Today's Market View Including Asiamet Resources Metal Tiger Petropavlovsk Premier African Minerals and others

ProactiveInvestors UK - - Comm_Tech_Technologies

(MENAFN - ProactiveInvestors)Chinese equity markets continue to fall as investors ignore government data • Investors continue to see Chinese equities despite a 26% rise in fiscal spending through August • Peasant farmers who have savings in the market but were slow to react to stock market volatility may now be selling stock following a loss of confidence in the market and in the government • Chinese brokerages are under new pressure for failing to properly verify trading accounts which may have been used by restricted and leveraged investors to trade stock. Reports suggest some Chinese brokerages are being punished for their non-compliance. Chinese regulators have also being calling in fund managers to explain their trading strategies. Economic News US – Economic news due today: • Aug core retail sales (0.2%mom v 0.4%mom in Jul) Aug retail sales incl autos (0.3%mom v 0.6%mom in Jul) Aug industrial production (-0.2%mom v 0.6%mom in Jul) Aug manufacturing production (-0.3%mom v 0.8%mom in Jul) Japan – The BoJ kept its monetary policy unchanged while flagging growth risks developing on the back of the slowdown in emerging economies. • The BoJ will continue to buy Y80tn (US663bn) worth of bonds and other assets per annum in an effort to accelerate inflation and support economic growth. • Among major risks potentially leading to more stimulus from the BoJ the institution mentioned developments in emerging economies the rate of the recovery in the US and debt and growth concerns in Europe. EU – Car sales post another double digit monthly growth in August month-on-month although the pace of gains slows from Jul results. • EU sold 780k cars last month up 11.2%mom. • This compares to 14.6%mom recorded in Jul which marked the strongest growth since late 2009. Germany – Zew economic survey results are due later today with estimates for a deterioration in the sentiment though Sep regarding current situation (64.0 v 65.7 in Jul) and respondents' outlook (18.3 v 25.0 in Jul). • The index has lately been trending down on the back of concerns over slowing Chinese economic growth and its effect on the Eurozone a major trading partner. France – Consumer prices were marginally up last month on yoy basis (0.1%yoy v 0.2%yoy in Jul and 0.2% forecast) coming in line with German levels of inflation. • It compares to 0.1% recorded in Germany 0.4%yoy in Italy and -0.5%yoy in Spain during the month. UK – Inflation falls to 0%yoy in Aug in line with market estimates and down from 0.1%yoy in Jul. Australia – The RBA meeting minutes suggest downside risks to the outlook increased lately on the abck of developments overseas. • The Bank provided positive outlook for the domestic market as a weaker AUDUSD exchange rate and low rates provide support to businesses and consumers. • On China the RBA noted recent volatility in Chinese markets as well as easing growth. While inflation runs below state targets the RBA believes China has further scope to expand monetary policy in case it is needed. Currencies US1.1316/eur vs 1.1332/eur yesterday. Yen 119.49/ vs 120.22/. SAr 13.439/ vs 13.579/. 1.543/gbp vs 1.546/gbp 0.713/aud vs 0.713/aud Commodity News Precious metals: Gold US1106/oz vs US1108/oz yesterday Platinum US953/oz vs US959/oz yesterday Palladium US585/oz vs US591/oz yesterday Silver US14.34/oz vs US15.50/oz yesterday Base metals: Copper US 5263/t vs US5351/t yesterday Aluminium US 1602/t vs US1628/t yesterday Nickel US 9770/t vs US10110/t yesterday Zinc US 1701/t vs US1783/t yesterday Lead US 1657/t vs US1687/t yesterday Tin US 15600/t vs US15500/t yesterday Energy: Oil US46.7/bbl vs US47.6/bbl yesterday Natural Gas US2.772/mmbtu vs US2.714/mmbtu yesterday Uranium US37.75/lb vs US37.25/lb yesterday – a small rise but better than nothing Bulk commodities: Iron ore 62% Fe spot (cfr Tianjin) US56.1/t vs US56.9/t Thermal coal (1st year forward cif ARA) US50.8/t vs US51.1/t yesterday Other: Tungsten - APT European prices 190/mtu (range 185-195/mtu) down 5/mtu on last Wednesday Company News Asiamet Resources (formerly Kalimantan Gold) (LON:ARS) 1.725 pence Mkt Cap 8.7m – Drilling locates additional shallow zone of high grade copper at Beruang Kanan • Asiamet Resources reports that it has located a second zone of high grade copper mineralisation during its current 80 hole/6500 metres programme of