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Goldstone Resources: So how much is a JORC worth?

2010-04-29T04:53:00.000-07:00

Goldstone Resources announced its maiden JORC at Homase last week (click here to view) and Mining Maven gave Exploration Director Hendrik Schloemann the opportunity to expand on the news with a brief Q&A session for investors (click here to view).

The exploration update confirmed a JORC compliant resource totalling 282,608 ounces, though judging from the initial market response this may have been less than some had hoped for. Perhaps, as often happens with speculation in the run up to significant news, the market may have got ahead of itself, and that old adage, “buy on rumour, sell on fact” came in to play. The share price has since recovered which would suggest this was indeed merely a knee jerk reaction.

However, we were rather impressed by the JORC figures. Why were we impressed?

Once again it’s down to the relative value of those ounces, and the fact that a big slug of the resource - 81% - came up in the measured and indicated category – so those ounces in the ground have a significantly greater value than inferred ounces.

For some reason the market currently seems fixated on quantity rather than quality, and this valuation anomaly is certainly not unique to Goldstone Resources. So coming from a value perspective - as we do – what value would we attribute to Homase?

Edison’s recent Gold Report, which provides global average values for Inferred, Indicated and Measured resources and extrapolating their values for the three JORC categories, ($340 per measured ounce, $159 per indicated ounce and $34 per inferred ounce) it would provide the following figures:

Measured – 157,298 ounces @$340 = $53,481,320

Indicated – 72,531 ounces @$159 = $11,532,429

Inferred - 52,779 ounces @ $34 = $1,794,486

Total - $66,808,235

This is rather crude metric and is used merely to attribute some sort of value on the JORC ounces at Homase. It should also be noted that Goldstone Resources is currently still earning in to the project and subject to successful fulfilment of all the stages in the JV agreement (click here to view) they will eventually achieve an 85% interest.

That said, based on:

- the hugely significant JORC;

- the ability to increase the JORC resource;

- the prospectivity of the region;

- the fact that Homase was previously mined by Anglogold Ashanti and;

- that Goldstone has itself confirmed negotiations with a strategic partner are underway;

we look optimistically on the company’s ability to take this project forward expeditiously, raising working capital when needed.

Having mentioned a number of (non-JORC) factors above it is worth expanding a little here.

Resource Expansion:

The company have confirmed in their announcement last week and in Mining Maven’s follow up Q&A session, that the resource holds the potential for further expansion down at depth and along strike. The resource as identified appears to be only a proportion of what Homase could actually hold and that is always a specific point of interest for investors.

In a world where million plus ounce resources are becoming increasingly attractive to mid tier and major gold producers desperate for new gold finds, Goldstone have found themselves holding some very prospective ground and it comes as no surprise that third parties have expressed an interest (see below re Strategic Partners).

Region Prospectivity:

The Ghanaian projects, of which Homase is the most advanced, is some of the most highly prospective territory in the world. Homase is situated, for example, on the same structure that includes Anglogold’s Obuasi mine which has (including that produced to date) some 42 million ounces of gold. Also nearby are half a dozen million plus ounce projects which can be viewed by visiting the Homase page on the company website.

Historic Mining:

Anglogold Ashanti owned and operated a mine at Homase in 2002/2003, the ore generated was used to provide supplementary feed ore for their Obuasi operation at a reported operating cost per ounce of $220 – 280. This production was undertaken at a time when gold was priced at $320 – 380 per ounce.

Obviously in a time of extremely low gold prices, operation of the mine was marginal with regard to profitability but even factoring in increased operational costs we would expect Homase to be substantially more profitable in today’s $1100 plus ounce gold environment.

Strategic Partners:

In their 9th April STATEMENT RE. SHARE PRICE MOVEMENT (click here to view), the company confirmed “In addition, as announced on 22 February 2010 the Company is in discussions with an industry participant regarding a potential strategic alliance which could include an equity subscription into Goldstone”.

They have a number of prospective licences, one of which has now yielded a maiden JORC resource. Going forward, short-term exploration costs appear to be controlled and central overheads moderate, putting them in a strong position with regard to strategic partnership negotiations and any future fund raising as required.

One other thing....

