has been granted non-exclusive rights to a number of Genetic’s patents covering its non-coding DNA technology.

The agreement provides AutoImmun Diagnostika non-exclusive access to Genetic’s non-coding DNA technology for its products and services.

Genetic Technologies is also in ongoing discussions with companies relating to the use of its non-coding DNA technology.

Cancer diagnostics

Genetic Technologies is using the latest technology to identify changes in DNA to either confirm a diagnosis of a specific disorder of which a person displays signs or symptoms, or to identify individuals at risk of developing a disease before any symptoms appear.

The company is aiming to establish itself as a cancer diagnostics business and the first product launched as part of this strategy is the BREVAGen™ breast cancer risk stratification test.

BREVAGen™, which was launched in the U.S. in June, is a novel genetic test panel that examines a patient's DNA to detect the absence or presence of certain common genetic variations associated with an increased risk for developing breast cancer.

The test is designed to help physicians assess aggregate breast cancer risk from these genetic markers, plus factors from a standard clinical assessment based on a patient's family and personal history, therefore giving a clearer picture of an individual woman's risk of developing breast cancer.

Gold Anomaly unearths gold 400m west of existing Resource at Crater Mountain, Papua New Guinea

Fri, 27 Jan 2012 14:10:00 +1100

Gold Anomaly (ASX: GOA) has increased the strike length of gold mineralisation at its Crater Mountain Project in Papua New Guinea to over 800 metres after a drill hole at the Nevera Prospect intersected anomalous gold throughout the entire hole.

Nevera is the most advanced of four prospects and has a 790,000 ounce Inferred gold Resource.

The hole – which was drilled at the south‐western extent of Nevera, about 400 metres southwest of the existing resource boundary – returned a best intercept of 4 metres at 0.71 grams per tonne (g/t) gold from 150 metres.

Wide zones of gold above 0.25g/t gold and copper mineralisation were intersected in the hole compared to a previous hole drilled.

This could indicate that either a different mineralising system has been encountered, or the mineralisation at Nevera continues past the previous hole and that it was drilled in an area that was either faulted away or disrupted by a diatreme.

Besides the anomalous gold mineralisation, the latest drill hole intersected anomalous copper mineralisation, with individual 2 metre samples assaying at above 0.2%, which is associated with the gold.

Base metals such as lead and zinc, which were prevalent in many of the other holes at Nevera, are markedly lower in the hole.

There were nine, 2 metre copper intersections grading above 0.15%. The copper mineralisation also occurs throughout the hole, but does seem to become more persistent with depth.

Previous exploration to the west of the recent drill hole has demonstrated copper anomalism, which Gold Anomaly plans to investigate at a later date.

Two holes are currently being drilled at Nevera. The second 1000 metre plus deep drill hole, has now reached a depth of 958 metres.

The hole is testing the porphyry intrusion identified by an earlier drill hole, some 200 metres below it.

These deep holes are intended to determine the nature and size of the porphyry, and provide information on whether it is the feeder zone responsible for the gold mineralisation defined within the shallower mixing zone.

Lindian Resources intersects up to 235.7g/t gold at Masapelid in the Philippines

Fri, 27 Jan 2012 13:30:00 +1100

Assays from Lindian Resources’ (ASX: LIN) Masapelid Project in the Philippines have recorded bonanza grade intersections from one hole completed on the Manual Vein System between No.1 Shaft and No.2 Shaft.

The diamond drill hole intersected 2 metres at 118.35 grams per tonne (g/t) gold, 105.2g/t silver, 0.86% lead and 1.16g/t zinc from 125 metres, including 1 metre at 235.7g/t gold, 156.1g/t silver with minor lead and zinc mineralisation from 126 metres.

The results further confirm the narrow but high grade nature of the Manual Vein System.

Assays received for two other holes show that eluvium along sections of the Manual Vein System prospect contain low grade gold and silver from surface.

The near surface gold-silver mineralisation in these two holes is interpreted to be a result of erosion of the Manual Vein System and related Layong and Francisco veins over time, and deposition of vein material in the eluvial profile.

Over the six months to the end of December, Lindian has focused its exploration effort on the Layab and Sabang Prospects.

The Layab Prospect has shown the greater potential for hosting high grade gold-silver mineralisation, with the prospect hosting three historically mined high grade gold-silver veins.

Initial attention at Layab has been on the Manuel Vein System due to its ease of access and well defined trend.

To date, 22 holes have been completed for 3,938.6 metres, with high grade assays obtained in 13 of the holes drilled on that vein system.

The other two veins at Layab, the Francisco and Layong Veins, have yet to be evaluated. Lindian is planning to begin exploration to assess these veins in the first half of 2012.

The Layong Vein was the main historic producing gold-silver vein system on Masapelid.

Lindian will soon begin infill drilling on the better sections of the Manual Vein System to define a maiden Resource for the Layab Prospect in 2012.

Kaboko Mining closes in on long term manganese ore offtake agreement with Chinese steel majors

Fri, 27 Jan 2012 12:50:00 +1100

Kaboko Mining (ASX: KAB), formerly Uran, has entered into agreements with major Chinese steel manufacturers for trial shipments of high grade manganese ore ahead of the finalisation of a long term offtake agreement.

The 210 tonne and 300 tonne shipments, from Kaboko’s Zambian Manganese Projects, have been loaded at the port of Beira in Mozambique and are headed to the ports of Xinganag and Xiamen in China.

The trial shipments are to be used at the respective Chinese steel manufacturers’ furnaces in China.

Kaboko has had the trial shipments of ore sampled at its storage facilities at Kabwe in Zambia, which confirms the shipments have an average grade of about 59% manganese.

The trial shipments have been sold at a price based on BHP Billiton’s (ASX: BHP) reference price (expressed in US$ per dry metric ton unit), CIF China basis.

Debt financing discussions are expected to be finalised in the current March quarter.

New Mining Equipment

The first of the new fleet of mining equipment for Kaboko’s Zambian operations has arrived following the wet season and further mine optimisation studies.

The equipment will enable the company to look to increase production at the Chowa Open Pit over the next two quarters.

Further equipment, comprising a further two articulated dump trucks, are scheduled to arrive onsite in Zambia later in the March quarter.

Finance Negotiations

Kaboko is also targeting the completion of a debt financing agreement in the March quarter.

The company has continued negotiations on structured debt financing that will be used to further advance its Zambian Manganese Projects.

Algae.Tec director Peter Hatfull increases stake with on market trade

Fri, 27 Jan 2012 12:20:00 +1100

Algae.Tec's (ASX: AEB, FWB: GZA:GR, ALGXY: US) managing director Peter Hatfull has increased his stake in the company through an on-market trade.

Hatfull purchased 45,000 shares for his super fund for a consideration of $24,750, providing an average entry price of $0.55.

Hatfull now holds 8.16 million shares in his own name (8 million of these escrowed until January 2013), along with another 1.5 million in his super fund.

The advanced renewable oil company is currently ticking off some major global milestones, and just last week a deal was signed with Shandong Kerui Group Holding to build the first biofuels and carbon capture facility in China.

In more positive news, recently Algae.Tec signed a biofuels memorandum of understanding with the European airline Lufthansa, and announced a biofuels production and carbon capture deal with the Sri Lanka subsidiary of industrial giant Holcim.

Algae.Tec has been well supported by the market, and recently completed a A$5 million placement to sophisticated investors through Patersons Securities. Algae.Tec was one of the best performing IPO's of 2011.

ECSI launches itself into Hungarian coal space

Fri, 27 Jan 2012 11:50:00 +1100

ECSI (ASX: ECS) is moving towards the acquisition of seven coal permits in Hungary with an option agreement to acquire all of the issued shares in Synclean Resources.

Synclean Resources, a wholly owned subsidiary of Synclean Energy, owns permits covering around 738 square kilometres prospective for underground coal gasification (UCG)-suitable coal seams in two different regions of Hungary.

In general, coal seams in Hungary have a comparatively low calorific value, with high ash and sulphur contents.

However, for UCG purposes, this is not an issue as ash remains in the coal seam after production and sulphur is not mobilised at the UCG process temperature.

The Hungarian Permits are located in areas of relatively good infrastructure with access to both road and rail in an area with a rich history of mining.

The permits are also located close to potential markets and well situated to take advantage of the regional pipeline network and power stations.

If ECSI chooses to exercise the option to acquire the permits, the company will have exclusive rights to explore and investigate coal seams suitable below 300 metres for UCG use.

Importantly, ECSI has access to existing data on the coal seams from more than 11,000 exploration wells drilled, which the company will use to fast track the initial site selection process.

Vesprem Permits

The Vesprem permits, comprised of Bakony-North I, Bakony-North II, Gerecse and Berhida, are located in the west of Hungary.

From analysis of historical data, the permits are known to contain resources of high grade brown coal that ECSI believes is well suited for use as part of a potential UCG operation.

The permits contain between two and four coal seams at a depth of below 300 metres. The average thickness of the seams is 2 metres, with a maximum thickness of 4 metres developed in some areas of the permit.

Mecsek Mountains Permits

The Mecsek Mountains permits are comprised of three separate permits – Volgyseg-Hegyhet, Komlodeep and Hosszuheteny West.

The permits are located in the south of Hungary, north of Pécs, the fifth largest city in Hungary with a population of 150,000 and a long history of mining.

The exploration target in Mecsek is black coal, a higher rank coal than the potential resource on the Vesprem Bakony permits.

As such, the potential black coal resource on the Mecsek Mountains permits generally has a higher calorific value.

Historical data indicates that the permits contain up to 60 separate coal seams. The coal seams attain a maximum thickness of 30 metres, although the mean seam thickness in the permit area is around 1 metre.

The coal seams in the Mecsek area are deeper than on the Vesprem Bakony permit area with depths in excess of 450 metres, 550 metres and 800 metres for Hosszuheteny, Hegyhat, and Komlo-deep respectively.

The greater depth of the seams makes the coal ideal for UCG purposes as it can exploit coal seams that are uneconomic for conventional mining.

Hungary Demand

Hungary’s domestic oil and conventional gas production falls far short of demand and the country has large coal reserves of which new exploitation by conventional mining has been banned by the government.

The country does not have energy security and is highly dependent on Russia and the Ukraine for its gas imports. Importantly, European gas prices are high.

Consideration for Coal Acquisition

Under the formal agreement with Mutual Wide Corporation, the company that is assigning ECSI the rights to the option to acquire all of the shares in Synclean subsidiary, ECSI will pay $8.1 million as a scrip consideration.

Consegna Group in A$1.5m placement to sophisticated investors to advance drug delivery technology

Fri, 27 Jan 2012 11:24:00 +1100

Consegna Group (ASX: CGP) has received a major vote of confidence in the company's operations from the market, after completing a private placement of shares and unlisted options to sophisticated investors.

The placement comprises 37.5 million shares at $0.04 to raise A$1.5 million, along with 12.5 million options with an exercise price of $0.035 before January 2013.

Consegna has already outlined that the funds will be used to develop the company’s Linguet buccal drug delivery technology, along with funding foreign licensing and overseas investment opportunities.

Linguet is a tablet or lozenge formulation technology that releases an active drug ingredient in the mouth and which facilitates absorption through the oral mucosa.

Highlighting the potential of the drug, the oral modified release delivery market was valued at $49 billion in 2009 and is estimated to double by 2016.

Consegna to start BreatheAssist commercialisation process

Consegna continues to progress commercialisation of its BreatheAssist device, and in November last year started negotiating licences. BreatheAssist is a multi-functional nasal dilation technology that enhanced nasal airflow by 37% in a clinical study.

Importantly, there are multiple licensing opportunities for BreatheAssist, including sport, medication delivery, snoring cessation, aiding sleep apnoea and the filtration of pollen and other airborne pollutants.

Consegna reaffirmed its plan recently for 2012 is to seek international licensing deals specifically for the BreatheAssist technology. The company is aiming to complete its first transaction by the June quarter of this year.

Further improved production samples of one of the variants of BreatheAssist will be available in February this year, which is expected to assist in maximising licensing negotiations.