drilling at the Beruang Kanan copper project in Central Kalimantan. • The recent drilling has encountered a second zone of shallow copper mineralisation within the BKM zone to the north of the zone of high grade copper mineralisation reported in August. Results include a 35 metres wide intersection at an average grade of 1.73% copper from a depth of 20 metres in hole BKM32350-02 including an 11 metres wide section at an average grade of 3.49% copper at the top of the wider mineralised horizon. • The continuing drilling programme should help to evaluate the continuity of both these higher grade zones which have the potential to provide opportunities to develop low-stripping ratio starter pits which could enhance the overall economics of the BKM area. • The company has now completed 66 holes (5605m) or around 80-85% of its planned programme which is primarily aimed at providing data for an updated mineral resource estimate which is expected by early October. • Following the completion of the resource drilling programme scout drilling is expected to continue on the BKS and BKW targets. Conclusion: Asiamet Resources' current drilling success looks like it may underpin increased tonnage and grade estimates (currently an inferred resource of 24m tonnes at an average grade of 0.8% copper at a 0.5% cut-off) for the project as well as uprating at least a portion of the new resource to indicated status or better. Central Rand Gold (LON:CRND) 8.9 pence Mkt Cap 7.7m – Interim Results • The company has been in ongoing discussions with a number of Asian parties on the sale of the business. • Some of these discussions remain on going while others have been terminated. • Specifically the company continue to have discussions with the Hiria and its financial partner Hangzhou Everbright Equity Investment Management. • De-watering of the mine continues with the average pumping rate improving from the start of the year. • Based on current pumping rates the underground mining areas are expected to become accessible between Sept 2016 and Feb 2017. • Over the period surface mining resulted in gold output of 3435 oz. • For the period the company reported a loss of US0.7m compared to losses of US2.6m in the same period last year. • Losses have improved as a result of a cost cutting production with the cost base reduced by 40%. • Cash and cash equivalents are the end of the period stood at US1.1m. Condor Gold (LON:CNR) 53p Mkt Cap 24.3m – Structural geology study identifying additional targets at La India. • Condor Gold has released the findings of an independent review of the structural geology of its La India gold project in Nicaragua which currently stands at 18.1mt at an average grade of 4.0g/t gold (2.3m oz). classed as indicated and inferred. • The study has evaluated the structural geology both of the emplacement of the mineralisation and also subsequent events which have disrupted it and identified that 'Future gold exploration particularly for hidden deep-seated gold mineralisation should target the NNW striking jogs on WNW faults NNW-trending linking faults…and also the intersection of NNE faults such as the Highway Fault with crosscutting NNW and WNW –trending faults.' • An important result of the structural geology investigation has been the identification of 33 exploration targets of which 23 have known surface expressions of gold bearing veins. The findings of the study are being integrated with the recently completed geochemical exploration work to further refine targets for follow up exploration. • Earlier this month the company announced that in the current climate financing of the La India project development 'would prove significantly dilutive to existing shareholders. Furthermore there is no guarantee that either equity or debt financing for the construction of the mine and associated infrastructure can be secured on satisfactory terms.' The further exploration work and targeting of additional prospects in the vicinity of La India may help enhance the overall attractiveness of the project to potential acquirers or of joint-venture partners. Conclusion: A more detailed understanding of the structural setting and mechanics of the ore emplacement at La India should help to focus continuing exploration efforts and has already identified 33 targets for follow up work. Gem Diamonds (LON:GEMD) 130.5 pence Mkt Cap 180.5m – Amended Comment on sale of 357 carat white diamond • Yesterday we wrote that the proceeds of US19.3m from the tender