Fox Davies Capital Update featuring ATH Resources, Aurum Mining, Minera IRL, Lamprell, San Leon Energy

Tuesday, Feb 14 2012 by
Fox Davies Capital Update featuring ATH Resources Aurum Mining Minera IRL Lamprell San Leon Energy

Mining News

ATH Resources (LON:ATH) PLC (ATH LN, 33.50p, ▲ 3.08%) announced that it has renegotiated the terms of a second legacy contract. Under the new terms of the contract which are effective from 2 January 2012, there will be an increase in the selling price per tonne in consideration for additional options being granted over future coal supply beyond the end of the current contract. The third and final legacy contract will be fulfilled at the end of March 2012.

Aurum Mining (LON:AUR) PLC (AUR LN, 3.25p, ▲ 4.00%) provided an update on the ongoing drilling campaign on the "El Facho" structure of its Zamora gold project through its Spanish joint venture with Ormonde Mining plc. Best results include 23 m at 1.1 g/t Au, 12 m at 3.4 g/t Au, 3 m at 3.6 g/t Au, and 6 m at 3.7 g/t Au.

Minera IRL (LON:MIRL) Limited (MIRL LN, 71.50p, ► 0.0%) announced the results of a Feasibility Study for the Don Nicolas Project located in Santa Cruz Province, Argentina. The Don Nicolas Project will become Minera IRL's second producing mine with commercial production targeted to commence in Q4 2013. Ore treatment will be at a rate of 350,000 tonnes per annum to produce a steady-state average of 52,400 ounces of gold and 56,000 ounces of silver per year over an initial mine life of 3.6 years. The life-of-mine cash operating cost, after silver credit, is expected to be US$528 per ounce gold. Recoveries of 92.1% of gold and 47.4% of silver are expected. Capital cost is expected to be $55.5 M. Based on a gold price of US$1,250 per ounce, an NPV @ 5% of US$44.7 million (pre-tax) and an IRR of 34.6% (pre-tax) is expected.

Tri-Star Resources PLC (TSTR LN, 0.78p, ▲ 4.70%) provided an update to its drilling programme on its Goynuk Project, Turkey, which has recently been completed. Best results include an intercept of 7.10% Sb over 4.70m and 2.7 m at 2.3% Sb.

Oil and Gas News

San Leon Energy (LON:SLE) (BUY 60p), (SLE LN, 12.25p, ▼ 2.00%). Four potential zones for gas production. The Company is analysing the final technical results of the Siciny-2 well located in the SW Carboniferous Basin of Poland. The Siciny-2 well, 100% held by San Leon and comprising of 880,000 acres was recently completed. The initial goal of collecting core and down hole geophysical data focused on understanding the unconventional gas potential of the Carboniferous section has been achieved. The Carboniferous is known to be the source rock for the significant gas production in the overlying Permian Rotliegendes formation in Poland. Penetrating more than 1,000 metres of Carboniferous section, the stratigraphic test well reached target depth of 3,520 metres, and more than 265 meters of continuous core were collected across three prospective intervals identified in the Siciny-1 well. A previously unseen fourth potential Carboniferous shale section and a fractured tight gas sandstone was also encountered below 3,200 meters in the well. Tight rock analysis will be performed on the core to evaluate the potential for commercial shale gas and tight gas sand production. Valuable drilling data was also obtained in drilling the complex structure of the Carboniferous section, allowing the Company to reduce the time and cost of drilling future wells. Analysis and interpretation of the core and logs is expected to take about three to four months in preparation for future production testing operations. With the flurry of drillbit success, the next six to twelve months should be exciting for San Leon Energy.

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Aurelian (AUL LN, 16.50p, ▼ 1.49%). Will the company bask in the glow of San Leon’s sunshine? On the 1st of February this year, management have effectively put the company up for sale. At that time Aurelian’s update pointed towards a significant amount of frustration and disillusionment with the market, with the market valuing their gas portfolio at £30mm. Today’s news from San Leon will focus attention on just what the company has in its portfolio, and whether fresh eyes can unlock more value. With cash accounting for a significant proportion of Aurelian’s share price, and today’s announcement from San Leon that there are ways of making Polish shale gas work, Aurelian’s “for sale” tag may now start to attract some interest.