Besides its BreathAssist technology, Consegna has also developed the Vibrovein technologies, which is a vibrating device that attaches to any syringe to substantially reduce penetration resistance. Consegna is targeting the $120 billion injectable drug market.

Shareholder Balam Global continues to increase stake

Substantial shareholder Balam Global continues to increase its exposure to Consegna, and earlier in the month purchased more shares on market to increase its stake to 15.47%.

Legacy Iron Ore appoints non-executive director

Fri, 27 Jan 2012 11:20:00 +1100

Legacy Iron Ore (ASX: LCY) has appointed Timothy Turner, who has previously been non-executive chairman, as a non-executive director.

A partner with accountants Hewitt Turner and Gelevits, Turner specialises in mergers and acquisitions, corporate and tax structuring, due diligence reporting, new ventures and business development consulting.

Turner is currently non-executive director of Cape Lambert Resources, International Petroleum and African Petroleum Corporation.

Meanwhile, Legacy is continuing to step up the pace at the Mt Bevan Iron Ore Project delivering another set of very positive results to the market.

Drilling has now consistently intersected the thick, shallowly dipping magnetite bearing banded iron formation (BIF) unit over an extensive 10 kilometre long strike.

On top of that Davis Tube Recovery (DTR) testing has again displayed high level weight recoveries and concentrate grades with low silica and negligible phosphorus and sulphur.

Using a relatively coarse grind size of P80/50 – 55 microns, DTR testing shows achievable grades of 69% to 70% iron, with high weight recoveries of circa 45%.

SRK Consulting is currently working on a JORC Inferred Resource for the whole Western BIF target, with results forecast to be delivered at the end of this month.

South Boulder Mines’ JV partner Independence Group delivers maiden nickel Resource for Rosie

Fri, 27 Jan 2012 10:50:00 +1100

South Boulder Mines’ (ASX: STB) joint venture partner Independence Group (ASX: IGO) has completed an initial JORC Resource of 1.7 million tonnes at 1.7% nickel, 0.4% copper and 1.9 grams per tonne (g/t) platinum and palladium for the Rosie deposit within the Duketon Joint Venture.

The Duketon Joint Venture is centred 120 kilometres north of Laverton in Western Australia.

The potential to grow the Resource at Rosie is increased by the fact that the initial Resource does not include the C2 mineralised zones located about 1.7 kilometres to the northwest.

The Resource occurs over a vertical depth of about 600 metres and a strike length of 1100 metres.

Mineralisation remains open along strike and at depth.

The Rosie mineralisation is of medium tenor (8-10% nickel), has a nickel/copper ratio of about 10:1 and has significant platinum and palladium credits.

The platinum tenor averages about 3g/t and is moderately variable, typically in the range of 2-6g/t. The palladium tenor averages about 3-4g/t and is more variable, typically in the range of 1-10g/t.

Analysis of platinum group elements indicates that the mineralisation may also have significant ruthenium and rhodium concentrations.

The mineralogy of the system appears to be similar to typical Kambalda-style magmatic nickel systems, with pyrrhotite, pentlandite and chalcopyrite as the dominant sulphides in the primary portion of the mineralised zone.

Three mineralised domains were modelled – a higher grade Contact domain with lower grade Footwall and Hanging Wall domains. Only the Contact domain is included in the maiden Resource.

A further phase of exploration at Duketon is scheduled to begin in February testing a number of targets.

Exploration will test the strike and depth extensions of the Rosie deposit targeting thicker, higher grade zones in the Contact mineralised domain, possible repeats of Rosie-style mineralisation between Rosie and the C2 disseminated nickel sulphide discovery 1.7 kilometres to the northwest and higher grade zones within C2.

Under the Duketon joint venture with South Boulder, Independence Group can earn a 70% interest in the nickel rights by completing a Bankable Feasibility Study within five years of the grant of the relevant tenement.

Volta Mining on the hunt for West African gold after new acquisition boosts footprint

Fri, 27 Jan 2012 10:20:00 +1100

Volta Mining (ASX: VTM) has dialled into the highly prospective area of West Africa which boasts a strong history of gold production, with a new strategic acquisition of projects in Burkina Faso and Mali.

Volta has now entered into a share purchase agreement to which the company has obtained an option to acquire up to a 100% interest in six projects, which cover more than 1230 square kilometres.

Importantly - the company already has a working knowledge of Burkina Faso through the already held Dangue Gold Project, with the new acquisition increasing Volta's West African footprint to around 1480 square kilometres.

Volta continues to move forward quickly due diligence on the acquisition, while also compiling historical exploration data, with contractors having been engaged with a view to commencing an auger drilling program.

David Sumich, managing director of Volta, commented: “Initial reconnaissance of the permit areas and analysis of historical exploration data is very encouraging. The majority of the permits lie on greenstone belts which play host to a number of large gold deposits in the region.

"A number of artisanal mines have also been identified indicating good prospectivity for gold mineralisation.”

Terms of the transaction

Volta has the option to wholly acquire Sahel Resources, a Mauritian incorporated company, and has entered into an agreement to initially acquire 85% of the shares in Sahel for a cash consideration of USD$195,000 plus 2.4 million Volta Mining shares.

If Sahel obtains the rights to become the registered owner of the two additional permits in Mali (currently still under negotiation between Sahel and the tenement vendors) then an additional 300,000 Volta mining shares will be payable to Sahel. Volta Mining retains the right to acquire the remaining 15% of Sahel at a to-be-agreed valuation.

Volta Mining new to ASX and on the move

The public history of Volta is brief, with the company only hitting the ASX boards in October 2011, after a successful IPO with offered 15 million shares at A$0.20 each, to raise up to $3 million.

At the time of listing Volta said that the company was also eyeing additional interests to complement those already held, with today's acquisition announcement highlighting how the company has already delivered on its first milestone.

Syrah Resources raises ASX eyebrows after 43% share price spike

Fri, 27 Jan 2012 10:00:00 +1100

Syrah Resources (ASX: SYR) has been creating some investor interest recently, with the company's shares rallying 43% to $0.285 intra-day on Wednesday, from just two days earlier.

The company said that it not aware of any material information that has not been released to the market, which may explain the sudden investor interest, but did make the following statement in a response back to the ASX:

'Syrah’s quarterly report outlined the recently acquired Balama Project which has the potential to be a high tonnage, high grade, coarse flaked graphite project. Balama is also highly anomalous in vanadium with sample grades up to 1.25%.

'During the quarter, Syrah completed a trenching program at Balama. Samples have been collected for despatch to Amdel Laboratories in Adelaide for assaying. In addition, metallurgical testwork is ongoing at Mintek, South Africa. Preliminary results from the metallurgical program have been encouraging. Results from both the assay and metallurgical testwork should be released before the end of the March quarter.

'Syrah is currently securing drill rigs which are expected to commence after the end of the wet season in April 2012. Drilling is anticipated to continue for the entire field season which ends around November 2012.'

Continental Coal beats its own export record, ships 30% more thermal coal in December quarter

Fri, 27 Jan 2012 09:53:00 +1100

Continental Coal (ASX: CCC) subsidiary Mashala Resources has exceeded previous record exports of high quality export thermal coal through the Richards Bay Coal Terminal by more than 30% for the December 2011 quarter.

The company previously announced export sales from the Ferreira Coal Mine during the December quarter were forecast to exceed the previous quarter’s export sales of 130,995 tonnes and previous record export sales of 136,400 tonnes achieved in the June 2011 quarter.

Preliminary results for the December quarter also show unaudited revenue and earnings before interest, taxes, depreciation and amortisation have exceeded the September quarter unaudited results by over 35% and 70% respectively.

New Broad Based BEE Partner

Continental and the Sishen Iron Ore Company Community Development Trust (SIOC-cdt) are finalising the few remaining conditions precedent for Subscription and Shareholder Agreements under which SIOC-cdt has become the company’s new partner in South Africa.

SIOC-cdt is a Broad Based Black Economic Empowerment Company that holds a 3% interest in Sishen Iron Ore Company, the operator of the Sishen, Sishen South and Thabazimbi iron ore mines, Africa’s largest iron ore mining operations.

Importantly, the deal attracts an initial A$16.8 million (ZAR140 million) investment which will be used to further fund the growth and development of Continental’s thermal coal mining business in South Africa.

SIOC-cdt, which has become a 26% partner in the company's South African subsidiary, will invest a further $A9.1 million (ZAR75 million), which will satisfy the A$26.2 million (ZAR215 million) loan advances made by Continental Coal on behalf of its previous partner.

Following completion of the conditions precedent, which is expected to occur within the next two weeks, settlement will take place and the funding will be advanced to Continental.

ABSA Capital Debt Funding

Meanwhile, Continental has received committed finance from ABSA Capital for aggregate debt facilities of around US$65 million.

ABSA Capital is a division of Absa Bank, one of South Africa’s largest financial service providers and a subsidiary of Barclays Bank.

The facilities, which comprise US$35 million to fund the development costs of the Penumbra Coal Mine, have received all necessary credit approvals and all associated due diligence has been completed.

Drawdown of the funding will begin upon Continental funding up-front the balance of the project’s development costs not met from the US$35 million tranche from its existing cashflow and once it has satisfied the few remaining conditions precedent. First drawdown is scheduled for later in the current March quarter.

Laying the Foundations for Strong Growth

Continental has laid the foundations and has funding in place for substantial growth and a forecast increase in earnings.

The company has a current run of mine production of 2 million tonnes per annum of thermal coal with sales to the international export and domestic markets.

Continental also has a third coal mine currently under development that is forecast to double export thermal coal sales and group earnings in 2012.

A fourth mine Bankable Feasibility Study has been completed confirming a technically and economically viable operation that is forecast again to again double export thermal coal sales and group earnings in 2013.

This alone has earned Continental a target price of $0.56 per share, well over double the company’s current trading price of $0.18, from a broker.

The investment dealer maintained its ‘buy’ rating on Continental and increased its price target from $0.52 after the company released the preliminary draft Bankable Feasibility Study for its De Wittekrans Coal Project.

When in operation the project is expected to produce over 0.8 million tonnes of export sales, over 1.7 million tonnes of domestic sales, and annual earnings before interest, taxes, depreciation and amortisation in excess of US$50 million.

Continental’s goal is to achieve 7 million tonnes per annum of run of mine coal production in 2013.

Oil Basins granted halt pending capital raising announcement

Fri, 27 Jan 2012 09:40:00 +1100

Explorer Oil Basins (ASX: OBL) has been granted a trading halt by the ASX pending the release of a proposed capital raising, with the company's shares placed in pre-open.

Oil Basins has not yet indicated where the potential injection of funds will be allocated, but the company is currently in a very interesting position, with a focus on the Canning Basin, Carnarvon Basin and Gippsland Basin.

Earlier in the month a report was penned by a research firm which said that Oil Basins is unusual in the junior E&P sector in that it has 2C assets (proven & probable contingent resources) of large potential value, relative to its market capitalisation.

The firm estimated a “fair and reasonable” value for the company’s assets of around $0.05 “risked”, with a highside case of $0.09 “risked”.

The halt will remain in place until the earlier of an announcement being made to the market, or the open of trade on Tuesday 31 January.

Resource Star: update on Toronto listed Cue Resources, no further interest in acquiring shares

Fri, 27 Jan 2012 09:20:00 +1100

Resource Star (ASX: RSL) has updated the market on the company's interests in the Toronto listed Cue Resources (CVE: CUE)

The company towards the end of 2011 announced that it would not proceed with plans for a strategic interest in Cue, from its major shareholder Red Rock Resources plc (LON: RRR) and Regency Mines plc (LON: RGM).

Resource Star has now advised that on 24 January 2011 Red Rock announced that it had agreed to sell all its interest in Cue Resources to Uranium Energy Corp (NYSE-AMEX:UEC), which has agreed to acquire 100% of Cue Resources for common stock via a plan of arrangement.