last week was for two large stone the 357 carat white diamond and another 314 carat stone. • The US19.3m was solely for the sale of the 357 carat • A type IIa 214 carat recovered in May was sold into a partnership in June 2015. • Based on the tender proceeds the sale of the 357 carat stone achieved US54061/carat. • This sale compares with a 197.6 carat diamond achieving US10.6m in September 2014 (US53643/carat) and a 162 carat stone selling for US11.1m in Feb 2014 (US68518/carat) Conclusion: While these special stones are not directly comparable based on the price achieved it would appear that prices for exceptional stones are holding up against a generally weaker background for diamonds. While still early to judge this is a good sign and we look forward to an update on the broader performance on the diamond market from Petra's results later this week. Glencore (LON:GLEN) 120.6 pence Mkt Cap 15.7bn – Glencore stock falls as investors wait for news on equity or convertible issue • Glencore stock has fallen 6% this morning as traders show their concern over the time taken for the company to announce the structure and result of its fund raising. • Management's quick move to announce a cut in its debt caused short sellers to close their positions last week in the expectation of an underwritten equity issue. • More recent reports suggest the issue might come in the form of a convertible or equity issue. • We had expected news confirming the issue last week and any further delay may cause Glencore's stock to weaken further International Ferro Metals* (LON:IFL) Suspended on 26.08.15 – Likely sale of assets/business and/or equity of IFMSA • International Ferro Metals has held a meeting of creditors of its South African subsidiary IFMSA. • Business Rescue Practitioner ('BRP') who helps negotiations has 'informed the creditors that based on his findings to date he considered there to be a reasonable prospect of rescuing IFMSA. The rescue would most likely entail a sale of the assets/business and/or equity of IFMSA.' • The company has a number of interested bidders for the main ferrochrome smelter and associated assets and the BRP is allowing time for management to pursue current interest. • The BRP proposed a motion to extend the date for publication of the Business Rescue Plan until 30 November 2015 which was agreed by creditors. • Power - ESKOM offtake from Cahora Bassa dam cut from 1500MW to 650MW from today till Sunday 20th • Maintenance at the giant Cahora Bassa dam in Mozambique has caused a cut to ESKOM of significant power at a time when ESKOM is struggling to meet demand in South Africa • This may have a knock on effect with South African industry eg smelters and maybe some mines • The Siyanda Chrome Smelting Co (SCSC) led by David Kovarsky a former CEO of International Ferro Metals is looking to start construction in 2017 of a 150ktpa FeCr smelter in South Africa. • Feasibility work is reported to have been financed by trading firm Traxys which is planning to market the product from the smelter. • The smelter will have access to UG2 chrome ore power supplied by new Medupi plant and railway that would take FeCr to the port of Richards Bay. • Traxy's move to potentially finance a new ferrochrome smelter is interesting though surely it would make more sense for Traxys to bid for IFL's smelter and mines Conclusion: These are dark days for the South African ferrochrome industry with the impact of low ferrochrome prices exacerbated by strike action and power outages. The South African rand has been slow to depreciate though it is falling and this benefit has yet to feed through to better margins. We believe management are advanced in their discussions with potential buyers of the ferrochrome business. *SP Angel act as broker to IFL Metal Tiger plc (LON:MTR) – Exploration shows antimony coincident with large regional structure • Metal Tiger the resource investment company is also exploring for gold and other minerals in Thailand. • The company report the idedntification of antimony which is sometimes found with gold with the antimony coincident with a large scale regional structure. • Gold is also seen in the northern half of the Exploration Prospecting License 'EPL'. The EPL will need to be renewed to continue the work. • The company is also drilling a gold/tungsten jv in Spain has invested in a number of junior exploration companies to date including Kibo Mining Eurasia Mining and Ariana Resources. North River Resources (LON:NRRP) 