Fox Davies Capital Update featuring Copper Development, Continental Coal, Wentworth Resources
Mining News
Alexander Nubia International Inc. (BUY, C$0.35) (AAN TSX-V, C$0.09, ▲ 20.0%) announced results from the current surface sampling program at its Abu Marawat gold-copper-zinc-silver property. Best results include 12 m at 2.22 g/t Au, 8.7 g/t Ag, 0.14% Cu and 0.04% Zn, and 10 meters grading 1.94 g/t Au, 13.2 g/t Ag, 0.20 % Cu and 0.08% Zn.
Aura Energy (BUY, A$0.80) (AEE ASX, A$0.22, ▲ 4.5%) released results of the economic viability of its Haggan uranium deposit in central Sweden from an independent Scoping Study. The study concluded the project has a NPV of US$1090 M (pre-tax, 10% discount rate) with an IRR of 47%. The total life of mine capital costs of US$769m, including sustaining capital. The Payback Period is approx. 4.3 years, or less than a fifth of current project life. Operating costs of US$36/lb uranium net of by-products have been predicted and a nominal 30 Mtpa operation with a 25 year initial mine life with scope to expand. Aura's next objective is to advance the project into a pre-feasibility study this year. Planning for this has already commenced.
Colt Resources Inc (BUY, C$0.84) (GTP TSX, C$0.50, ► 0.0%) announced that it has received final analytical results for four holes from the ongoing drilling campaign on its Boa Fé gold project in southern Portugal. Best results include 29.4 m at 2.6 g/t Au, 10.85 m at 11.96 g/t Au, and 5.05 m at 3.3 g/t Au.
Continental Coal (LON:COOL) Limited (COOL LN, 16.5p, ▲ 8.2%) confirmed that it has executed a binding loan documentation with ABSA Capital for the previously announced approx. US$65 million of aggregate debt funding. The Company also advised that satisfaction of the remaining conditions precedent to draw down of the US$35 million, seven year project loan facility to fund the Penumbra Coal Mine development, is ongoing and scheduled to be completed later this quarter, allowing draw down of the debt funds to meet the development cost of the Penumbra Coal Mine.
Copper Development (LON:CDC) Corporation (BUY, 102p) (CDC LN, 26.5p, ▲ 3.9%) reported assay results from drill holes BSM023 to BSM030 at its Basay Project on Negros Island, Philippines. Hole BSM028 intersected 171 metres of 0.50% Cu, and BSM028 includes an intercept of 21 metres of 1.09% Cu. In the Southeast Deposit, BSM025 has intersected 645 metres grading 0.36% Cu equivalent. The 2012 drilling programme is underway with 44,000 metres of drilling planned for the year. The initial JORC compliant resource for Basay has been slightly delayed owing to continued delays at assay labs, but is expected to be completed in February.
Oil and Gas News
Chariot Oil & Gas (CHAR LN, 124.0p, ▼ 4.8%) has completed the 3500 sqkm 3D seismic acquisition programme across its Central Blocks (2312 A & B and Northern halves of 2412 A & B) offshore Namibia. The survey was acquired by the Ramform Viking using the latest GeoStreamer technology, and this operation was carried out in conjunction with Petroleum Geo-Services (PGS). The survey targeted an area in the north east section of the licence that contains 11 leads with a combined prospective resource potential of 3.972 billion barrels of oil. Processing and interpretation of the data has commenced and full results should be made public in Q2 2012.
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Wentworth Resources (LON:WRL) (WRL LN, 4.6p, ▼ 3.16%) today announced that its subsidiary, Wentworth Power Limited has agreed to sell its 100% owned 18MW gas-fired power plant and associated assets (located in Mtwara, Tanzania) to TANESCO for the cash consideration of US$13.5 million. The sale will, upon completion, became effective as of yesterday, 7 February 2012, and is expected to close on or before 9 March 2012. Wentworth and TANESCO both believe the deal benefits both parties: power generation not being a core business for Wentworth; allows Wentworth to streamline its Tanzania operations and focus exclusively on exploring for hydrocarbons and developing and producing its known natural gas resources; provides Wentworth with non-dilutive capital for near term investment in upstream operations and gas monetisation project development; TANESCO is Tanzania's electrical power utility and is well suited to manage, develop and grow this business; and TANESCO's mandate to own and expand electrical power generation fits well with Wentworth's commitment to increase production and sales of Mnazi Bay natural gas.