On completion of the sale, currently expected in late March 2012, Red Rock will receive common stock in Uranium Energy Corp with a current market value of approximately A$1.33 million.

This was an unsolicited approach by Uranium Energy Corp to Cue Resources, and one that in prevailing market conditions the Cue Board felt was in the best interests of shareholders to accept. As a result of Red Rock’s decision to accept Uranium Energy Corp’s offer, Resource Star has no further interest in acquiring shares in Cue Resources.

Blackham Resources raises $950,000 to progress Matilda gold project

Fri, 27 Jan 2012 09:00:00 +1100

Blackham Resources (ASX: BLK) we recommence trading on the ASX this morning following the release of the company's capital raising details, which comprises a placement of 4.75 million shares at $0.20 to raise $950,000 - to progress the Matilda gold project.

Matilda is highly prospective due to be hosted within a historical gold province, being in the Wiluna region of Western Australia, which importantly has some infrastructure in the area - and also hosts a resource of 10.2 million tonnes 1.8g/t for 601,000 gold ounces.

The project covers an extensive 600 square kilometres, and has experience minimal exploration over the past decade.

History on the project includes gold being first discovered in 1886, with mining activities peaking in the 1930's, with modern exploration in the 1960's more focused on nickel.

Funds will also be allocated to exploration and development of the Scaddan and Zanthus Coal Projects.

Reverse circulation drilling to commence at Matilda

Blackham is poised to commence a 2,000 metre reverse circulation drilling program at Matilda in the near term, with the management considering the project has the potential for both sizeable open pit and high grade underground deposits.

Previous drilling has identified ore grade prospects that require further follow up programs, with the new program designed to test the continuity of the existing drill data.

Universal Coal: worth more than three times current value says broker

Fri, 27 Jan 2012 08:45:00 +1100

Universal Coal (ASX: UNV) has received a buy recommendation from DJ Carmichael, with a target price of $0.83 - which is more than three times the last traded price of $0.24.

The following is an extract from the report:

UNV is an ASX listed, South African focused coal exploration and development company holding interests in three thermal coal projects in the Witbank Coalfield and three coking coal projects in the Limpopo Coalfield, with ownership structures varying from 30% to 70.5% on a staged earn-in basis.

UNV has responded to media speculation surrounding its coking coal assets and advises that it is reviewing the appointment of advisors to assist the company with any formal approach it may receive on these assets.

Our recommendation and price target remain unchanged but the response does indicate the level of interest in the coking coal assets and signals a high level of M & A activity in the sector in the year ahead.

Key points

The Combined Berenice / Cygnus coking coal project resource was vastly increased in 2H2012 to 1.32Bt of which 402.4Mt (30%) is in the measured and indicated categories. Of this amount, and after taking into account geological losses, UNV estimate mineable resources of 479Mt, chiefly composed of a middling product and a smaller percentage of high grade coking coal.

As a result of the resource upgrade, UNV s interest in the project has risen
to 40% from 22%. A Scoping Study was initiated in 2H2012.

As yet UNV has not received a formal approach but the company has now indicated that a number of Indian and Chinese groups have expressed interest in the coking coal assets and UNV has held a number of discussion from interested parties involved in energy and the steel sector.

The size of the coking coal projects is an attraction for groups seeking long-term feed into steel operations. The project is ideally situated with respect to rail and road infrastructure which increases the level of interest further.

We believe the development is positive for UNV and could result in a formal offer which could potentially inject cash into UNV and potentially provide a strategic partner already embedded within the industry to provide off-take or the financial capacity to play a significant role in project development, possibly both.

We await further news and in the meantime, maintain our current buy recommendation and $0.83 valuation, reduced slightly for the reduction in cash since our previous note.

Metals Australia 52% share spike prompts ASX speeding ticket

Fri, 27 Jan 2012 08:40:00 +1100

Metals Australia (ASX: MLS) has jumped onto the investor radar, with the company's shares rallying 52% to $0.035 on high volume in the two days to Wednesday 25 January, prompting an ASX price and volume speeding ticket.

Metals Australia said the company was not aware of any material information that has not been released to the market, which may explain the sudden investor interest.

The company did however refer back to a couple of announcements made in November 2011, which included information surrounding numerous new uranium targets being identified at the Kudu-Impala prospect, with anomalism covering more than 16 square kilometres.

At the time the exploration manager for Metals Australia said that the survey results had been bettter than expected.

Hong Kong shares surging, best finish since Sept. 1

Fri, 27 Jan 2012 08:30:00 +1100

The Hang Seng Index (HSI) gained 1.6 percent to 20,439.14, its highest close since Sept. 1.

The market has climbed 11 percent so far this month, the biggest advance among Asian benchmark indexes, as investors place bets China will ease lending curbs and on signs the U.S. economy is improving and Europe will contain the region’s debt crisis.

Chinese lenders and developers rallied today on speculation the mainland will loosen monetary policy.

Markets in Hong Kong resumed trading today following a five-day weekend, while those in China remain closed for the Lunar New Year holiday.

Hong Kong stocks jumped on Thursday as mainland lenders, like ICBC and BCC, gained.

The benchmark Hang Seng Index moved up 328.77 points to close at 20,439.14 points, after trading between a day high of 20,453.47 points and a day low of 20,301.59 points.

Turnover shrank to 60.84 billion HK dollars (7.84 billion U.S. dollars) from Friday's 65.95 billion HK dollars.

The H-Share Index moved up 269.89 points, or 2.42 percent, to end at 11,416.88 points.

Banking giant HSBC edged up 0.78 percent to close at 65.05 HK dollars. China Mobile, China's dominant mobile carrier, ended up 1. 11 percent at 77.55 HK dollars.

Mainland lenders listed in Hong Kong jumped. ICBC, China's largest bank by market value, edged up 3.17 percent to close at 5. 54 HK dollars; CCB, the country's second largest lender by market capitalization, increased 1.97 percent to close at 6.2 HK dollars; BOC, one of the "big four", ended up 2.45 percent at 3.35 HK dollars.

Local property developers performed well. Sun Hung Kai, HK's largest property developer by market value, moved up 1.74 percent to close at 111 HK dollars; Cheung Kong Properties, owned by billionaire Li Ka-shing, edged up 1.25 percent to 105.3 HK dollars.

PetroChina, the country's largest oil and gas producer closed up 1.94 percent to 11.54 HK dollars. Sinopec, China's top refiner, moved up 1.22 percent to 9.14 HK dollars. China Life, one of the world's largest life insurers by market value, ended up 4.29 percent at 23.1 HK dollars.

Raw material producers also gained after oil and copper futures increased. The London Metals Exchange Index (LMEX), which tracks prices of commodities from aluminum to copper, rose for a third day yesterday.

Jiangxi Copper Co., China’s biggest producer of the metal, gained 4.5 percent to HK$20.75. Aluminum Corp. of China Ltd., the nation’s largest supplier of the metal, climbed 3.3 percent to HK$4.12. Cnooc Ltd. (883), the country’s No. 1 offshore oil producer, rose 2.2 percent to HK$15.84.

Spot gold soars to US$1732oz, Dow Jones softer; Caterpillar, Lockheed Martin report earnings

Fri, 27 Jan 2012 08:24:00 +1100

U.S. equity markets were only marginally softer overnight as home sales unexpectedly declined, marking the slowest year for builders since the government began tracking the data.

On the economic front, the Commerce Department said U.S. sales of new homes fell 2.2% in December to a seasonally adjusted annual rate of 307,000. For all of 2011, sales of new homes fell 6.2% to 302,000 -- the worst on record.

By the close the Dow Jones had eased 22 points to 12,734, with the NASDAQ 13 points lower at 2805.

In Europe, progress from Greece debt talks was still awaited as ongoing restructuring negotiations between representatives of private creditors and the country continue.

An agreement is a key condition for the ailing country to receive additional funds from the EU and IMF to make a necessary bond payment due in March.

In corporate news, investors digested a mixed batch of corporate earnings reports.

Heavy machinery maker Caterpillar (NYSE:CAT) posted record earnings in the fourth quarter on strong demand, easily beating Street estimates.

For the three months that ended December 31, the company posted earnings of $1.55 billion, or $2.32 per share, up 60 percent from $968 million, or $1.47 per share, a year ago.

Revenues hiked 35 percent in total, to $17.24 billion, from $12.81 billion a year earlier.

According to Thomson Reuters, analysts had expected $1.73 per share in profits, on $16.05 billion in sales.

Lockheed Martin (NYSE:LMT) said Thursday that fourth-quarter income dropped 29% as the US defense company posted a handful of special charges, as well as weaker results from its space systems and electronics systems businesses.

For the quarter that ended December 31, Lockheed Martin - maker of the F-22 Raptor and F-35 Joint Strike fighter jets - posted a profit of $683 million, or $2.09 per share, down from $961 million, or $2.67 per share, a year earlier.

Earnings from continuing operations fell to $2.14 from $2.28 per share, while revenue fell 4.3 percent to $12.21 billion.

Analysts surveyed by Thomson Reuters expected earnings of $1.94 per share on revenue of $12.31 billion.

Elsewhere, 3M (NYSE:MMM) also posted better than expected profits, as did Netflix (NASDAQ:NFLX), which saw shares rise over 21%.

After the closing bell Thursday, earnings are due from coffee chain Starbucks (NASDAQ:SBUX) and mobile phone maker Motorola Mobility (NYSE:MMI).

In other economic news, orders for durable goods climbed 3.0 percent last month, boosted by a surge in aircraft orders. Economists had forecast orders rising 2.0 percent.

Initial jobless claims for the week that ended Jan. 21 rose to 377,000, up from a revised 356,000 the week prior, according to the U.S. Labor Department. Economists had anticipated 375,000 claims.

Commodities

On the NYMEX, crude futures were up 0.07% to $99.47 a barrel and gold futures rose 1.34% to $1,725.90 an ounce.

Europe

European markets closed sharply higher Thursday with shares in Germany leading the region. The DAX was up 1.84% while France's CAC 40 rose 1.53% and Britain's FTSE 100 was higher by 1.26%.

Caterpillar posts record Q4 earnings, hammers Street estimates

Fri, 27 Jan 2012 08:00:00 +1100

Heavy machinery maker Caterpillar (NYSE:CAT) posted record earnings in its fourth quarter Thursday on strong demand, well beating Street estimates and sending its share price up before the opening bell.

For the three months that ended December 31, the company posted earnings of $1.55 billion, or $2.32 per share, up 60 percent from $968 million, or $1.47 per share, a year ago.

Revenues hiked 35 percent in total, to $17.24 billion, from $12.81 billion a year earlier.

According to Thomson Reuters, analysts had expected $1.73 per share in profits, on $16.05 billion in sales.

"Our strategy is squarely focused on customers, and in 2011 our employees, suppliers and dealers delivered," commented CEO Doug Oberhelman.

"We improved product quality, invested significantly in manufacturing capacity and product development, and improved our market position.

"We completed two large acquisitions—Bucyrus and Motoren-Werke Mannheim Holding GmbH (MWM)—in important growth industries that are a great strategic fit and provide our customers an even broader range of products."

Revenues under the company's machinery and power systems business increased 36 percent to $16.56 billion.

Sales from the construction industry under the unit increased 31 percent to $5.36 billion, as the company reported higher sales volumes in all geographic regions, especially for new products.

In the resource industry, sales rose 80 percent to $5.07 billion, largely due to higher sales volumes and the company's Bucyrus acquisition in July 2011. Meanwhile, power systems sales in the segment rose 22 percent to $5.67 billion on higher sales volumes for new equipment and parts, and improved price realizations, the company said.

Caterpillar's financials business posted $752 million in revenues, up four percent, primarily due to higher average earning assets, a favourable change from returned or repossessed equipment, and higher net revenues.

For the full year 2011, Caterpillar posted $4.93 billion, or $7.40 per share, in profits, an 83 percent increase over 2010. Revenues rose 41 percent to $60.14 billion.

"The 2011 increase in sales and revenues was the largest percentage increase in any year since 1947, and much of it was driven by demand for Caterpillar products and services outside of the United States," Oberhelman added.

