Daily Mining Montor
In this news:
• Afferro has noted the announcement made on the 8 May 2013 by International Mining and Infrastructure Corporation confirming that it has successfully arranged financing of US$100M for the cash element of its potential offer for the entire issued and to be issued share capital of the Company
• Afferro has now received the relevant documentation for the source of funds and discussions on the indicative offer are taking place
• Afferro advises shareholders to take no action at this time.
Atlantic Coal (LON:ATC) announced an update in relation to the option agreement to acquire additional anthracite mining assets in Pennsylvania, further details of which were originally announced on 15 February 2012. As announced on 2 April 2013, the option exercise period ended on 31 March 2013. The Company has subsequently held a number of discussions with the vendor in connection with the further extension of the option exercise period. However, following these discussions, it was determined by the Atlantic Coal board of directors that an agreement on principal terms could not be achieved that would be acceptable to the Company and in the best interests of the Company's shareholders. Discussions with the vendor have therefore been terminated.
As part of its negotiations in connection with the proposed Target Transaction, the Company was able to secure three indicative offers of debt financing. Separately, and further to the announcement made on 21 January 2013 regarding the exercise of a lease option over the 410 acre Pott & Bannon Pennsylvanian anthracite mining property, the Board confirms that it is accelerating the payment for and subsequent opening of the Pott & Bannon site. Further details on the expected opening of the site will be announced in due course.
In this news:
• 3.9Mt at 1.68g/t for 210,500oz added at Edwards/Gryphon
• Total resource now 113.2Mt at 1.02 g/t for 3,715,500oz
• Additional resource grade exceeds expectations and lifts global resource grade by 2%
• Continuity of mineralisation between Edwards and Gryphon confirmed
• Additional high grade ore expected to boost early project cash flow.
This is a positive update for Bullabulling as the additional resources are above the global resource grade and provides potential for the Company to focus on higher grade mineralisation within the total resource, which we believe it will need to do in the initial production phases to justify the capex requirements.
In this news:
• The Offer provides consideration of three (3) Bushveld Shares for every five (5) Lemur Shares
• Values Lemur at A$0.099 per share and provides a premium of 65.5% to Lemur's closing price on 10 May 2013 of A$0.060 per share, based on the closing share price for Bushveld Shares of £0.109 per share on 9 May 2013 and an exchange rate of A$1.00:£0.659 on 9 May 2013
• Lemur Shareholders will benefit from exposure to Bushveld's strategy to create a diversified African junior mining company and its quality management team and will gain exposure to a diversified portfolio of mineral assets
• Bushveld has been advised that certain Lemur shareholders, who together hold approximately 42% of the issued capital of Lemur, intend to accept the Offer within five business days after commencement of the Offer Period in the absence of a superior proposal being publicly announced before the end of that five business day period.
Lemur Resource has risen 20% on the ASX to A$0.072/sh, making the offer a 37.5% premium to the current share price. As well as having the Imoloto Coal project in Madagascar, Lemur had A$17.46M in cash at the end of March, equivalent to A$0.091/sh.
In this news:
Operating Highlights - Blanket Mine, Zimbabwe
• As previously announced gold produced in 1Q’13 fell from 11,821oz to 10,472oz QoQ due to fewer working days during the period (84 days) due to Easter, but still up 14% on 1Q’12 (9,155oz)
• Gold production in April was 4,385oz and Blanket on target for forecast 40Koz in FY13
• Cash costs rose to US$669/oz from US$605/oz QoQ, due to the lower production, but total cash costs were US$7M from US$7.2M QoQ.
• Gold sales during the Quarter were 11,964oz at an average sales price of C$1,601/oz of gold
• Gross Profit (i.e. after depreciation and amortization but before administrative expenses) was C$9.0M from C$9.3M QoQ and CS$9M YoY
• Net profit after tax for the Quarter attributable to Caledonia shareholders was U$4.6M up from C$3.4M QoQ and C$7.1M YoY
• At March 31, 2013 Caledonia had cash and cash equivalents of C$25.2M.
The production figures were already released in April and the rise in cash costs were as expected given the Blanket’s high fixed cost base. We expect this to come down next quarter and going forward as production expands from 40Koz this year to 48Koz in FY’14 to 76Koz from FY’16. Given the Company’s strong cash position the Company is trading on an undemanding 1.9x FY’13 forecast earnings.
In this News:
• Fast tracking to Definitive Feasibility Study to underpin discussions on strategic alliances
• Acceleration of infrastructure development
• No fund raising required, no shareholder's dilution and no debt arrangements required
• New management of Shandong Gold confirms its interest in investing in Chaarat
• Cash reserves of approximately $24M are available to fund the revised strategy.