It is important to remember that the above relates to just the one project in Ghana (Homase) and the company has another Ghanaian gold project (Manso Amenfi), a Senegalese gold project (Sangola) and applications pending for additional permits in Gabon. So what upside should we add for those elements?

In reality......

Now of course, it would be a bit optimistic to expect an AIM listed explorer to simply leap up to much higher valuations immediately, but the potential and value is now clearly defined. And, recognising all the above factors, from a value investor’s perspective, we feel that 5p a share or a £6.5 million market cap should offer considerable upside potential.

We will be following Goldstone Resources very closely over the coming months and expect to report on developments as the story develops. In the interim we trust the Q&A session with Dr Hendrik Schloemann and this brief assessment have proved useful. If you have any comments or feedback please email us at info@miningmaven.com

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed are those of the author and unless otherwise stated, should not be construed as being made on behalf of any featured Company. From time to time Mining Maven principals may or may not take an equity position in the said companies. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate. All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Mining Maven content, is expressly prohibited without the prior written consent of Mining Maven. However, linking directly to the Mining Maven blog is permitted and encouraged.

mining maven content by mining maven is licensed under a Creative Commons Attribution-Non-Commercial-No Derivative Works 2.0 UK: England & Wales License. Permissions beyond the scope of this license may be available at http://www.miningmaven.com.

Red Rock Resources: Migori Economics!

2010-04-27T07:12:00.000-07:00

Red Rock updated the market yesteday with new sample results from the Migori gold project in Kenya (click here to view).

It seems that good progress in being made on the ground; quoting one line from the announcement, which should encourage investors:

"The results confirm the economic potential of the tailings, and the existence of further exploration targets suitable for early follow-up in the eastern license and at Nyarongi"

We asked Chairman Andrew Bell if he could expand on the news for the benefit of investors. Here's what he had to say:

MM:. Can you give our readers a brief overview of the significance of this update from Migori?

AB: In 1982 a Kenya-based company conducted sampling and metallurgical testwork at the old Macalder tailings. Some work was said to be carried out in Kenya, some in Australia, and some at Imperial College. In 1985 Mackay and Schellman quoted these results in some work they produced, but had not been able to source the original data. That was three years later, and they couldn’t track down the details. So in 2010 it is impossible.

We ran some numbers on the conclusions as to volume, grades, and recoverability, using today’s metal prices, and hypothesized just under $200,000,000 of recoverable metal.

But this was as we recognized quite unreliable. There was no alternative to going back and redrilling, resampling, doing cross and long sections, doing metallurgy, and coming up with figures that could be relied on and a process path that would enable us to implement the recovery of the metals. This is what we have done.

So far the figures for base metals agree quite well with the old figures. The copper grades reported by previous work in the calcine dumps looked unrealistically high, and our figures are lower, but still good. The sulphide copper figures agree well, our cobalt readings are a bit lower grade, especially in the sulphides. Also our zinc is a bit lower, which is an artifact of the upper detection limit of 1% in our ICP test: this factor means our calcine tailings copper grade is slightly low too. Overall there is good agreement, which increases slightly our confidence in the rest of the work done at that time.

The other results, which are encouraging, show that we are already identifying areas outside those already explored where we think we can identify and prove up mineralization to add to the resource base.

MM: Can you also comment on the significance of the results for the Hand-grab samples collected at new BIF-related targets in the Eastern license?

AB:The results as we say are positive, and the Eastern license has been underexplored and the old mines there only mined to a certain depth because of the higher water table. The potential around the very old mines, in a couple of places, is clearly very good. The BIF model and our excitement at finding our hypotheses confirmed is something we shall enlarge on in our next announcement which is coming shortly.

MM:Investors would hope that at some stage that the company may be able to generate revenues from the extraction and sale of the base metal content identified. Would you say the results indicate there may be content of economic significance in this respect and if so, what would the extraction and sale procedure involve and what timescales would you envisage?

AB:We are impatient and are looking actively into installing simple gold production plant and into tailings treatment. How soon? As fast as we can possible do it: this is our priority. We have to await metallurgical testwork on the tails, and are sampling the gossan and some surface areas. I anticipate that we shall extract gold and silver as well as the other metals from the tailings, but the optimal process route is actually what our metallurgists will be working out.

MM:We note that the results for the gold and silver content from the tailings are still awaited, will you be reporting them them separately to the market and if so when do you expect this would be?