"As a result, 2011 was a record-breaking year for U.S. exports at nearly $20 billion, which supported thousands of jobs in the United States, demonstrating the tangible benefits of free trade.

"Sales and export growth creates jobs, both in the United States and around the world. Not including acquisitions, our global workforce grew by more than 14,000 in 2011, and since the start of 2010, we have increased our workforce by more than 33,000, with more than 14,000 of those jobs in the United States."

The company’s total order backlog at year-end was $29.8 billion, up a whopping 59 percent from 2010.

Caterpillar's strong fourth quarter and full year results, as well as its record-setting backlog, has led the company to boost its revenues outlook for 2012.

The company said it now expects sales to be between $68 and $72 billion, while earnings are expected to be about $9.25 per share.

Analysts are expecting $9.07 per share for profits in 2012, on just $67.7 billion in sales.

Caterpillar said it expects its acquisitions to add about $6 billion to revenues, while a one to 1.5 percent increase in prices will help offset rises in material and labour costs.

In New York, shares of the Peoria, Illinois-based company rose 2.2 percent to $111.45, as of 8:41 am EDT.

Netflix customers streamed back in Q4 as earnings beat The Street

Fri, 27 Jan 2012 07:40:00 +1100

Streaming media company Netflix (NASDAQ:NFLX) beat Street estimates for fourth-quarter earnings as the number of subcribers to its online services grew.

For the quarter ended December 31, earnings came in at $40.7 million, or 73 cents per share, compared with income of $47.1 million, or 87 cents per share a year earlier.

Analysts were expecting 54 cents per share, according to FactSet.

Fourth-quarter revenue climbed 47% to $876 million, $19 million above analyst projections.

Netflix ended December with 24.4 million subscribers in the US, up from 23.8 million at the end of September. That gain of about 600,000 customers compares with the loss of 800,000 subscribers last summer after it raised its prices by as much as 60 percent.

With the backlash over higher prices easing, Netflix's biggest challenge may be fending off competitive challenges to its primary business of streaming video over high-speed Internet connections.

Amazon.com (NASDAQ:AMZN) is rapidly expanding a streaming service it started last year while many analysts are expecting Verizon Communications (NYSE:VZ) to also get into video streaming later this year.

Netflix expects its comeback to gather momentum in the current quarter.

The company forecast that it will add 1.7 million US subscribers to its Internet video streaming service. That would be in line with how many streaming subscribers signed up in last year's first quarter.

Netflix ended 2011 with 21.7 million streaming subscribers in the US and another 1.9 million in Canada and Latin America.

This month, Netflix introduced streaming plans in the UK and Ireland.

Looking ahead, the company forecast a first-quarter loss of 16 cents to 49 cents per share.

Analysts on average expect a first-quarter loss of 29 cents per share.

Netflix projected first-quarter revenue of $842 million to $877 million, compared with a forecast for $849 million from analysts.

London stocks in the news; ANGLE, StatPro, IGas Energy, Leni Gas & Oil, Range Resources

Fri, 27 Jan 2012 07:20:00 +1100

Intellectual property group ANGLE (LON:AGL) was at the centre of attention in London markets this morning after unveiling a new and improved deal to commercialise its potentially revolutionary embryo selection technology for IVF.

And alongside the agreement between subsidiary Novocellus and Danish firm Origio, the group unveiled a £1.2 million cash call, which will help fund the development of the EmbryoSure selection system.

The cash will also be used to take the company’s lead product, a cancer screening device developed by its Parsortix business, to the stage where it can be sold to the research market.

This will then provide an early, but much needed source of revenue ahead of full commercialisation of the cancer screening device.

The cash was raised via a direct subscription and a placing of stock at 70 pence a share, a 13 per cent discount to last night’s close.

ANGLE said EmbryoSure trials will begin shortly in order to launch the product by mid-2014.

There are two elements to these trials. A retrospective investigation will look at the benefits to the IVF selection process had EmbryoSure been used to assess pregnancy.

In the second study the technology will be used to select embryos for transfer. It will consider the effect on pregnancy and measure the success rate.

Recognising the increased costs of the trials, ANGLE has agreed to pay more towards the trials, with the maximum contribution being £500,000.

ANGLE’s holding in Novocellus will increase by 10 percentage points to 92 per cent.

It will receive £4.5 million in milestone payments and a 25 per cent royalty payment if and when EmbryoSure goes on sale.

ANGLE founder and chief executive, Andrew Newland, said: "We are delighted that the EmbryoSure trials are now progressing without delay and continue to believe that EmbryoSure has the potential to make a major impact in the IVF market."

The science behind the product was developed by the University of York, and it tests the amino acid profile of the culture medium used to carry the fertilised egg.

“We believe EmbryoSure will identify with 95 per cent confidence which one of the embryos is likely to be a top quartile embryo,” said Newland in a recent interview.

Today, Proactive Investors talked to chief executive of software firm StatPro (LON:SOG) Justin Wheatley.

StatPro’s new Revolution product is a low cost, high spec cloud-based analytics package for fund managers, which was launched at the end of last March.

And in just nine months it has built a commendable revenue base of just under £500,000 after it signed 50 clients.

This contrasts with 250 clients amassed over more than a decade for the company’s existing platform, StatPro Seven.

Seven generates around £29 million of sales a year and has a 92 per cent renewal rate.

However the company’s broker, Cenkos, estimates that sales are declining at around 7 per cent per annum.

Against that backdrop, it made sense to concentrate all the sales effort on the new, growing Revolution product, Wheatley said.

“We are totally focused on Revolution,” he added. “It represents a vast market.

“We have 50 clients in nine months versus 250 for Seven in 12 years. “This really puts it in perspective - the rate at which one can gather clients.

“There are thousands of potential clients around world.

“We need to get cracking. The sooner we do, the sooner we pile on revenues.

“We can’t know or hazard a guess at what these potential revenues might even be.

“But we know if we focus on it we will get there quicker than if we do it piecemeal.”

Cenkos predicts that Revolution revenues will total around £1.25 million this year, though it has also reined in its 2012 earnings prediction.

“It is possible that this year we will have slightly lower revenues,” said Wheatley

“But what we plan is a more productive use of our time and money.

“Revolution is an incredible opportunity. Seven, meanwhile, has reached the limit of what we can do with it. We need to go with something and it is quite exciting.”

Another feature story of the day was dedicated to IGas Energy (LON:IGAS), which has found a ‘very significant’ area of shale gas at the Ince Marshes site in Cheshire.

A shale section of at least 1,000 feet was found in the well. At target depth the well was still in the shale section, it said.

Gas indications were observed across the interval and it has identified a number of potentially prospective zones.

Chief executive Andrew Austin says he is very encouraged by the discovery of shale gas at Ince Marshes. He added that the shale interval exceeds what the firm had been expecting.

According to IGas, this area is part of the Bowland shale. IGas said that previous independent analysis of the Ince Marshes site suggested gas in place volumes of up to 4.6 trillion cubic feet.

In a shallower section of the Ince Marshes well, multiple coal bed methane (CBM) seams were also encountered, with 36 feet of net coal thickness. The well data is now being analysed for both the CBM and shale intervals.

Meanwhile at the Doe Green CBM project in Cheshire IGas has completed the ‘in-coal’ drilling phase for two new wells, DG-3 and DG-4.

The firm expects to start work on the production completion operations, which includes de-watering, for the two wells in the coming days. After that the wells will be tested.

Indicative flow rates are expected before the end of March.

Meanwhile, broker Cenkos Securities drew investors’ attention to Irish oil and gas explorer ProvidenceResources (LON:PVR), which it said looks significantly undervalued.

Cenkos has set a target price of 857p for Providence shares, with an estimate of the Barryroe prospect alone at $370.6 million or 476p per share.

Providence is currently drilling at Barryroe as part of a $500 million offshore Ireland programme started with its partners last year. Initial results are due in February.

The group upped its stake in the prospect to 80% in December by acquiring San Leon’s 30% stake in return for a 4.5% net profit interest.

As a consequence, Cenkos believes Providence will potentially be able to farm down more of the asset and still retain a holding in Barryroe of 30-40%.

Following a successful drilling programme at Barryroe, it expects Providence to make a declaration of commerciality for a development to produce in excess of 20,000 barrels per day.

“We have valued their ownership in Barryroe alone, on a very conservative 65% COS risked basis, at $370.6 million or 476p per share,” Cenkos said.

Another broker note covered by Proactive analysed the tie up between Leni Gas & Oil (LON:LGO) and Range Resources (LON:RRL), which was announced yesterday.

Analyst Barney Gray at broker Old Park Lane Capital has called the deal "mutually beneficial".

The broker, which rates both stocks a 'buy', released notes on both companies following news they would jointly develop onshore oilfields on the island.

In a binding Heads of Agreement, both companies agreed to jointly develop Range's Beach Marcelle field and LGO's Goudron oil field, which lies immediately adjacent.

The deal will see Range taking a 50 per cent stake in the Goudron oilfield by spending US$8 million. LGO has an option to acquire a 15 per cent stake in the Beach Marcelle project by spending a maximum of US$7 million.

Range already owns a number of producing assets nearby and this tie-up gives it additional reserves and production growth in Trinidad, while LGO gets sufficient cash to buy out Goudron’s previous owner and take the project forward.

LGO's Goudron field was originally developed by Texaco and more than 150 wells have been drilled to date. The field holds 2P (proven and probable) reserves of 8 million barrels. However, P3 reserves are 21.8 million barrels representing significant upside, said Gray.

London broker comment corner; Goldman Sachs upgrades McBride, positive on SABMiller

Fri, 27 Jan 2012 07:00:00 +1100

Proactive Investors brings you the buzz from the brokers, with a wrap of overnight comment from some of the biggest names in the London square mile

From London, household goods provider McBride (LON:MCB) has been upgraded to 'buy' from 'neutral' by Goldman Sachs analysts.

They say the firm's current valuation is unjustified and presents a buying opportunity, given the City heavyweight's expectation of improving earnings and cash returns for the stock.

"However, we remain mindful of the longer-term outlook given McBride’s vulnerable position in a supply chain that is at risk from a structural squeeze on margins following Tesco’s recent announcements," said Goldman, which targets a price of 136 pence for McBride shares.

Investment bank Goldman also says SABMiller (LON:SAB), which makes Grolsch, Peroni and bought Foster's Group last year, is still the best positioned brewer and drinks firm on its consumer staples card and reinstates its 'buy' rating on the stock.

SABMiller will release a fourth quarter 2012 trading statement on April 19 this year, added Goldman, which expects the statement to demonstrate continued robust volume and revenue growth.

"We continue to view SABMiller as the most attractive strategic asset within the sector," said analyst Mitch Collett, which targets a price of 2750 pence for the firm's shares.

Also in a note today, Goldman said it viewed positively Kurdistan focused Genel Energy's (LON:GENL) asset base - a view reinforced by an analyst visit last week.

"We believe that, with capital markets tight, the company has the ability to undertake accretive deals with its large cash reserves. In the short term, we believe the political situation is likely to remain volatile but we see potential for commercial exports in the future," commented Christophor Jost.

Genel was formed from the union of Vallares with Turkey’s Genel to create the listed oil explorer.

Wall Street bank Citi has downgraded miner Xstrata (LON:XTA) to 'neutral' from 'buy' and reduced its target price to £12 from £13.50.

Analyst Heath R Jansen said the diversified mining firm was now trading at a 20 per cent price/earnings ratio against that of giant Rio Tinto (LON:RIO) and a 10 per cent premium to BHP Billiton (LON:BLT), while the returns profile did not support this premium. Hence, the downgrade.

Citi said its own analysis of the mining companies suggested that Xstrata had underperformed its peers in recent years and while it believed this would change in future, 2012 was likely to be a 'challenging' year for the company.

Elsewhere, Investec released a note on budget airline easyJet (LON:EZJ) today, which unveiled first quarter results, and rates the stock a 'buy'. The broker has also increased its target price to 500 pence compared to 456 pence previously.