0.215 pence Mkt Cap 4.3m – Open Offer and Placing • The company has launched an open offer to place 2 shares for every 3 existing shares at a price of 0.2 pence. • The company is looking to raise US2.8m from the open offer which is underwritten. • Certain directors have committed to subscribe for around 135000 of the placing. • Greenstone who is a cornerstone investor has undertaken to subscribe for the full open offer. • Greenstone had earlier subscribed to a US1.2m convertible loan note. • The total fund raise of US4m will be used on a Phase 1 work programme before construction of the Namib Mine. • Phase 1 work is to include front end engineering early development of the Namib Project North Decline sourcing of plant and equipment on-going underground development programme. Petropavlovsk* (LON:POG) 5.8p 190m – Earnings update • Changes to earnings and valuation reflect adjustment to the USDRUB exchange rate which is assumed to weaken further through H2/15 and average 65.0 compared with 58.1 recorded in H1/15 and 60.0 estimated previously. • We leave gold sales estimates unchanged with a slight decline in TCC (US606/oz in FY15 from US633/oz forecast previously) as POG is set to deliver strong H2/15 results led by a 2-2.5 times increase in processed grades and lower waste stripping costs at Pioneer as well as continuing depreciation in the USDRUB exchange rate. • Given 2/3s of gold sales to come in H2/15 (424koz v 230koz in H1/15) we expect EBITDA to come in at US231m through the second half translating into US153m in levered FCF (H1/15: US10m) using flat US1100/oz gold price (ex 75koz at US1201/oz hedge). This should bring Net Debt to US545m by year end. • We reiterate our BUY recommendation with a target price of 7.9p compared to previous 7.7p. (Dec year end) 2014 2015E 2016E 2017E 2018E 2019E Gold price (incl hedge) US/oz 1519 1331 1169 1200 1250 1300 Gold sales koz 617 654 552 553 562 562 TCC US/oz 865 606 771 755 810 885 Sales USm 865 799 700 731 773 773 Underlying EBITDA USm 252 321 207 242 242 200 PAT adjusted USm 4.4 88 39 75 83 55 EPS USc 1.16 3.33 1.18 2.28 2.52 1.68 EV/EBITDA x 4.0 3.1 4.8 4.1 4.1 5.0 PER x 25.4 2.7 7.6 3.9 3.6 5.3 PAT adjusted exclude 35.8% interest in IRC earnings Source: SP Angel Company *SPAngel analysts have visited the Pioneer Malomir and Albyn gold mines in Russia Premier African Minerals (LON:PREM) 1.45p Mkt Cap 9.9m – RHA tungsten update and adjustment of note conversion terms • Premier African Minerals reports that the process plant at its 49% owned RHA Tungsten project in Zimbabwe is now in steady state operation and is processing 'in excess of 20tonnes per hour into the recovery circuits.' Throughput is '25% higher than initial design expectations.' • The company has now dispatched its second shipment of tungsten concentrate and anticipates generating revenues from mid-September. • Currently most of the plant feed is sourced from open-pit mining however the company also has relatively rapid access to underground mineralisation from the old 926 adit level and a longer term plan to access ore from the 865 level of the old underground mine workings where it has 'previously reported 1 tonnes grading 0.75% WO3 non- compliant developed reserves.' • In addition to the operating update the company reports that it has agreed revised terms with Darwin Strategic relating the conversion terms for the 1.65m notes to be converted into ordinary shares. Previously conversion could be triggered when the ammonium paratungtate (APT) price quoted by Bloomberg traded for five consecutive days at or below 230 per mtu (metric tonne unit – equivalent to 10kg). • Darwin and the company have now agreed that 'the Trigger Price will be adjusted downwards from 230 per mtu to 130 per mtu with effect from today until 31 December 2015.' The APT price is currently standing at 190 per mtu and hence the readjusted terms should allow the conversion to be deferred until the end of the year. Conclusion: The life of the open pit resource at the RHA Tungsten project was always limited and the accelerated processing rate reduces this further which appears to be driving the acceleration of efforts to provide feed from easily accessible underground sources. Teck Resources Ltd (TSE:TCK) C8.4 Mkt Cap C4.9bn – Moodys downgrade to junk rating • Teck lost its investment grade rating with its senior unsecured rating reduced to Ba1 from Baa3 with a negative outlook. • S&P still maintain Teck on the lowest investment grade rating.