Oilfield Services News

Lamprell (LON:LAM) (HOLD), (LAM LN, 329p, ▲ 0.70%) announced yesterday the award by Leighton Offshore Pte Ltd, a Singapore based company, of a contract for the fabrication of two topsides and jackets in connection with the Iraq crude oil export facility reconstruction. The contract value is $62m. The works will be performed at Lamprell’s Sharjah facility and are due for delivery in Q4 2012.

Saipem (Monitored Coverage): Saipem’s 2011 results were broadly in line with market expectations with revenues at €12.6Bn, EBITDA at €2.13Bn and adjusted net profit at €921m. The group’s outlook statement reads positively for both the industry and the company itself. The group’s backlog at €20.4bln is close to record levels.


Filed Under: Oil & Gas,
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ATH Resources plc is a holding company. The Company is engaged in the operation of surface coal mines and the subsequent sale of coal to the United Kingdom electricity generators, industrial and domestic customers. The Company operates under the title of ATH Resources. The Company operates in one segment Surface Mining. Throughout the development and operation of its projects, the Company focuses on the restoration and rehabilitation of the sites and land is returned to a range of uses, including agriculture, forestry, nature conservation and other forms of development. In addition to its operating mines, it also has a range of other coal mining projects in Scotland and two through its subsidiary, Societe des Ressources Minieres du Massif Central (SRMMC), including a series of six existing coal concessions in south-central France. The Company’s wholly owned subsidiaries include Aardvark TMC Limited, ATH Garleffan Limited, ATH Regeneration Limited and Northumbrian Power Limited. more »

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Aurum Mining Plc is an investment company. The Company has two segments: Corporate and Mining. Corporate segment include the heads office activities of the Company and all non-current assets allocated to corporate activities in the United Kingdom. Mining segment is engaged in the mining, production and exploration of gold and other precious metals and all noncurrent assets allocated to mining activities in the Kyrgyz Republic. As of March 31, 2010, the subsidiaries of the Company included Aurum Mining Kazakhstan LLP, Tryden International Limited and Aurum Mining KG. On December 22, 2009, the Company completed the disposal of Kaldora Company Limited and the Andash Mining Company, which operated in the Kyrgyz Republic. more »

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Minera IRL Limited (Minera IRL) is engaged in the mining, development, exploration and operation of gold mines in Latin America. The Company’s projects include Corihuarmi Gold Mine, Ollachea, Don Nicolas and Patagonia. The Corihuarmi Gold Mine is located in the Peruvian high Andes. Ollachea project is Minera IRL's flagship project in southern Peru. The Ollachea Gold Project is located in southern Peru, approximately 250 kilometers north of Lake Titicaca, on the eastern escarpment of the Andes Mountains. The Minera IRL Patagonia business unit is located in the mining province of Santa Cruz, Argentina, which is engaged in the gold/silver exploration. Its major mines include AngloGold Ashanti's Cerro Vanguardia Mine, a gold producer in southern Argentina, Hochschild and McEwen Mining's San Jose Mine and Pan American Silver's Manantial Espejo, whilst Goldcorp is developing the Cerro Negro Project. more »

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  Is ATH Resources PLC fundamentally strong or weak? Find out More »

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About Fox Davies Capital

Fox-Davies Capital Limited (FDC) has been advising and raising funds for the natural resource sector since February 2001. The firm specialises in assisting international resource companies to gain access to the UK, European and North American capital markets and has a substantial background in emerging markets particularly in Africa, Asia, Russia and the CIS.  FDC enjoys a successful track record in advising and undertaking fundraising transactions for its clients ranging from private equity to IPO and secondary offerings and works with over 350 specialised institutional resource and emerging markets funds worldwide.  FDC is authorised and regulated by the Financial Services Authority (FSA) and is a member firm of the London Stock Exchange (LSE). more »

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