Today, the firm said easyJet revenues rose 16.7 per cent in the quarter while traffic rose by 8. 1 per cent.

"easyJet Q1 revenues rose 16.7 per cent, comfortably ahead of consensus. Both unit revenues and unit costs are ahead of our forecasts," said analyst Andrew Fitchie in the note.

The broker said as a result, it saw a 9 per cent upgrade to full year consensus.

Chemring (LON:CHG), the ammunition and countermeasures group, was downgraded by Credit Suisse to 'neutral' from 'outperform' today and its target price was lowered to 420 pence from 460 pence.

The bank said the firm had once been the 'definition' of a growth stock, but its earnings performance and outlook statements over the last six months were evidence of a defence cycle that has turned the corner and the business was now in a new 'norm' where growth was much weaker.

Profits in the year to October only crept ahead to £90.8 million from £89.1 million, despite revenues jumping by 25 percent to £745 million, the firm revealed on Tuesday.

Turning to small caps, Singer Capital Markets, following a meeting with management of ZincOx (LON:ZOX), confirmed that the Korean recycling plant (KRP1) project is on track and upheld its ‘buy’ recommendation on the company.

Singer analyst Charlie Long said the plant is on time and budget for hot commissioning during this quarter, which is currently expected at the end of March.

Elsewhere, house broker Fairfax said today's statement from Turkey focused Ariana Resources (LON:AAU) showed the company was making good progress on the Red Rabbit project.

The firm said the feasibility for the Kiziltepe part of the project was nearly complete.

Gold production should rise to 21,400 ounces in 2015 and the mine is scheduled for an eight year life but exploration is likely to allow further expansion of the gold resource, production rates and mine life, said Fairfax, which rates Ariana a 'buy' with a target price of 10 pence.

Elsewhere, analyst Barney Gray at broker Old Park Lane Capital has called Range Resources (LON:RRL, ASX:RRS) and Leni Gas & Oil's (LON:LGO) Trinidad tie up, announced yesterday, "mutually beneficial".

The broker, which rates both stocks a 'buy', released notes on both companies following news they would jointly develop onshore oilfields on the island.

The deal will see Range taking a 50 per cent stake in the Goudron oilfield by spending US$8 million. LGO has an option to acquire a 15 per cent stake in the Beach Marcelle project by spending a maximum of US$7 million.

Gray described the deal for Range as "very astute" and for LGO, the Old Park Lane Capital analyst said it was a "great".

Meanwhile, Metals Exploration (LON:MTL) called the last three months of 2011 a “rewarding” quarter, which saw the mining firm make significant progress at its flagship Runruno gold-molybdenum mine in the Philippines.

The company has now started earthworks at the Runruno site with the programme of early site works expected to take five months to expedite construction.

House broker Fairfax believes the company is significantly undervalued at 11p with more than three times upside at this point.

Mining analyst John Meyer said the team had made good progress at Runruno with permits acquired and earthworks started.

New results could add value before commissioning of a mine where much of the technical risk now seems to have been addressed, he added.

Leni Gas & Oil says drilling at Eugene Island field may start next week - UPDATE

Fri, 27 Jan 2012 03:36:00 +1100

---Adds broker comments---

Leni Gas & Oil (LON:LGO) said drilling on the Eugene Island field in the Gulf of Mexico could begin next week with the arrival of the Ocean Columbia jack-up rig expected imminently.

The rig has now been released by the previous operator and will be mobilised to the Eugene Island platform shortly if weather conditions allow.

The company and operator of the Eugene field, Marlin Energy last month approved additional drilling at the Eugene Island-184 leases, in which LGO currently holds a 7.25 percent working interest.

The drilling programme will start with the A-2ST01 well, a sidetrack of the existing A-2 well, which targets mean recoverable reserves of 0.5 million barrels of oil within the Tex X2 target level.

The slightly deeper Tex-X3 reservoir will also be tested by the well. Both reservoirs are productive in other wells throughout the field.

The partners have budgeted a total 16 days for the drilling and evaluation. The net cost to LGO of drilling, logging and evaluating the A-2 sidetrack is an initial US$280,000.

Any incremental production is expected to be realised quickly with a short payback period on the investment.

Only yesterday, LGO announced a tie-up with Range Resources (LON:RRL, ASX:RRS) to jointly develop onshore oilfields in Trinidad.

The deal will see Range taking a 50 per cent stake in LGO’s Goudron oilfield by spending US$8 million. And LGO has an option to acquire a 15 per cent stake in Range’s Beach Marcelle project by spending a maximum of US$7 million.

Shore Capital analyst Craig Howie described the tie up with Range as "very good news" for LGO in a note today.

It provides strong synergies across the two companies’ portfolios and gives LGO the necessary funding to ramp up activity levels in Trinidad, where the broker see excellent potential for reserves and production growth, he said.

Metals Exploration hails 'rewarding' progress at Runruno gold-moly project - UPDATE

Fri, 27 Jan 2012 03:35:00 +1100

---Adds broker comments---

Metals Exploration (LON:MTL) called the last three months of 2011 a “rewarding” quarter, which saw the mining firm make significant progress at its flagship Runruno gold-molybdenum mine in the Philippines.

The company has now started earthworks at the Runruno site with the programme of early site works expected to take five months to expedite construction.

Full construction is expected to take 15 months following the completion of early site works, which include the development of the processing plant pad and construction infrastructure.

Meanwhile, Leighton Contractors, which is responsible for the design and construction of the Runruno processing plant, has started detailed design and engineering works.

During the quarter, Metals Exploration received the declaration of Mining Project Feasibility (DMPF), allowing it to move Runruno into the development and construction stage, and raised its stake in the project from 85 percent to 100 percent.

Runruno, when it is up and running in the next two years, will produce an average 96,700 ounces of gold a year for the next 10 years and three months, according to the 2010 feasibility study.

The company has recently outlined a potential gold mineralised zone south of the Runruno mineralisation.

Drill intercepts included three metres at 3.46 grammes per tonne (g/t) gold and 454 parts per million (ppm) molybdenum and 13 metres at 2.28 g/t gold and 2,951 ppm moly.

“It has been a very rewarding and significant quarter with the issue of the DMPF, approval of a package of early site works and indeed the initiation of those works with the commencement of earthworks on the processing plant site,” said MTL executive chairman Ian Holzberger.

“The encouragement we continue to receive in our exploration drilling activities both south of the Runruno pit and at Magnetite Creek demonstrates the potential of Runruno.

“It is significant that the company has now developed an understanding of the potential mineralisation south of the planned pit and can set about testing that model.”

House broker Fairfax believes the company is significantly undervalued at 11p with more than three times upside at this point.

Mining analyst John Meyer said the team had made good progress at Runruno with permits acquired and earthworks started.

New results could add value before commissioning of a mine where much of the technical risk now seems to have been addressed, he added.

African Eagle Resources hires Lycopodium Minerals for Dutwa BFS

Fri, 27 Jan 2012 03:34:00 +1100

Engineering contractor Lycopodium Minerals has been chosen to complete the bankable feasibility study (BFS) for the Dutwa nickel project in Tanzania, African Eagle Resources (LON:AFE) announced today.

The Australia- based firm was chosen after an extensive bidding process.

Lycopodium will manage all the engineering tasks associated with the project's process plant and related facilities, including the tailings and will compile the final BFS report.

The report will include the work of other contractors, such as SGS Metallurgy, which was revealed yesterday by the firm as responsible for the pilot test programme, and Snowden - the resource and mine planning engineer.

African Eagle's chief executive Trevor A. Moss said: "Lycopodium's unrivalled experience in the study and development of projects in Tanzania is a fundamental skill which will contribute to the success of Dutwa.

"We look forward to a long and beneficial relationship with them."

Lycopodium completed Tanzania's first modern gold processing plant for Resolute Mining's Golden Pride Mine in 1998 and is currently providing services for a number of other nickel projects in Tanzania and Australia.

It will begin the engineering for Dutwa immediately and the full project team will be mobilised early next month (February), said African Eagle.

ECR Minerals expects Derewo River boost from West Wits lease sale

Fri, 27 Jan 2012 03:33:00 +1100

ECR Minerals (LON:ECR, OTC:MTGDY) today hailed gold group West Wits’ plan to use the A$9 million sale of four South African leases to fund the Derewo River project.

ECR holds a 4% direct stake in West Wits and an indirect stake through its 26% holding in Paniai Gold, which owns performance shares and options.

Paniai’s performance shares relate to the Derewo River gold project in Papua Province, Indonesia which is 50% owned by West Wits.

They convert if the project, which covers approximately 129,000 hectares in Indonesia, achieves production of 20,000oz gold by 28 July 2013. Full conversion of the performance shares and options would give Paniai an 18% stake in West Wits.

ECR injected its interest in Derewo River into Paniai Gold in 2009. Paniai subsequently sold the project onto to West Wits.

Patrick Harford, ECR managing director, said today’s news vindicated that decision.

“West Wits now looks set to substantially improve its financial position without the issue of new equity and has stated that the proceeds of the sale of the four leases will be principally applied to development of the Derewo River project, the objectives of which include the commencement of alluvial gold production in the near future.”

“We note that technical due diligence has already been carried out to the satisfaction of the consortium purchasing the South African leases, leaving only legal due diligence outstanding, and on this basis we feel confident that the sale of the leases will proceed to completion,” he added.

ECR is a mineral development company with interests in Argentina, the USA, Indonesia, Thailand and Australia.

Camco International reveals new CFO; President steps down

Fri, 27 Jan 2012 03:32:00 +1100

Camco International (LON:CAO) announced that Emmanuel Walter will join the company as chief financial officer and that president Yariv Cohen has today stepped down from the board.

Walter will take up the position with effect from next month (February 1), the company said.

Chief executive Scott McGregor said: "Emmanuel brings a wealth of financial experience working in the power sector in China, a key market and geography for Camco and will be a strong addition to our team.

"I look forward to working with him as part of our senior management team as we expand our clean energy business."

Walter joins the firm from Alstom where he was the chief financial officer of Alstom Grid in Shanghai.

Previously he has held senior positions in ABB Power Product and Alstom Power Service - both in China, Camco said.

Meanwhile, acting chairman of Camco Jeff Kenna thanked Cohen for his help in turning round the business over the last few years and wished him every success.

Triple Plate Junction opts for maintaining carried interest in Crater Mountain gold project

Fri, 27 Jan 2012 03:31:00 +1100

Triple Plate Junction (LON:TPJ) has decided not to participate in future funding of the Crater Mountain gold project in Papua New Guinea and reduce its stake to a 10 per cent free carried interest, held together with Celtic Minerals.

The company has informed majority owner Gold Anomaly (ASX:GOA) of its plans. The reduced stake will be carried through to the completion of a bankable feasibility study.

Triple Plate has also settled the previously flagged dispute with Celtic Minerals over the size of their respective shares in the Crater Mountain interest.

Triple Plate will hold 8 percentage points and Celtic Minerals 2 percentage points of the carried interest. Arbitration proceedings will stop and each party is paying its own costs.

Regarding the decision to reduce the Crater Mountain interest, the group said that while the drilling results from the property produced some promising results, they were not viewed as sufficient to justify Triple Plate contributing the amounts of money needed to fund the future drilling programme, which is budgeted to amount to a total in excess of AS$3.6 million to end June 2012 alone.

Chief executive Fraser McGee said: "I am pleased that we have been able to resolve our dispute with Celtic; the facts relating to this arose many years ago, and nobody currently connected with either company has any direct knowledge of them.

“While we believe that the Crater Mountain project has potential to deliver real value for the company, the results so far have shown that moving to a free-carried undilutable 8 per cent interest will enable us to retain value without significant capital expenditure."

Goldplat completes second gold pour from Kilimapesa

Fri, 27 Jan 2012 03:22:00 +1100

Africa-focused gold miner Goldplat (LON:GDP) has poured its second gold from the Kilimapesa mine in Kenya after successful commissioning of the elution plant.