AB:This is a different set of tests. It should not be long. We expect them to be good so of course we want to announce the moment we can.

MM: How do today's results add to your confidence in the overall economic viability of the Migori project going forward?

AB:I would be a little surprised and disappointed if we could not make an economic project out of treating the tailings, and do so within a short space. That creates the prospect of cash flow, and cash flow will help exploration and development proceed faster. I would hope that the tailings treatment, and, separately, a small gravity plant to treat surface gold, would themselves make a very viable project. But their development would not detract from, but assist, the continuing effort to build up a major resource by exploration along the length of the belt.

Goldstone Resources: Q&A with Exploration Director, Dr Hendrik Schloemann

2010-04-22T23:31:00.000-07:00

We have been monitoring Goldstone Resources (AIM:GRL) very closely in recent weeks. After emerging from a difficult few years the company has recently morphed into a pure gold exploration company with some territory in the most highly prospective areas of the world.

By highly prospective we are talking about Goldstone’s two projects in Ghana and a project in Senegal. In all three cases the projects are in known gold exploration and mining zones and, notably, all three are located close to a number of multi-million ounce gold projects.

More importantly, in the case of the Homase licence in Ghana, the company also has a project previously drilled extensively a few years ago, the data for which the company was able to acquire with the project. This has enabled Goldstone to develop a JORC compliant resource which it announced to the market yesterday (click here to view).

We contacted the Exploration Director, Dr Hendrik Schloemann with a few questions and give him the opportunity to expand on todays news for the benefit of investors.

Here's what he had to say:

MM: Can you expand a little on the significance of today's JORC announcement?

HS:We have been pleasantly surprised by the fact that 81% of the resource is in the indicated and measured categories. The higher valuation and measure of confidence ascribed to such a resource as opposed to a majority inferred resource is not something we expected at this early stage. What’s interesting is that it appears that the market does not understand the different values ascribed to the categories and the measure of confidence one can assume for a measured resource as opposed to an inferred resource.

MM: What do these results contribute to your understanding of the resource?

HS:The fact that 81% of the resource was classified in the indicated and measured categories and that the ore is within 200 meters of the surface indicates that an enlarged resource can potentially be exploited by open pit mining methods. Before we however start to think of scoping studies we would have to upgrade the resource to at least 600,000 ounces or more. Given the obvious exploration targets below the present resource and along strike, this is a realistic aim. Under the pit high grade ore shoots were identified and, following the geological Obuasi model where present day mining activities have reached a depth of close to 2000m, these shoots are likely to extend to larger depths. The continuation of the mineralisation along strike is indicated by a gold in soil anomaly. Both targets will be the focus of future exploration.

MM: What does the planned Homase exploration programme entail and what is the broad timetable for completion?

HS:The first exploration step will an airborne geophysical survey (subject to board approval) which is suitable to survey zones of higher conductivity in the rocks below far below the surface. One has to understand that the mineralised rocks at Homase are more conductive then than other rocks in the area. Therefore the survey will allow us to see to what extent and where the high grade ore shoots continue to depth. Drilling will be targeted at higher conductivity zones which connect to known high grade ore shoots close to surface and will comence this year.

MM. Is Homase the priority for Goldstone Resources and to what extent are you planning to conduct exploration at Manso Amenfi (Ghana) and Sangola (Senegal)?

HS:Homase currently is our flag ship project and we’d concentrate a lot of attention to it but at the same time we believe that Manso Amenfi and Sangola are extremely exciting prospects that beg to be worked on. Both these projects would require, comparatively speaking, less funds for exploration but could yield early indications of prospectivity.

END

To download the latest analyst research note on Goldstone Resources, click here

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed are those of the author and unless otheriwise stated, should not be construed as being made on behalf of any featured Company. From time to time Mining Maven principals may or may not take an equity position in the said companies.

Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of Miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Mining Maven content by mining maven is licensed under a Creative Commons Attribution-Non-Commercial-No Derivative Works 2.0 UK: England & Wales License. Permissions beyond the scope of this license may be available at http://www.miningmaven.com.

Range Resources PLC: Q&A follow up

2010-04-09T00:36:00.000-07:00

Mining Maven notes the latest update from Range Resources (click here to view). Oil and Gas exploration is not, as they say, for widows and orphans; but as the story unfolds we continue to see a strong business model developing.

