Fox Davies Capital Update featuring Victoria Oil & Gas, Gasol, Providence Resources, Sunrise Diamonds, Mercator Gold, Tanzanite One and Goldstone Resources

Oil & Gas Corporate News

Victoria Oil & Gas (LON:VOG) (BUY, £0.09) ( 4p, ▲ (0.50%)) announced the results of La-106, the second well at the Logbaba gas and condensate project in Doula, Cameroon. The well successfully reached a total measured depth of 10,509ft on 17th April 2010 and is currently being logged prior to its completion as a development well. The well was drilled deeper than planned due to the better than expected sand quality in the Lower Logbaba sections. Multiple gas-bearing sands were encountered between 5,482ft and 10,400ft, which can be correlated to wells drilled in the 1950's. The data obtained indicates in excess of 300ft of gross pay. Further detailed information on La-106 will be announced after running open-hole logs and completing the petrophysical evaluation. Well flow tests will be run after the casing is set. The completion of La-106 means that the key licence and joint venture requirements have been met. The Company has now completed all significant commitments under the exploration licence agreement and is in the process of submitting the necessary documentation to the Cameroon government to be awarded the thirty five year exploitation licence. Conceptual engineering for the gas production facilities at Logbaba and the pipeline to previously identified industrial customers has now been completed and has confirmed the feasibility of the project and its design assumptions. Detailed engineering, budget and schedule definition is underway with the target to deliver first gas to customers in Q4 2010. The Company is working closely with all Ministries and stakeholders in Cameroon to ensure that plant and pipeline construction meets the highest engineering and safety standards and that all permits and licences to operate are expedited.
Meanwhile in Russia, the 2010 work programme is underway at the West Medvezhye exploitation/licence in the prolific Yamal-Nenetsk hydrocarbon region in Northern Siberia. The current work includes Gas Tomography and Passive Seismic spectroscopy surveys over a large part of the block as part of the West Med appraisal and delineation programme and a 62km winter road has been built.

Comment: This excellent result follows La-105, VOG's first well in Cameroon, completed in March 2010 and tested at rates in excess of 55mcfd of natural gas and 1,000b/d of condensate from depths of 7,005 8,500ft from Lower Logbaba and Upper Logbaba D sands. La-106 was slightly redesigned following the results of a passive seismic survey over the field that indicated potentially better pay to the West of the original intended target. We need to wait for the logging results but it seems that La-106 has indeed found a larger and better reservoir section than in any of previous wells drilled on the field. This is a massive success in its own right and provides increased confidence in the potential of the whole licence which features an even larger passive seismic anomaly few kilometres to the North of Logbaba. We are also looking forward for an update to the third-party assessment of reserves that RPS should carry out soon and that will include the results of La-105 and La-106. The Company is well on track to deliver first gas on time in Q4 2010. The stock has been weak of late but we remain Buyers with a 9p price target.

Gasol (LON:GAS) (1.95p, ▼ (1.27%)) announced that it has entered into a £1m working capital loan facility. The facility allows it to borrow up to £1m to provide funds for the Company's working capital. The Loan, which is unsecured and provided by Gasol's largest shareholder African Gas Development Corporation Limited ("AfGas"), carries an interest rate of 5% per annum and is repayable at the end of its one year term. AfGas will receive 20 million warrants as a commitment fee, exercisable for a period of two years from the issue date at an exercise price of 2.46875 pence per Gasol share.

Providence Resources (LON:PVR) (3.9p, ▼ (0.76%)) has appointed FirstEnergy Capital LLP as an international broker and equity capital markets adviser. Cenkos Securities Limited continues to act as Providence's Nominated Advisor and LSE AIM broker whilst Davy Corporate Finance continues to act as IEX adviser and Davy as broker.

Xcite Energy (LON:XEL) ( 55.75p, ▲ (0.45%)) has appointed Arbuthnot Securities Limited as Nominated Adviser to the Company with immediate effect.

Mining Corporate News

Sunrise Diamonds Plc (LON:SDS) (0.63p, ► (0.0%)) announced that it has received positive results from a preliminary programme of metallurgical testwork and colour testing of barite concentrate from the past-producing Derryginagh mine in Ireland. The Company is targeting the Derryginagh barite deposit for the production of high-value white barite for use as a mineral filler in paints and plastics. Barite is the mineral form of barium sulphate. The next stage of work will be to access the dry upper levels of the old mine workings to collect larger representative samples for more detailed testwork. It is intended that the results of this further testwork will allow for the design of a low cost plant for the production of saleable barite concentrate.

Mercator Gold (LON:MCR) (2.38p, ▼ (13.64%)) announced an update on the Copper Flat copper-gold-molybdenum-silver project in New Mexico, USA, over which Mercator’s wholly owned subsidiary New Mexico Copper Corporation holds an exclusive option. As announced on 16 March 2010, Mercator has entered into a binding heads of agreement for the sale of NMCC to THEMAC Resources Group Ltd, a company listed on the TSX Venture Exchange. As a result of the sale of NMCC Mercator will acquire a substantial interest in THEMAC, and will therefore retain a very significant interest in the Copper Flat project’s future development.

Tanzanite One (LON:TNZ) (12.25p, ▼ (2.00%)) announced that in the first quarter of 2010, the Company achieved production totalling 562,992 carats from the processing of 10,263 tonnes of material at an average grade of 55 carats per tonne for the quarter. This strong performance represents an increase of approximately 17% versus the previous quarter. As a result of the increase in demand for tanzanite and the steady recovery of the coloured gemstone and luxury goods markets the Company has re-initiated its production ramp-up programme. In the light of the production ramp-up, the internal production target for 2010 has been increased significantly to 2.2M carats. This represents a 15% increase over 2009 production of 1.91M carats.

Goldstone Resources Ltd (LON:GRL) (5.13p, ▲ (4.06%)) announced that a mineral resource estimation which is compliant with the Joint Ore Reserves Committee of Australasia reporting code for the Homase Joint Venture Property. The estimate has been compiled by SEMS Exploration Services Limited. The total gold resource is 6.32Mt of ore at an average grade of 1.4 g/t gold, containing 282,608 ounces of gold. Approximately 30% of the resource is contained in oxidised ore and the balance within the transitional and sulphide zones. The overall metallurgical recoveries assigned to Homase ore by previous explorers were 93% for the oxide material and 84% for the sulphide zones.