The second smelt produced an 11.4 kg (366 ounces) gold doré bar of approximately 75-77% purity with the balance comprising about 20% silver. The bar was sold to Rand Refinery Limited in South Africa.

Goldplat added it will continue to smelt and produce gold from existing stockpiles at Kilimapesa on a weekly basis.

Once the stockpile has been used up smelting and gold production from the mine will occur on a monthly basis.

Goldplat chief executive Demetri Manolis said: "We are delighted to report on our second gold pour from our Kilimapesa mining project in Kenya.”

“Smelting and production of gold from our existing stockpiles of loaded carbon is continuing in line with management's expectations with gold sales positively impacting our bottom line in FY2012."

Shares in Goldplat rose by 0.25p today to 13.5p and have risen by almost 40% over the past two weeks on the strong newsflow from the company.

On Monday, Goldplat predicted it would easily exceed the 28,185 ounces gold produced in its previous financial year over the current twelve months.

The miner is also planning more exploration drilling at Kilimapesa and its other prospects at Anumso in Ghana and Nyieme in Burkina Faso.

The company is aiming to expand its total resource base towards 1 million ounces in the first half of 2012.

Westminster Group appoints COO for Aviation Security Division

Fri, 27 Jan 2012 03:20:00 +1100

Westminster Group (LON:WSG) has appointed industry veteran Dr Phil G Jackson as the new chief operating officer of its aviation division, Westminster Aviation Security Services Ltd.

Jackson has more than 20 years of experience in leadership positions, specialising in security services for the aviation and maritime sectors worldwide and in the delivery of national security initiatives in counter-terrorism, counter-narcotics and border security, the protection of critical infrastructure, and global supply chain assurance.

He served 26 years in the British Armed Forces and has worked in official capacities with the US, Middle East and African governments. He currently serves as a director to the International Civil Aviation Organisation Security Council.

Jackson's recent experiences include creating a security plan for Baghdad International Airport to meet US Transportation Security Administration (TSA) standards.

He implemented a 1,100-man project team including the training of Iraqi police in basic airport and aviation security and developed and initiated the security plan for a 1,500-man project to secure the International Zone (Green Zone) which covered the President's and Prime Minister's offices and all ministerial buildings in Baghdad.

He also worked as senior advisor to the US Department of State on the force protection program for the embassy in Kabul, Afghanistan, and assembled a training/operations team of military and police experts to work worldwide on operations assisting all types of security.

Jackson has extensive experience with aviation in the Middle East, having served on the Gulf Region Airport Advisory Board for the development of Qatar International Airport in Doha and as a consultant developing and initiating the security plans for Abu Dhabi and Dubai International Airports.

He has assisted several African and Latin American countries develop their transportation infrastructure mainly in the aviation sector, developing airport operations, security compliancy and business development for cargo and passengers.

Westminster chief executive Peter Fowler said: "I am extremely pleased to report that Phil is joining us to head up our aviation security business and believe his extensive experience and knowledge of the international aviation security sector will be a valuable asset in our continued growth in this sector. Phil's career summary speaks for itself.

"Westminster provides equipment and services to airports around the world and demand for our services continues to grow and we are currently looking at a number of sizeable project opportunities," he added.

Metals Exploration hails 'rewarding' progress at Runruno gold-moly project

Fri, 27 Jan 2012 03:18:00 +1100

Metals Exploration (LON:MTL) called the last three months of 2011 a “rewarding” quarter, which saw the mining firm make significant progress at its flagship Runruno gold-molybdenum mine in the Philippines.

The company has now started earthworks at the Runruno site with the programme of early site works expected to take five months to expedite construction.

Full construction is expected to take 15 months following the completion of early site works, which include the development of the processing plant pad and construction infrastructure.

Meanwhile, Leighton Contractors, which is responsible for the design and construction of the Runruno processing plant, has started detailed design and engineering works.

During the quarter, Metals Exploration received the declaration of Mining Project Feasibility (DMPF), allowing it to move Runruno into the development and construction stage, and raised its stake in the project from 85 percent to 100 percent.

Runruno, when it is up and running in the next two years, will produce an average 96,700 ounces of gold a year for the next 10 years and three months, according to the 2010 feasibility study.

The company has recently outlined a potential gold mineralised zone south of the Runruno mineralisation.

Drill intercepts included three metres at 3.46 grammes per tonne (g/t) gold and 454 parts per million (ppm) molybdenum and 13 metres at 2.28 g/t gold and 2,951 ppm moly.

“It has been a very rewarding and significant quarter with the issue of the DMPF, approval of a package of early site works and indeed the initiation of those works with the commencement of earthworks on the processing plant site,” said MTL executive chairman Ian Holzberger.

“The encouragement we continue to receive in our exploration drilling activities both south of the Runruno pit and at Magnetite Creek demonstrates the potential of Runruno.

“It is significant that the company has now developed an understanding of the potential mineralisation south of the planned pit and can set about testing that model.”

Investors welcomed the report as shares in Metals Exploration rose 3.5 percent to trade at 11 pence, valuing the company at £76.4 million.

Ariana Resources: Kiziltepe feasibility study nearly complete; announces US$2 mln loan facility

Fri, 27 Jan 2012 03:17:00 +1100

Ariana Resources (LON:AAU) said the feasibility study for the Kiziltepe part of its flagship Red Rabbit project in Turkey is now nearly complete as it updated investors on progress.

The wide ranging statement also revealed the firm had agreed a US$2 million loan with Yorkville Advisors for current funding requirements for the project.

And it added that the company had begun acquiring land near the Arzu South pit - one of the last hurdles for the permitting of the project.

The remaining work for the feasibility study is currently focused on the design of the open pits to minimise the strip ratio and the review of engineering designs.

Work has now begun on the designs for the tailings storage facility and the final plans are expected before permits for construction are received - anticipated in the second half of 2012, said the company.

Ariana's managing director Kerim Sener said key operational and corporate milestones continued to be reached at Red Rabbit, adding that the current focus was on publishing the feasibility study.

However, he said that because of some delays relating to new environmental regulations, first production from the project was now projected in 2013.

"We will keep investors abreast of developments in this regard over the course of 2012," he added.

Sener added that the Turkish government remained highly supportive of the development of the project and Ariana planned to finalise all the study work in order to expedite Red Rabbit into production.

Ariana said the US$2 million loan will be made available in two tranches, with the first for US$750,000 to be repaid in ten instalments and the final instalment due in January next year. The second tranche will be made available following repayment of the first tranche.

Interest at a rate of 10 per cent per annum on the outstanding loan amount, together with an implementation fee of 10 per cent on each advance, is payable with each instalment.

The firm also said today that it had agreed to make available a short-term loan of US$600,000 to be shared on a 50:50 basis with joint venture partner Proccea Construction to cover any shortfall in the development budget for phase one of the project.

Leni Gas & Oil says drilling at Eugene Island field may start next week

Fri, 27 Jan 2012 03:16:00 +1100

Leni Gas & Oil (LON:LGO) said drilling on the Eugene Island field in the Gulf of Mexico could begin next week with the arrival of the Ocean Columbia jack-up rig expected imminently.

The rig has now been released by the previous operator and will be mobilised to the Eugene Island platform shortly if weather conditions allow.

The company and operator of the Eugene field Marlin Energy last month approved additional drilling at the Eugene Island-184 leases, in which LGO currently holds a 7.25 percent working interest.

The drilling programme will start with the A-2ST01 well, a sidetrack of the existing A-2 well, which targets mean recoverable reserves of 0.5 million barrels of oil within the Tex X2 target level.

The slightly deeper Tex-X3 reservoir will also be tested by the well. Both reservoirs are productive in other wells throughout the field.

The partners have budgeted a total 16 days for the drilling and evaluation. The net cost to LGO of drilling, logging and evaluating the A-2 sidetrack is an initial US$280,000.

Any incremental production is expected to be realised quickly with a short payback period on the investment.

Only yesterday, LGO announced a tie-up with Range Resources (LON:RRL, ASX:RRS) to jointly develop onshore oilfields in Trinidad.

The deal will see Range taking a 50 per cent stake in LGO’s Goudron oilfield by spending US$8 million. And LGO has an option to acquire a 15 per cent stake in Range’s Beach Marcelle project by spending a maximum of US$7 million.

Singer Capital upholds ZincOx target price; says Korean recycling plant on track

Fri, 27 Jan 2012 03:14:00 +1100

Following a meeting with the management of ZincOx (LON:ZOX), Singer Capital Markets confirmed that the Korean recycling plant (KRP1) project is on track and upheld its ‘buy’ recommendation on the company.

Singer analyst Charlie Long said the plant is on time and budget for hot commissioning during this quarter, which is currently expected at the end of March.

However, Long recommended investors that want to play the commissioning phase to buy stock in February, noting that there is a possibility that hot commissioning will be brought forward if there are no delays.

Long projects the plant to produce the first batch of high grade zinc power before the end of March and achieve full capacity in the third quarter.

“In designing and building KRP1, management has demonstrated an ability to deliver,” said Long.

“We believe the commissioning and ramp-up phase will demonstrate management's technological expertise, already proven at the Skorpion project in Namibia.”

Long’s sum of the parts valuation of ZincOx of £114 million, which translates into 128 pence per share, is based on discounted cash flow models for KRP1 and KRP2. The overall valuation represents a significant upside of 110 percent to yesterday’s closing price of 64.3 pence per share.

The first project alone is worth 111 pence per share after a 25 percent discount to reflect technological risks.

The valuation of the second plant is discounted by 75 percent to reflect both technological and financing risks that could emerge if the euro zone debt crisis deteriorates.

This morning, shares in ZoncOx rose six percent to trade at 68 pence at 10:45.

Ariana Resources: Kiziltepe feasibility study nearly complete; announces US$2 mln loan facility - UP

Fri, 27 Jan 2012 03:13:00 +1100

---Adds broker comments---

Ariana Resources (LON:AAU) said the feasibility study for the Kiziltepe part of its flagship Red Rabbit project in Turkey is now nearly complete as it updated investors on progress.

The wide ranging statement also revealed the firm had agreed a US$2 million loan with Yorkville Advisors for current funding requirements for the project.

And it added that the company had begun acquiring land near the Arzu South pit - one of the last hurdles for the permitting of the project.

The remaining work for the feasibility study is currently focused on the design of the open pits to minimise the strip ratio and the review of engineering designs.

Work has now begun on the designs for the tailings storage facility and the final plans are expected before permits for construction are received - anticipated in the second half of 2012, said the company.

Ariana's managing director Kerim Sener said key operational and corporate milestones continued to be reached at Red Rabbit, adding that the current focus was on publishing the feasibility study.

However, he said that because of some delays relating to new environmental regulations, first production from the project was now projected in 2013.

"We will keep investors abreast of developments in this regard over the course of 2012," he added.

Sener added that the Turkish government remained highly supportive of the development of the project and Ariana planned to finalise all the study work in order to expedite Red Rabbit into production.

Ariana said the US$2 million loan will be made available in two tranches, with the first for US$750,000 to be repaid in ten instalments with the first due in January next year. The second tranche will be made available after the first tranche has been paid.

Interest at a rate of 10 per cent per annum on the outstanding loan amount, together with an implementation fee of 10 per cent on each advance, is payable with each instalment.

The firm also said today that it had agreed to make available a short-term loan of US$600,000 to be shared on a 50:50 basis with joint venture partner Proccea Construction to cover any shortfall in the development budget for phase one of the project.

House broker Fairfax said today's statement showed good progress with the feasibility study close to completion and Proccea making its first project financing investment.

"Production was expected to start in late 2012 but will now start in 2013," said the broker in a note to clients, adding that Fairfax expects an initial production of 7,000 ounces produced with ramp up to 14,400 ounces per year.

"Delay in the start relates to the design requirements on the tailings storage facility which the company expect to have in hand with permitting and construction targeted for H2 2012," it said.

Gold production should rise to 21,400 ounces in 2015 and the mine is scheduled for an eight year life but exploration is likely to allow further expansion of the gold resource, production rates and mine life, said Fairfax, which rates Ariana a 'buy' with a target price of 10 pence.