Europa Oil & Gas (EOG, 10.5p, ▲ 9.1%) today announced a significant improvement in its UK production and revenues generated during the six month period ending 31 January 2012, compared to the equivalent period last year. Highlights: 61% increase in 1H 2012 revenues to £2.4 million compared with £1.5 million in the same period last year; Revenue improvement due to a 23% increase in volumes to 187 barrels of oil per day compared with 151 bopd during the equivalent period last year and a 39% increase in oil price to US$108.9 per barrel compared with US$82.7 in 2011; Increase in volumes due to the West Firsby WF-9 well coming on stream, and reduced downtime caused by breakdowns, drilling activities and weather conditions. Europa currently has three producing assets in the UK, all located onshore in the East Midlands, with a 100% working interest in the West Firsby and Crosby Warren fields and a 65% working interest in the Whisby 4 well.
Oilfield Services News
Rig Count News. The Baker Hughes Rig Count is the key barometer for the oilfield services industry and in particular the drilling contractors. The worldwide rig count for January 2012 was 3,751 up 139 from the 3,612 counted in December 2011 and up 315 from the 3,436 counted in January 2011. The U.S. Rig Count for January 2012 is standing at 2,003, up 292 year over year. The international rig for January 2012 was 1,171 down 9 from the 1,180 counted in December 2011 and up 10 from the 1,161 counted in January 2011. The data, despite revealing some declines still reads positively for the industry and the positive fundamentals prevailing.
Our key Buy recommendations in the UK are Kentz, Hunting, Petrofac, and Wood Group. We are also positive on Schoeller Bleckmann and Newpark Resources.
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Disclaimer:
Copper Development Corporation (CDC) is a copper mining and development company. CDC's principal asset is its 92.5% interest in the Sipalay-Hinoba-an Copper Project (the Hinoba-an Project), which is located on the island of Negros in the Philippines. The Company holds interest in the the Hinoba-an Project through Selenga Mining Corporation (Selenga). The Hinoba-an Project consists of two porphyry copper deposits, which includes the Don Jose (DJ) deposit and the A1 deposit, with mineral resource of 173 million tons containing over 1.6 billion pounds of copper metal. The Company has drilled over 90,322 meters for 473 drill holes in the Hinoba-an property. CDC’s 100% owned subsidiaries include Hinoba Holdings (Australia) Pty Limited and Hinoba-an & Sipalay Holdings, Inc. more »
Continental Coal Limited is a South Africa-based thermal coal producer with a portfolio of producing and advanced coal projects located in South Africa's major coal fields. It is principally engaged in mining and development of coal projects. During the fiscal year ended June 30, 2012 (fiscal 2012), the Company focused on mining in South Africa at the Ferreira and Vlakvarkfontein operations, and the construction of its third mining operation at Penumbra. Continental also continued exploration and development on its other existing coal assets in South Africa and Botswana. On July 25, 2011, its South Africa-based subsidiary, Continental Coal Ltd, acquired 100% of the share capital of Ultimatum Challenge Trading (UCT) Pty Ltd. On November 21, 2011, it acquired 100% of the Wolvenfontein Coal Project. In May 2013, the Company acquired 16.113% stake in Continental Coal Ltd. more »
Wentworth Resources Ltd, formerly Artumas Group Inc., is a Tanzania-based company, engaged in the exploration and production of oil and natural gas. The Company is involved in developing commercial opportunities for identified hydrocarbon resources, including methanol, ammonia, urea, and pipeline gas. The Company operates three business segments: the Gas Operations segment, which include the exploration, development, production and transportation of natural gas and other hydrocarbons, and these activities are carried out in Tanzania (Mnazi Bay Concession) and Mozambique (Onshore Rovuma Block); the Power Operations segment, which includes the production and distribution of electricity in Tanzania, and the Corporate Activities segment. more »