We recently conducted an open Q&A session with Range Resources (AIM:RRL, ASX:RRS) where readers were invited to put their questions to the Company. (click here to view). The session generated a high level of interest and helped provide investors with some useful information regarding the company’s activities.

With so much expected to be happening at Range Resources, investors are no doubt keen to seek a more in-depth understanding on the progress being made. In this respect, there have recently been a number of material developments.

The Texan discovery is now generating sales through the company’s 25% stake in the project, thus the progression to oil and gas producer status continues. The successfully completed rights issue, combined with existing funds will enable the company to progress its Georgian oil and gas projects and its flagship Puntland interests, which is targeting multi billion barrel targets in Puntland, Northern Somalia.

Lots to talk about, and to assist investor discussions, we felt it would be a good time to fire across a few quick questions to Pete Landau, Executive Director of Range Resources. It appears we timed our enquiries well, coinciding as they do with yesterdays update.

So here are the questions Mining Maven sent to Range Resources, together with their answers. Thanks to Pete Landau for participating once again!

Note: You will come across some technical terminology in this and other related articles. If you would like to research technical terms further, a good starting point is http://oilgasglossary.com/

Texas:

MM: With regard to the existing Smith1 well can you explain why you are proposing to fracture stimulate and comingle the two zones and what this process entails? Will fracturing and comingling help improve the flow rates? Do you have any ultimate flow rate targets, in this regard, from Smith1 well?

PL: Yes - ultimate target is between 9-11mmcf per day and 650 - 950 bbls per day - fracing and opening up zones are pretty standard procedures.

MM: You are planning to drill additional wells within the licence area. How likely is it that additional wells be situated in areas with gas and oil?

PL: The second well will be an appraisal well located approximately 700m from the Smith #1. The well is expected to add reserves and production while helping to delineate the overall size of the reservoir.

Georgia:

MM: Could you briefly explain how drill targets are identified from the seismic data? Is this a desktop exercise or is this combined with on-site work in the field?

PL: A combination of everything we have data wise to date - historical work (wells, geochem etc) and now the processed and interpreted seismic (when available Q2) - no more "on-site" work is required.

MM: How attractive is Georgia as a location for investment and, if this was an option you chose, how would you go about identifying suitable farm-in partners? Would this be primarily through existing connections or would you consider other means such as opening a data-room for third parties to consider?

PL: Already at least 5 other oil and gas companies operating in Georgia (producing). If the oil potential is demonstrated through the seismic process - farm in partners will be available mostly on the basis on how good the oil potential is (as opposed to Georgia as an attractive investment location). PSA terms are very reasonable and the country holds multi billion dollar pipeline infrastructure already.

Puntland:

MM: We note that the first Puntland well is due to be drilled in Summer 2010. We understand there are various preparatory stages leading up to spudding a well. Could you briefly summarise the key stages? Will you be able to provide updates to market during the preparatory process and also after spudding, on a similar basis to that provided by the company for Smith1 drilling?

PL: Stages will include:

- confirmation of drilling contractor and tying up of associated logistical support;

- rig mobilisation;

- delivery of equipment into Puntland;

- site / camp establishment;

- spudding of well etc .

We will try and provide as comprehensive updates as possible, but with Africa Oil as operator we will have to take our lead from them.

MM: Could you briefly explain the process you are following to secure partners for the Puntland offshore programme?

PL: First and foremost get agreement from the government on offshore psa terms and conditions. Once in place can then move to a list of potential partners (many already briefed and have expressed interest) with terms sheet and programme regarding stage 1 seismic program on targeted areas

We would be most interested to receive feedback from readers, including any aspects you feel it would be good to cover in future articles etc. Please send these to info@miningmaven.com

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The author holds shares in Range Resources

Regency Mines: Chairman's comments on Lake Johnstone update

2010-04-07T06:35:00.000-07:00

Regency Mines (AIM:RGM) announced to the market an exploration update on its Lake Johnstone Greenstone Belt project (click here to view). We took this opportunity to ask Chairman Andrew Bell to expand on this for investors. Here's what he had to say:

MM: Could you expand a little on the significance of today's update on the exploration program at the Lake Johnstone Greenstone Belt.