Range Resources and Leni Gas & Oil's Trinidad deal has benefits for both, says broker

Fri, 27 Jan 2012 03:12:00 +1100

Analyst Barney Gray at broker Old Park Lane Capital has called Range Resources (LON:RRL, ASX:RRS) and Leni Gas & Oil's (LON:LGO) Trinidad tie up, announced yesterday, "mutually beneficial".

The broker, which rates both stocks a 'buy', released notes on both companies following news they would jointly develop onshore oilfields on the island.

In a binding Heads of Agreement, both companies agreed to jointly develop Range's Beach Marcelle field and LGO's Goudron oil field, which lies immediately adjacent.

The deal will see Range taking a 50 per cent stake in the Goudron oilfield by spending US$8 million. LGO has an option to acquire a 15 per cent stake in the Beach Marcelle project by spending a maximum of US$7 million.

Range already owns a number of producing assets nearby and this tie-up gives it additional reserves and production growth in Trinidad, while LGO gets sufficient cash to buy out Goudron’s previous owner and take the project forward.

LGO's Goudron field was originally developed by Texaco and more than 150 wells have been drilled to date. The field holds 2P (proven and probable) reserves of 8 million barrels. However, P3 reserves are 21.8 million barrels representing significant upside, said Gray.

Meanwhile, the smaller Beach Marcelle licence contains proven (P1) reserves of 12.8 million barrels believed to be recoverable through secondary production techniques.

Range aims to start production from Beach Marcelle using water-flood techniques in 2013. It hopes the field will produce 5,000 barrels a day by 2015.

Gray said he believed the deal for Range was "very astute".

"In return for a 15 per cent interest in Beach Marcelle, which we believe is worth approximately US$38mln, Range’s eventual 50 per cent interest in Goudron is worth at least US$80 mln for the P2 reserves alone, more than offsetting a reduced interest in Beach Marcelle," he said.

For LGO, the Old Park Lane Capital analyst said it was a "great deal".

"For a modest sum, the company has secured an option to acquire an interest in Beach Marcelle at a significant discount to our valuation of the field," he pointed out.

The analyst added: "Aside from LGO’s assets in the US, Spain and southwest Trinidad, our preliminary estimates indicate that this deal could be worth over $103mln to LGO, equivalent to 4.5p per share on a fully diluted basis."

Lydian International gets fabulous result with upgrade, says broker

Fri, 27 Jan 2012 03:11:00 +1100

Gold explorer Lydian International ‘s (TSE:LYD) latest resource estimate for its Amulsar gold project in Armenia was a fabulous result for the company, according to broker FoxDavies.

The new estimate added a further 700,000 ounces of gold to the project’s total resource, which now stands at 3.2 million ounces.

FoxDavies said it had increased its price target for the Toronto-listed firm to C$5.25 following the upgrade.

“This is a fabulous result for Lydian and represents a 28% increase in total gold ounces.”

The broker added that nearly 1 million ounces (Moz) had also moved up from the Inferred to the Indicated category, which is crucial as it will allow these ounces to be included in future feasibility studies.

“This impressive deposit continues to steadily grow in size as more drilling is completed and is still open in most directions. We expect that this will not be the last resource upgrade for the deposit,” FoxDavies added.

Tim Coughlin, Lydian’s chief executive, said it was a significant step in developing the resources at Amulsar but also added it was not the end of the story.

The updated resource statement comprised indicated resources of 68.2 million tonnes at 1.0 grams per tonne (g/t) gold and 36.1 million tonnes of inferred resources at a grade of 0.9 g/t.

This gives Amulsar 2.1 million ounces of contained gold in the indicated category and 1.1 million ounces in the inferred.

Lydian currently owns 95% of Amulsar with an option to purchase the remaining 5%.

StatPro outlines plans to focus on new Revolution product

Fri, 27 Jan 2012 03:10:00 +1100

StatPro Group (LON:SOG) chief executive Justin Wheatley said he is “pleased” with the early commercial performance of StatPro Revolution, its low cost, high spec analytics package for fund managers.

Recurring revenue from the product totalled £470,000 for the nine months after launch and it is gaining traction in all its key markets.

Revolution takes the group into cloud-based computing where programmes are delivered on demand via the internet, rather than sold as rentals and installed on customers’ premises.

StatPro said increasing demand from clients to migrate to a cloud-based platform and its confidence in Revolution’s commercial potential had convinced it to shift its sales focus.

I revealed this morning it is accelerating its plans to invest in cloud technology and focus all its efforts on Revolution.

The changes will result in annual cost reductions of around £1.6 million at a one-off cost of £800,000.

StatPro said the current recurring revenue for Seven, its existing product, and data contracts is £29 million and the renewal rate in 2011 was around 92 per cent.

All these existing clients “represent a rich potential market” for Revolution as it upgrades them to it new cloud technology over the next few years, the company added.

In a wide-ranging update on trading StatPro said net debt had fallen to £3.4 million as at the end of last year from £5.5 million previously.

Lower consultancy income will result in revenues being “marginally lower” than expected, it was revealed.

But costs have been tightly managed so earnings are expected to be in line with forecasts.

CEO Wheatley said: "The board is pleased with the early success of StatPro Revolution in its launch year.

“Our StatPro Seven business has remained steady, providing a strong source of recurring revenue and profits.

“We believe our early action to invest in cloud technology will ultimately improve margins going forward and are confident of a successful outcome for the year."

ANGLE's improved deal with Origio and fundraiser kick-start EmbryoSure development

Fri, 27 Jan 2012 03:09:00 +1100

ANGLE (LON:AGL), the intellectual property group, this morning unveiled a new and improved deal to commercialise its potentially revolutionary embryo selection technology for IVF.

And alongside the agreement between subsidiary Novocellus and Danish firm Origio, the group unveiled a £1.2 million cash call, which will help fund the development of the EmbryoSure selection system.

The cash will also be used to take the company’s lead product, a cancer screening device developed by its Parsortix business, to the stage where it can be sold to the research market.

This will then provide an early, but much needed source of revenue ahead of full commercialisation of the cancer screening device.

The cash was raised via a direct subscription and a placing of stock at 70 pence a share, a 13 per cent discount to last night’s close.

ANGLE said EmbryoSure trials will begin shortly in order to launch the product by mid-2014.

There are two elements to these trials. A retrospective investigation will look at the benefits to the IVF selection process had EmbryoSure been used to assess pregnancy.

In the second study the technology will be used to select embryos for transfer. It will consider the effect on pregnancy and measure the success rate.

Recognising the increased costs of the trials, ANGLE has agreed to pay more towards the trials, with the maximum contribution being £500,000.

ANGLE’s holding in Novocellus will increase by 10 percentage points to 92 per cent.

It will receive £4.5 million in milestone payments and a 25 per cent royalty payment if and when EmbryoSure goes on sale.

ANGLE founder and chief executive, Andrew Newland, said: "We are delighted that the EmbryoSure trials are now progressing without delay and continue to believe that EmbryoSure has the potential to make a major impact in the IVF market."

The science behind the product was developed by the University of York, and it tests the amino acid profile of the culture medium used to carry the fertilised egg.

“We believe EmbryoSure will identify with 95 per cent confidence which one of the embryos is likely to be a top quartile embryo,” said Newland in a recent interview.

Currently there is no such means of identifying the best eggs.

Novocellus reckons EmbryoSure has the potential to increase pregnancy rates by a quarter and possibly by as much as 40 per cent.

As well as increasing pregnancy success rates, this has two other major benefits. The first is cost. If as touted EmbryoSure reduces the number of cycles of IVF required to get pregnant, the overall IVF cost will fall.

The second is less obvious and relates to the push from inside the healthcare system towards single embryo transfer instead of double embryo transfer.

Having a way of spotting these “top quartile” eggs would aid the transition to single embryo transfer.

“We believe there is going to be a regulatory drive behind our product,” Newland added.

Novocellus is partnered with Origio, a Danish firm, which sells the culture medium used in IVF.

In a separate announcement today, the group posted a first half loss of £1.8 million. Its cash balance as at the October 31 was £1.2 million.

However it was a strong period for the group, its developments and in particular the progress of Parsortix.

IGas Energy finds ‘very significant’ shale gas in Cheshire

Fri, 27 Jan 2012 03:08:00 +1100

IGas Energy (LON:IGAS) today announced that an exploration well has found a ‘very significant’ area of shale gas at the Ince Marshes site in Cheshire.

A shale section of at least 1,000 feet was found in the well. At target depth the well was still in the shale section, it said.

Gas indications were observed across the interval and it has identified a number of potentially prospective zones.

Chief executive Andrew Austin says he is very encouraged by the discovery of shale gas at Ince Marshes. He added that the shale interval exceeds what the firm had been expecting.

According to IGas, this area is part of the Bowland shale. IGas said that previous independent analysis of the Ince Marshes site suggested gas in place volumes of up to 4.6 trillion cubic feet.

In a shallower section of the Ince Marshes well, multiple coal bed methane (CBM) seams were also encountered, with 36 feet of net coal thickness. The well data is now being analysed for both the CBM and shale intervals.

Meanwhile at the Doe Green CBM project in Cheshire IGas has completed the ‘in-coal’ drilling phase for two new wells, DG-3 and DG-4.

The firm expects to start work on the production completion operations, which includes de-watering, for the two wells in the coming days. After that the wells will be tested.

Indicative flow rates are expected before the end of March.

IGas said it now has over 3,500 metres of lateral exposure to CBM seams in three wells. The DG-2 well already gave the firm 1,000 feet of exposure. Now the DG-3 well has added 1,500 feet of exposure and the DG-4 well added 1,000 feet.

The greater surface area exposed to CBM seams provides greater production potential.

The company said that the DG-4 well was in an area that was more faulted than it had anticipated, particularly in the deeper seams. This meant that drilling was more complicated and it took longer, however as a result of the seams-faulted nature IGas encountered higher levels of gas than in previous wells.

Doe Green and the coal bed methane portfolio have been the firm’s main focus in recent years. But following the recent acquisition of Star Energy and the growing interest in UK shale plays there is greater diversity to the business.

The Star acquisition added producing onshore oil assets to the IGas portfolio. This morning the company said that the integration of the new business is going smoothly.

Altogether production from all the group’s assets is currently 15 per cent ahead of forecasts, at a rate of 2,700 barrels a day. This is mainly made up of oil production, with it contributing 2,600 barrels a day. The rest is gas.

IGas said that around 1,500 barrels a day is currently hedged at a price of $93.4 per barrel, while the balance is currently being sold at more that US$106 a barrel.

"We are pleased to announce that we have completed the coal drilling phase at Doe Green and that we have seen strong performance from the production assets following the completion of our acquisition of Star Energy,” Austin said.

Providence Resources' potential significantly undervalued says broker

Fri, 27 Jan 2012 03:07:00 +1100

Irish oil and gas explorer ProvidenceResources (LON:PVR) looks significantly undervalued, according to broker Cenkos Securities.

Cenkos has set a target price of 857p for Providence shares, with an estimate of the Barryroe prospect alone at $370.6 million or 476p per share.

Providence is currently drilling at Barryroe as part of a $500 million offshore Ireland programme started with its partners last year. Initial results are due in February.

The group upped its stake in the prospect to 80% in December by acquiring San Leon’s 30% stake in return for a 4.5% net profit interest.

As a consequence, Cenkos believes Providence will potentially be able to farm down more of the asset and still retain a holding in Barryroe of 30-40%.

Following a successful drilling programme at Barryroe, it expects Providence to make a declaration of commerciality for a development to produce in excess of 20,000 barrels per day.

“We have valued their ownership in Barryroe alone, on a very conservative 65% COS risked basis, at $370.6 million or 476p per share,” Cenkos said.

The broker adds that with high impact exploration properties and major partners including ExxonMobil, ENI, Repsol and Petronas, Providence has demonstrated its ability to bring on assets while maintaining its exposure for minimal expenditure – “so the outlook for the farm down on success of Barryroe is good.”