Chaarat has made various changes to the development strategy for the project. It was planning to bring the open pit Tulkubash part of the project into production in 2H’13 using a heap leach, but has now abandoned that idea, deterred by the required US$20M working capital requirement which would be difficult to raise for the Company in the current market. Instead it is now continuing with the main project DFS and hoping that by the time it is finished the markets will have improved or Shandong Gold will make a further investment or offer.
DiamondCorp (LON:DCP) announced its Final Results for the Year Ended 31 December 2012. The company reported a net loss of £3.534M, a reduction from the loss of £4.239M reported for 2011. Cash on hand at the end of 2012 amounted to £4.319M. A further US$6M (£4.2M) in term loan funds received from Tiffany & Co. subsidiary Laurelton Diamonds since year-end. There is also the IDC Loan R220M (GBP15.7M) available for drawn down when required in Q3 2013. Progress on the box cut and ramp development is on schedule and within budget.
Mwana Africa (LON:MWA) has released the results from a metallurgical scoping study for its Zani-Kodo project located in the Ituri region of the Democratic Republic of Congo.
In this news:
• The 398kg of samples taken from six holes across the Kodo Main orebody were non-refractory and responded well to all recovery processes investigated, with higher than 90% gold extraction being obtained across all the recovery methods tested
o The ore showed high amenability to the following process routes for gold recovery:
o Cyanidation on a milled run of mine (“ROM”) ore (96.4%)
o Gravity recovery followed by cyanidation on the gravity concentrate and gravity tails (94.16%)
o Normal flotation on ROM followed by cyanidation (95.61%)
o Flash flotation on ROM followed by cyanidation (91.43%)
o Gravity concentration followed by flotation on the gravity tails and intense leach on the gravity concentrate, and float concentrate with carbon in leach (“CIL”) on the final float tails (94.13%).
Mwana will carry out an economic assessment of each method before deciding what further testwork is required.
In this news:
• The State Agency for Geology and Mineral Resources, the controlling mining authority in the Kyrgyz Republic, has granted an 8km2 extension to the south-east of the Company's Cholokkaindy licence
• The expanded area now forms part of the Cholokkaindy licence which was recently extended through to 31 December 2017.
Premier Gold believes the mineralisation at Cholokkaindy extends into the new license area, so the application which increases the total license area to 32km2 makes sense.
Petropavlovsk (LON:POG) announced that following the recommendations of its Operating and Executive Committees, the Company's Board of Directors has approved adjustments to the Company's business plan in response to the recent volatility in the gold price. The aim of these adjustments is to reduce the level of the Company's net debt and improve the Company's cash flows. The Company also announces that Mr. Dmitry Chekashkin has been appointed as Chief Operating Officer and an Executive Director of the Company by the Board on 10 May 2013. The company plans to extend the development period of the pressure oxidation ("POX") Hub and the related flotation plant at Malomir by 12 to 18 months, thereby deferring US$150M in capital expenditure which would have been incurred in 2013. A comprehensive cost-cutting programme has been implemented to reduce annual operating and central administration costs by approximately US$10-15M giving total estimated cash savings of $160M in 2013 which will strengthen the financial position of the group. The 2013 gold production forecast of 760,000-780,000oz was reiterated. Gold production in 2014 is expected to be in line with 2013 levels, unchanged from previous guidance despite the extension of the POX Hub development period, due to recent exploration successes, particularly:
• Malomir, where new non-refractory resources are expected to sustain current levels of production in 2014
• Pioneer, where the Group received positive indications of the existence of further high-grade ore bodies; and
• Albyn, where there are significant historical resources at the newly-acquired Uglichikanskaya deposit (located 15km from the Albyn RIP plant).
In this news:
• Will be drill-testing an extension to the area of mineralisation covered by the current 121.5Mt at an in-situ grade of 57.8% Fe JORC Resource
• Extension area is approximately 200m wide and up to 3.9km in length
• Extension has an exploration target potential of between 45Mt and 80Mt of canga
• Potential to increase the Nimba Project's current JORC Resource of 121.5Mt
• Current JORC Resource covers only Plateau 2 and a portion of Plateau 3
• 37 borehole programme planned for Q2 2013 to test the quantity and quality of new area of mineralisation.
