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Beacon Hill Resources, Leni Gas & Oil, Cluff Gold, Wentworth Resources, plus others feature in Fox-Davies Newsflash


Mining News

Balamara Resources Limited (ASX:BMB) announced the discovery of high-grade silver mineralisation at its Montenegro Base Metals Project (Monty). These results come from two holes drilled at the end of 2011 to provide samples for metallurgical testing. The most significant intersection on the first hole was 5.5m (from 181.5m) at 507.7 g/t silver, 4.01% zinc, 2.83% lead and 0.28% copper and 11m (from 161m) at 14 g/t silver, 5.13% zinc, 3.44% lead, and 0.21% copper. The second hole drilled along strike from the first hole gave best results of 8 m (from 147m) at 129.7 g/t silver, 2.45% zinc, 1.50% lead and 0.29% copper  

Beacon Hill Resources (LON:BHR) has released the Scoping Study results for its Arthur River Project magnesite project in Tasmania. Total capex is estimated at A$155 with an A$42M NPV10 based on 292kdtpa ROM producing on average 100kdtpa calcined magnesia over the proposed 17 year mine life. Although the project is non-core, the Company will progress the project to full feasibility, complete the current drilling program to upgrade the inferred resource and secure a JV/ offtake partner. 

Berkeley Mineral Resources (LON:BMR) has finally received the official large-scale Mining Licence 6990-HQ-LML. Good news for the Company; it can now proceed with the pre-feasibility study at Kabwe, lead and zinc project and continue process testing. 

Cluff Gold (LON:CLF) has appointed Hendrik Johannes Faul, Anglo American's Head of Mining, as an independent non-executive director. This appointment has been made as a result of the Board's decision to review its structure following the appointment of John McGloin to the position of Executive Chairman (designate). As part of the Board review, Tim Wadeson has also agreed to step down as Non-Executive Director of the Company at its next Annual General Meeting. 

DiamondCorp (LON:DCP) has appointed Michael Toxvaerd to the Board as a Non-executive Director. Mr Toxvaerd is Chief Investment Officer of HBG Management Partners, a UK private equity firm serving high net worth private and institutional clients in the Arabian Gulf. He was also founder, CEO and Deputy Chairman of NeutraHealth Plc, an AIM listed company. 

Premier Gold Resources (LON:PGR) has raised £350,000 gross through a placing of 70M new ordinary shares at 0.5p per share. The funds will be used to advance exploration work at the Cholokkaindy gold project in Kyrgyzstan including further geochemistry, conventional trenching as well as continuous profiling using a bulldozer, which also is needed to prepare sites for diamond drilling. The Company has also decided to implement a share option plan granting options over 40M shares to directors at 0.5p per share, the same price as the placing.

Rambler Metals and Mining plc (LON:RMM) has provided a project update from its Ming Copper-Gold Mine in Newfoundland and Labrador's Baie Verte Peninsula, Canada. On 24 April 2012 the Company completed a record gold pour of 1935 ounces over a two week period. In those two weeks, milling throughputs averaged 706 tonnes per day with an average gold grade of 7.39 g/t. With improvements to the mill's throughput and run of mine head grade, April's gold production has exceeded 3,700 ounces.

Red Rock Resources plc (LON:RRR) reported that it has successfully completed on the sale to Anglo Pacific Group plc (APG LN) of a 50% interest in the Company's 1.5% gross production royalty over any production from the Mt Ida iron ore project. The Tranche 1 payment of US$6,000,000 for 0.3% of the GRR has been settled by the payment of US$3,899,999.81 and the issue and allotment to Red Rock of 416,161 new Anglo Pacific shares. These shares were valued at approximately $2,139,730 at the close of trading on 1 May 2012. The remaining tranches of the acquisition total US$8 million and will be paid as follows:

Tranche 2: US$4M payment for a further 0.225% GRR following the results of a positive definitive feasibility study (DFS), a formal decision to mine and that 20% of the pre- production capital costs outlined in the DFS are provided for.