In total, Cenkos said its sum of the parts, risked basis, estimate valued the current production assets and the 2012/13 drill programme at $1.28 billion or £15.76 per share.

That includes a value of £1.88 per share for the producing Singleton onshore field in the UK, which Cenkos says underpins the current valuation.

“With current production of approximately 900 BOEPD, revenues are expected to increase to almost $30 million in 2012 with cash flows of over $24 million.”

The aim to increase production to 1500 barrels daily (BOEPD) means the downside value of the business is well protected, Cenkos added.

Providence has approximately $100m in debt outstanding in the form of an oil swap and bond covered from the production income from Singleton.

Cenkos said the upside is in Providence’s medium risk appraisal and development assets such as Barryroe, Dragon and Spanish Point and its high impact, high risk exploration assets including Dalkey, Rathlin and the multi-TCF Dunquin prospect.

“Providence typically holds high equity interests in its assets before farming down to a free carry option or a manageable position, with a major as operator.”

“Using this model the company is in a position to further farm down, and so capture shareholder value or maintain an interest for negligible capital expenditure towards development.“

Providence is trading on an enterprise to 2P of approximately $4.09 per barrel, a significant discount to Risked NAV of the next two years drilling programme at approximately 0.17 times.

“This is a 70% discount to the sector and an indication of how much Providence is overlooked by the market.”

“While there is significant risk in the portfolio, and Providence holds significant equity investments in some of its assets, we feel that this is still an undervalued company.”

“With Singleton to cover the debt and an active few years of drilling underway on the asset portfolio, any one of which could be transformational for Providence, the investment case is compelling,” the broker said.

Statpro's Wheatley confident of Revolution's "vast potential"

Fri, 27 Jan 2012 03:05:00 +1100

StatPro (LON:SOG) chief executive Justin Wheatley said it was the “vast potential” of the company’s new Revolution product and the encouraging early uptake which prompted a shift of sales focus outlined earlier today.

Revolution is a low cost, high spec cloud-based analytics package for fund managers, which was launched at the end of last March.

And in just nine months it has built a commendable revenue base of just under £500,000 after it signed 50 clients.

This contrasts with 250 clients amassed over more than a decade for the company’s existing platform, StatPro Seven.

Seven generates around £29 million of sales a year and has a 92 per cent renewal rate.

However the company’s broker, Cenkos, estimates that sales are declining at around 7 per cent per annum.

Against that backdrop, it made sense to concentrate all the sales effort on the new, growing Revolution product, Wheatley said.

“We are totally focused on Revolution,” he added. “It represents a vast market.

“We have 50 clients in nine months versus 250 for Seven in 12 years. “This really puts it in perspective - the rate at which one can gather clients.

“There are thousands of potential clients around world.

“We need to get cracking. The sooner we do, the sooner we pile on revenues.

“We can’t know or hazard a guess at what these potential revenues might even be.

“But we know if we focus on it we will get there quicker than if we do it piecemeal.”

Cenkos predicts that Revolution revenues will total around £1.25 million this year, though it has also reined in its 2012 earnings prediction.

“It is possible that this year we will have slightly lower revenues,” said Wheatley

“But what we plan is a more productive use of our time and money.

“Revolution is an incredible opportunity. Seven, meanwhile, has reached the limit of what we can do with it. We need to go with something and it is quite exciting.”

The range of clients and the geographic spread of the new sales marked Revolution out as a product with true global potential.

It was also used by customers ranging from the small, independent fund managers with several million under management to a large, multi-national bank.

“This shows that Revolution is applicable over a number of verticals, which wasn’t the case for Seven. It has a very broad appeal,” Wheatley said.

The change of focus will lead to an annual cost reduction of around £1.6 million at a one-off cost of £800,000.

The StatPro chief executive is keen to stress that Revolution is not a replacement for Seven.

The first module of the Seven replacement will be launched next year and will be called Revolution Plus.

In a wide-ranging update on trading, StatPro said net debt had fallen to £3.4 million as at the end of last year from £5.5 million previously.

Lower consultancy income will result in revenues being “marginally lower” than expected, it was revealed.

But costs have been tightly managed so earnings are expected to be in line with forecasts. Cenkos is predicting EBTIDA of £6.1 million for the year.

Analyst Andy Bryant said: “Seven will remain a highly valuable and cash generative revenue stream into the medium-term- even on declining sales - and Revolution will ramp significantly over the next 24 months (both from existing and new clients).

“If management is successful then the value for shareholders is clear (especially as StatPro currently has no serious software as a service competition in this large market).”

From the U.S., Boeing Q4 profit takes off on commercial plane deliveries

Thu, 26 Jan 2012 10:00:00 +1100

Aerospace giant Boeing Co. (NYSE:BA) on Wednesday said fourth-quarter profit rose on stronger commercial plane deliveries.

For the quarter that ended December 31, net profit amounted to $1.4-billion, or $1.84 per share, far surpassing Wall Street expectations of $1 per share.

Last year, Boeing posted fourth-quarter earnings of $1.2 billion, or $1.56 per share.

Revenue came in at $19.56 billion, also better than expected.

Boeing chairman, president and chief executive officer, Jim McNerney, said: "Strong fourth-quarter operating performance, record revenue and backlog, and expanded earnings and cash flow capped a year of substantial progress for Boeing in 2011.

"Major accomplishments of our team during the year included certifying and delivering the first 787s and 747-8s, winning the US Air Force Tanker program, launching the 737 MAX, and securing both an important US missile defense contract and a key agreement for F-15s to Saudi Arabia."

Revenue for Boeing’s commercial planes division increased by 31 percent to $10.7 billion while revenue for its defense, space and security business rose four percent to $8.5 billion.

During the quarter, the company delivered 128 commercial planes, up from 116 a year ago.

Total order backlog at the end of the quarter was $356 billion, up from $320.9 billion a year earlier, and $331.6 billion in the prior quarter.

Boeing's commercial business has been benefiting from a global expansion of passenger air travel.

The company's latest 787 airliner entered commercial service with Japan's ANA carrier in late 2011.

For 2012, Boeing forecast it will deliver between 585 to 600 commercial airliners, up from 477 last year.

Boeing also said it expects to earn between $4.05 and $4.25 per share this year, on revenue of $78 to $80-billion.

That trailed the $4.89 estimate of 27 analysts surveyed by Bloomberg.

"We enter 2012 with renewed momentum, and proven business and product strategies. With a record backlog and intense focus on productivity, we are well positioned to deliver growth and increased competitiveness, even as we face constrained US defense spending and pension headwinds," McNerney concluded.

From the U.S., RPC shares drop as Q4 profits fall short, warns of "challenging" times

Thu, 26 Jan 2012 09:40:00 +1100

RPC (NYSE: RES) reported a rise in fourth quarter profit Wednesday as revenues increased 47.1 percent, but results came in below estimates as the company also warned that low natural gas prices could hit its prices as customers cut back on production.

For the three months to December 31, 2011, the provider of specialized oilfield serives and equipment, said net income was $74.58 million, or 51 cents per share, compared to 55.47 million, or 38 cents per share, a year earlier.

Adjusted for a three-for-two stock split, earnings were 34 cents per share, versus 25 cents a year ago.

Revenues increased 47.1 percent to $482.78 million on an increase in the fleet of equipment, improved utlization across most service lines, and better pricing, the company said.

Analysts had expected the company to earn 63 cents per share on revenue of $534.3 million, according to Thomson Reuters.

Its technical services segment, which provides production and maintenance services, saw revenues rise 50.6 percent for the quarter on higher activity levels from customers, as well as improved pricing in all of the service lines in this unit, among other reasons, the company said.

Technical services include anything from pressure pumping to surface pressure control equipment, well control, and fishing tool operations. These services generally work to improve the flow of oil and natural gas from producing formations or to address well control issues.

The company's support services segment saw revenues grow by 16.5 percent during the quarter compared to the prior year, mainly due to better pricing in the rental tool service line - the largest service line in the unit.

The equipment and services offered in this division include rental of drill pipe and related tools, pipe handling, inspection and storage services as well as oilfield training services.

Operating profit in both units improved due to higher revenues, improved pricing, and cost leverage, the company added.

But selling, general and administrative expenses rose 33.9 percent to $42.08 million in the fourth quarter, due to increases in total employment costs.

During the quarter, the company said it invested $111 million in new equipment and capitalized maintenance.

Higher labour and raw materials costs resulted in lower operating margins for the quarter compared to a year ago.

"Compared to the third quarter of 2011, RPC's consolidated revenues decreased by 3.9 percent during the fourth quarter of 2011," said president and CEO, Richard A. Hubbell.

"The factors contributing to this sequential decline included longer than normal holiday breaks among several large customers, activity deferrals due to various raw material shortages, and customer delays resulting from the transition between large projects.

"While some of these factors are believed to be transitory, several of these issues, such as procurement of raw materials, remain challenging.

"As we begin the first quarter of 2012, we note that the average U.S. domestic rig count during the fourth quarter increased by a relatively low 3.1 percent compared to the third quarter of this year, and the average price of natural gas decreased by 20.6 percent.

"We are concerned about these trends, and are monitoring the natural gas-focused basins in which we operate for signs of slowing customer activity and the impact on pricing for our services."

Still, the company's board voted to increase its dividend by 20 percent to 12 cents per share.

For the full year 2011, the company reported net income of #296.38 million, or $2.02 per share, versus $146.74 million, or $1.00 per share, a year earlier. Adjusted earnings came in at $1.35 per share, on revenues of $1.8 billion, up 65.1 percent.

Shares of RPC tumbled over 6.3 percent Wednesday, to $16.42 as of 12:25pm ET.

From the U.S., Delta Air Lines and US Airways Q4 profits beat estimates despite higher fuel costs

Thu, 26 Jan 2012 09:20:00 +1100

Delta Air Lines (NYSE:DAL) and US Airways Group (NYSE:LCC) posted fourth-quarter earnings that beat estimates as higher fares helped offset an increase in fuel costs.

For the quarter that ended December 31, Delta said adjusted earnings came in at $379 million, or 45 cents per share, on revenue which grew eight percent to $8.4 billion.

Analysts polled by FactSet Research expected 37 cents per share of earnings, on revenue of $8.32 billion.

The US carrier raised its prices during the critical holiday season while reducing flying to keep costs low. The money it made to fly a passenger a single mile rose 12 percent due to higher fares.

Fuel expenses rose five percent in the quarter, while other costs were flat. Delta consumed less fuel in the quarter, but average fuel prices shot up about 20 percent.

Delta's chief executive officer, Richard Anderson, said: "Delta people pulled together in 2011 to produce a solid profit, strong cash generation, and the best operational performance in the industry for our customers.

"Looking forward to 2012, we will continue our commitment to sustained profitability and superior returns by growing and diversifying our revenues, while taking a disciplined approach to capacity, costs and capital spending."

Delta’s strategy of reducing flying to match demand will continue. The carrier said it will cut flying capacity between three to five percent during the first quarter of 2012.

Meanwhile, US Airways Group said that fourth-quarter net income fell 35 percent as rising passenger revenue wasn't enough to offset a steep increase in fuel prices, but the company still beat estimates by a wide margin.

For the quarter, earnings came in at $18 million, or 11 cents per share, compared with $28 million, or 17 cents per share, a year earlier.

Excluding charges, it earned 13 cents per share in the fourth quarter. Revenue rose nine percent to $3.16 billion.

Analysts surveyed by FactSet expected a profit of two cents per share, on revenue of $3.15 billion.

The money US Airways made to fly a passenger one mile in the fourth-quarter rose 9.9 percent to a record 15.2 cents, as the airline raised fares in an attempt to offset a $232 million increase in fuel costs.

US Airways expects passenger demand to remain strong going forward.

The carrier may be examining a potential merger with bankrupt American Airlines parent AMR Corp, according to press reports.

Wednesday morning, Delta shares were up eight percent to $10.13, while US Airways stock spiked 14 percent to $7.30.