In this news:
• Balance of US$11.8M received under the conditional subscription agreement with Sun Avenue Partners Corp
• Loss of US$9.2M (2011: US$10.1M)
• Group net cash inflow in the year was US$0.3M (2011: net cash outflow - US$1.5M)
• ATF Bank Kazakhstan debt refinancing with new US$3M credit line from AsiaCredit Bank (Kazakhstan); cost of borrowing reduced from 14% to 9.5% per annum
• Commenced work on an approximately US$8.1M earth moving contract with a general contractor building a new railway in Western Kazakhstan
• Listing on the Kazakhstan Stock Exchange completed in December 2012
• Detailed Feasibility Study completed, demonstrating robust economics and attractive IRRs for the Chilisai Phosphate Project
• New resource update for 100% of the Chilisai licence area estimates a 130% increase in contained P2O5 in total resource compared with previous resource estimate for 40% of the Licence Area
• Signed second earth moving contract valued at approximately US$12M (at current exchange rates)
• Finished year with US$462k in cash up from US$213k in FY’11.
Vane Minerals (LON:VML) has released a 1Q’13 update from its gold and silver operations in Mexico.
In this news:
• 1,139oz. Au and 19,380oz. Ag produced in 1Q (4Q’12: 1,154oz. Au and 17,830oz. Ag)
• 8,697 tonnes of ore processed during 1Q (4Q’12: 7,856 tonnes) with average grades
• 5.62g/T Au and 97g/T Ag (4Q’12: 6.36g/T Au and 96g/T Ag)
• Average recovery rate of 78.4% Au and 77.1% Ag (4Q’12: 79.5% Au and 77.7% Ag)
• Total revenue for 1Q of US$1,924,656 (4Q’12: US$2,411,318)
• Direct production cost of $782/oz Au equivalent or $14.5/oz Ag equivalent (Q4
• 2012: $688/oz Au equivalent or $13.2/oz Ag equivalent)
• 38.3 tonnes of concentrate and 38.4kg of precipitates held in inventory at period end (Q4
• 2012: 34.9 tonnes and 38.4kg of precipitates)
• All gold and silver sold unhedged.
Daily Oil & Gas Monitor
Circle Oil (LON:COP) – 2012 Positive, But Egypt Still a Concern: Today’s 2012 results announcement serves to highlight the strong operational performance, with projects being delivered and brought online in accordance with plans. Operationally, however, Egypt continues to be the fly in the ointment, and while the Company reports an improvement in payments from Egyptian General Petroleum Corporation (“EGPC”), stating that “Cash receipts from the EGPC were up significantly on 2011.” Nevertheless, Receivables remain stubbornly high at ~$40mm (~200 days), and while EGPC payments may be improving, this is just relative to an absolute disaster last year; still, it is moving in the right direction, and we believe that over time, this will unwind itself fully. Given the operating performance, well balanced portfolio (we believe that the value for the shares remains at 95p), and that Cash (~$20mm) and Receivables (~$40mm) are such a significant proportion of the Company’s current valuation (~40%) we believe that the Company is increasingly becoming a target for predators. We are taking this opportunity to reiterate our BUY Recommendation and 95p Target Price.
In this news:
• Group revenue of US$73.M– up by 26% on 2011
• Operating Profit of US$28.2M – up by 41% on 2011
• EBITDA of US$39.3M - up by 48% on 2011
• Cash generated from operations of US$39.3M - up by 243% on 2011
• Cash at bank at year end of US$20.4M - up by 42% on 2011.
Ithaca Energy (LON:IAE) – Whole looking Greater than the Sum of Parts: Today’s 1Q results underline the potential of the synergies that are available to Ithaca following its acquisition of Valiant. The combined entity has now attained a level of critical mass, and while further production and exploration success needs to be achieved, the barriers to achieving it have been significantly reduced. We believe that this will increasingly lift the shares, and provide the potential for significant additional value creation, over and above the levels that each would have been able to achieve as independent entities.
In this news:
• Cashflow from operations increased over 20% to $34.8M (Q1 2012: $28.4M) - cash flow per share $0.13 (Q1 2012: $0.11)
• $14.6M of earnings excluding unrealised losses on financial instruments of $11.1M (Q1 2012: $12.1M)
• Average realised oil price of $114.32 /bbl (Q1 2012: $116.42 /bbl) including a realised hedging gain of $8.00 / bbl
• Strong clean balance sheet with cash net of drawn debt of $10.6M at end Q1 2013
• UK tax allowance pool of $424M at end Q1 2013.
• Approximately 2.6M barrels of future 2013-2014 oil production hedged at a weighted average price of ~$106 /bbl (approximately 25% puts / 75% swaps).
Premier Oil (LON:PMO) – Matang’s no Monkey: A successful conclusion to Matang-1’s test earmarks a successful conclusion to this round of exploration. While appraisal will be required to assess the Matang’s commerciality, this is a positive step. While there is significant CO2 in the accumulation (15%), we do not see this as being a barrier to commerciality at this stage. Until such times as we have a better idea of the asset’s potential, we are reiterating our 485p Target Price and BUY Recommendation.