(MENAFN- ProactiveInvestors) () – CORP: Receives first JV payments Market Cap: £7.0m; Current Price: 9p Receives proof of payments into JV
n Altona has announced that the Arckaringa Coal Chemical Joint Venture Co Pty Ltd its joint venture with Wintask Group Ltd and Sino-Aus Energy Group Ltd has received first payments.
n The JV agreement (announced 14th November) outlined an initial AUD$6m tranche (AUD$0.6m Wintask/AUD$5.4m Sino-Aus) of a total AUD$33m funding to be made by the two partners into the JV 30 days following the granting of government consents for the Arckaringa Project.
n On the 12th February Wintask contributed AUD$0.6m and Sino-Aus made a preliminary contribution of AUD$1.4m into the JV company.
n In an alteration to the agreement Sino-Aus agreed to pay the balance (AUD$4m) into the JV on or before the 31st of March. Northland Capital partners view: With a capital injection the JV is up and running and we await further news on its forward programme relating to the Arckaringa assets. The Arckaringa assets comprise up to 7.8bn tonnes of coal including (1.3bn tonnes JORC compliant) in its Wintinna deposit. Tavistock Investments (LON:TAVI) – CORP: GM & Result of Open Offer Market Cap: £2.9m; Current Price: 2.4p From yesterday: Acquisition of Standard Financial Group approved n All resolutions associated with the proposed acquisition of Standard Financial Group were passed unanimously at yesterday’s General Meeting.
n In addition to the £2.7m raised by Tavistock to provide additional regulatory and working capital through a placing a placing and subscription the company has raised £356k from existing shareholders pursuant to the 1 for 4 open offer representing a 58% uptake of the potential open offer.
n Accordingly a total of 152.8m new shares will be issued (135m for the placing and subscription and 17.8m for the open offer) and a total 276.4m will be in issue. Northland Capital partners view: Following the successful outcome of the general meeting and change in control approval from the FCA Tavistock now operates the 7th largest advisory network in the UK with more than £3bn under advice. The business will look for further growth organically and through acquisition.
() Hot Maden drill results Market Cap: £11.4m; Current Price: 2.1p From yesterday: 82m at 20.4g/t gold and 1.94% copper n joint venture partner Lidya has received the results from the final three holes drilled at the Hot Maden prospect located in Turkey.
n Results include: 82m at 20.4g/t Au and 1.9% Cu from 147m (HTD-05) and 27.6m at 1.3% Zn from 41.7m 25.5m at 2.3% Zn from 75.5m 12m at 4% Zn from 163m and 10m at 2.8% Zn from 203m (HTD-06) and 8m at 1.63g/t Au from 81m 1m 1.61% Cu from 97m 3m at 2.1g/t Au and 0.43% Cu from 124m and several other significant intercepts (HTD-07). Northland Capital partners view: These are exceptional results from ’ Hot Maden project located in Turkey and were rewarded by an 85% surge in the share price. Mariana currently owns 80% of the project and JV partner Lidya is earning an additional 50% in the project by spending a further $2m on the project and making payments of $0.5m to Mariana. Holes HTD-05 & 06 were step out holes designed to test the continuity of mineralisation along strike from holes HTD-04 that returned assay results of 103m at 9g/t Au and 2.2% Cu (02/02/15). Based on these results it appears that the JV partnership has defined a sub-vertical north-south trending high grade gold-copper zone that is flanked to the east by sediment hosted zinc mineralisation. The high grade zone remains open to both the north and the south as well as at depth. Mariana will be meeting with its joint venture partner next week to plan the next drill programme. With Lidya earning in to the project Mariana will not have to fund the next phase/s of drilling at the project but will benefit from any upside that results from the work completed. Mariana looks undemanding at these levels in spite of yesterday’s run up.