Tranche 3: US$4Mfor a further 0.225% GRR following the commencement of commercial production, taking the total to 0.75% GRR.

Yamana Gold (LON:YAU) has released slightly below consensus 1Q'12 results despite production being up 4% to 278,832 gold equivalent ounces (234,532oz gold and 2.2Moz silver). Revenue was US$560M for the quarter, but cash costs on a co-product basis were up sharply to US$518/oz from US$449/oz (1Q'11). Production is still forecast at 1.2M-1.3M gold equivalent ounces for FY'12 and total capex spend for the year is US$665M. The Company has cash and equivalents of US$868M.

Oil & Gas News

Sefton Resources (LON:SER) Today's RNS should provide further support to Management's drive to create value for shareholders as it makes progress across its assets. The Company has a portfolio which offers balance between near term and long term drilling activities spread across its operating regions (California and Kansas). With a very active campaign to expand and increase its asset and production base respectively, we believe that the Company is well placed to grow in 2012. In the news:

In Kansas

Exploration programme underway

Pipeline system on track to flow first gas Q3 2012

Completion of the LAGGS sales line

Ongoing discussions with potential suppliers of third party gas, and sales agent has been appointed to market gas 

In California

Increase in oil production to 142 bopd following workover (220 bopd recorded in recent days)

A further increase in production expected with four more well workovers

Cyclic steaming showing a 200% improvement in production post-steaming on the Yule #5 well

The full field steam flood report on schedule to be received in June this year. 

Wentworth Resources Limited (LON:WRL) News that the well has encountered a gas bearing zone between 1,106 and 1,109 metres is a positive development. The Company will now conduct Drill Stem Test to establish the flow rate from the new reservoir interval, not previously encountered in the Mnazi Bay Block. However, previously no significant channel sands were identified in two of the three proposed targets (Pliocene and Miocene), which was a disappointment. The next few weeks will be crucial for the overall commerciality of the project. In the news:

The well, which was spudded on February 1, 2012, has now been drilled to a depth of 2,671 meters and are conducting testing operations. 

Full logging operations have been completed.

The zone to be tested is  a new reservoir interval, not previously encountered in the Mnazi Bay Block.  

The reservoir is a clean limestone of Pliocene age which exhibited strong gas shows during drilling (4.3%  total gas).

Petrophysical interpretation of wireline logs indicates a pay zone with 17% porosity and 78% hydrocarbon saturation indicating good reservoir quality.  

Leni Gas and Oil (LON:LGO) Following the evaluation of number of strong expressions of interest for sale of its Spanish assets, the Company announced that it has granted the highest bidder the exclusivity until 31st May 2012 in return for a cash deposit. A number of conditional cash bids to buy the assets have been received at a very significant premium to the original €2.6 million paid for these assets, and the Company will now be working closely with the bidder to close a transaction.Today's news bodes well for the long term future of the Company. The divestment could potentially represent the best opportunity for the Company in light of the announcement for the commencement of Trinidad field operations by July 2012. A plan for recompleting the two productive wells, MN-44 and MN-209 presents an opportunity for the revenue flow by the end of the year. In the news:

LGO confirmed that it had granted the preferred bidder for its Spanish assets exclusivity until 31st May 2012 to complete definitive documentation.

Due diligence is now well advanced and the parties have had preliminary discussions on the structure of the deal, details of which are expected to be concluded in the coming week.  Final agreement is expected to be concluded in May, although this cannot be guaranteed.

The Company also reports that final arrangements for the farm-in to the Advance Oil Company Ltd leases in the Moruga North area of Trinidad, previously announced in August 2011, are now being concluded and the Company expects to commence field operations by July 2012. 

Initial operations to be conducted by LGO include the recompletion of two productive wells, MN-44 and MN-209, and the drilling of one new well.

Quick facts: Archer Daniels Midland

Price: 39.56 USD

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Market Cap: $21.98 billion


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