Week Ahead (16/02/15)
View from the trading desk
UK and US Markets are proving remarkably resilient to the stand-off over Greek debt restructuring perhaps feeling as in most cases so far some form of vaguely acceptable comprise will be reached in the 11th hour in order to avert ‘Grexit’. There was also the encouragement of a new ceasefire in Ukraine. Whilst there remain worrying headwinds markets have remained remarkably resilient with the UK’s main market remaining above 6800. Stripping out the resources stocks from the index performance has been even better. This is evident in the Midcap index that is trading at close to all-time highs.
Despite resources weakness there was some respite for the miners this week as (RIO.L) brought some cheer posting a 78% rise in annual profits for FY14 to $6.5bn (£4.3bn) and announcing a $2bn share buyback though organic profits fell back 9%. BT (BT.A) announced an accelerated book build of £1bn this week and was seen as a winner in its bid round for Premiership football rights.
Sales & Research thoughts
Oil Price: News in the FT that US rig count reduced 29% since the October high will support the view that the oil price crash will be a short sharp shock resulting in a rapid V shaped recovery. This is a tempting view given the significant scale back in industry activity. Production growth from the US has slowed considerably and should the trend continue eventually overall production should begin to decline given that new well IPRs are often a multiple of the subsequent years’ production levels. Clearly the seeds have been sown for a firmer long term oil price but there are many unknowns that will impact the timing and the shape of that recovery and inventories remain at record levels. However previous cycles have resembled more of a U shape and have lasted around 18 months before oil has risen to within 30% of pre-collapse levels.
In light of the facts at hand we continue to view $75/bbl as a reasonable forecast for next year but ahead of that there is the small matter of a June OPEC meeting and an uncertain global economic outlook. If OPEC is serious about maintaining market share then it wouldn’t want oil to raise much above $80/bbl in the medium term a level that could offer respite to marginal shale developments but the organisation has surprised in the past. In the meantime we expect further rationalisation and some consolidation in the sector. Cash rich companies such as Chariot Oil & Gas (CHAR.L) are in a prime position to pick up decent assets though it may be some time until those purchases are recognised as good deals by the market.
Consumer / Leisure: Recently Excel London hosted ICE Totally Gaming 2015 (3 Feb – 5 Feb). The conference was well attended by large and small technology gaming businesses. Northland Capital Partners was in attendance and whilst the conference offers an opportunity to exhibit technology capabilities it is an event where new commercial contracts are agreed between suppliers and operators. Listed companies to monitor for possible positive news flow over the immediate term are: Playtech (PTEC.L) Optimal Payments (OPAY.L) SafeCharge (SCH.L) (GAME.L) Quixant (QXT.L) and Stockholm listed Net Entertainment (NETB.SS).
Elsewhere Pendragon plc (PDG.L) reports full year 2014 results on Tuesday 17 February. A trading statement on 8th January pointed to a business trading strongly and ahead of expectations for the FY14 on the back of strong performance in the 3Q and the 4Q. Management alluded to being cautiously optimistic about 2015 on which we should get more of a flavour in next week’s results.
TMT: Tuesday sees interims from Monitise (MONI.L) followed by a Capital Markets Day. The company has already guided on H1 performance with revenue of £42.4m down 8.8% reflecting the shift away from the licence & services model towards subscription & transaction-based revenue. The latter increased 8% sequentially to £16.2m. In January’s trading update management also guided down on FY performance with revenue showing a small increase at best compared with previous guidance of >25% growth. Changes to the cost base should mean the company is EBITDA profitable in FY16. More significant in terms of next week will be an update on the company’s strategic review that may include a sale of the business.
(FDSA.L) the provider of trading investment management and information systems reports FY results on Monday. In November’s IMS the company reported continued improvement in its markets with a reduction in consolidations restructurings and closures coupled with interest in new functionality. That said the depth of the trough and ’s subscription model means that only modest constant currency growth is expected. This will be more than offset by sterling’s strength during the year. The outlook is more positive and is reflected in the FY15 PER of 28.8x.
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