AB: As can be seen from the aerial photographs showing the planned drill locations, these are working farms. There is cover over the whole area, with no rock exposure. It is therefore very different from a lot of the places we are used to exploring. Here, geophysics is the first tool, followed by geochemistry.

But that only gets you so far. Then you have to drill, and only then do you discover whether there is anything there or whether your geophysics has given you false positives – anomalies that are meaningless from our point of view, because they could come for example, in the case of our drilling, from salinity or siltstones.

So you don’t initially do a full drill programme, but drill short holes to find out how much cover there is over the rocks, and what rocks they are, as well as, naturally, what they contain.

In this case we wanted to test the hypothesis in the south at target 1 that we had the jerdacuttup fault system, trending east-west, on which the Tropicana gold lies, and so the boundary between the yilgarn granites and the Albany-Fraser metamorphics to the south. In the north at targets 3 and (as an afterthought) 2 we wanted to test the hypothesis that the anomaly was in greenstone and potentially associated with nickel mineralisation.

At target 1 we encountered the geological boundary as hoped and in ten holes encountered sulphides associated with the Albany-Fraser migmatites, schists and shales.

At target 3 we encountered 1 km of greenstones under 30m of cover with some sulphides. The recent airborne geophysics that had hypothesised the extension of the greenstone belt under cover southward to this area seems validated.

So now we see what the samples tell us, and then we drill, we expect, more and deeper. Will there be something exceptional from these first phase 1 samples? Odds against. Will there be something worth pursuing? Reasonable odds. So far it looks promising and our geophysics and geology team can feel quite satisfied.

MM: You noted that the exploration programme successfully completed its objectives, encountering the geologies sought. Could you explain, in simple terms, what geologies were targeted, how these were encountered and how this helps demonstrate the potential mineralisation in the areas targeted?

AB: As stated above, Target 1 was an EM anomaly on a NE-SW strike, which is across elevation and the N-S strike of the greenstone belt. Tropicana 570k to the NE along the Yilgarn Craton margin has SE dipping mineralisation along a gneissic/schist contact. schists can provide this kind of moderately conductive and broad EM target, so as long as we were not picking up a paleaochannel or a siltstone stratigraphy, we were in with a chance. Anglogold to our east has a continuation of our anomaly.

The drill lines were designed to drill across any SE dipping structure. Target 3 was on a non-conductive magnetic ultramafic anomaly 7 km long. This all needs to be drilled to crystalline basement, but initial drilling was to test regolith for near surface disseminated cobalt/nickel mineralisation and to test margins for gold/copper.

Our geologist commented after conclusion of the drilling: “ if the assay results come back with strong mineralisation a new frontier will be opened up……………...

If mineralisation is weak, the geology remains robust and points to a new frontier with a mineralising system carrying sulphides otherwise not expected and that would put the discovery into the realms of jv consideration with a major”. Either way, i call this progress.

MM: How much has this work increased your confidence that the license area may host a gold deposit, particularly since referencing the similarities to the nearby Tropicana JV project, which appears to share a similar structural system?

AB: Anglogold, who own Tropicana, have pegged most of the geological boundary along the fault. The new understanding that comes from the Tropicana discovery has led to much excitement and a new exploration paradigm. All the ground is pegged, either by Anglogold, or by Teck, or by the Newmont JV. Except for what we have. We had it for the North-South greenstone belt not for the Tropicana-style potential, but in fact the boundaries of cratons are often fertile exploration ground. This is at the south of the yilgarn; for example, at the north boundary of the yilgarn there is another new exploration model, following Sandfire’s copper discovery at Degrussa.

We like also that our position is just west of the western junction of the two major East-West faults that bound the Albany-Fraser metamorphic zone – which mirrors the position of the Tropicana discovery, to the East of the eastern junction of these faults. Perhaps this is a coincidence, of course. But establishing that we have exactly the right rocks, and exactly the right geological boundary, running through our license is a great positive.

MM: Could you also expand a little on the significance of references to the proximity to Ravensthorpe site.

AB: The area is one known to host significant nickel deposits, of more than one type.

MM: Could you outline the next steps in the exploration program at Lake Johnstone.

AB: We will continue, we expect, with phase 2 drilling. If something exceptional appears, it may speed things up. We will also be looking to explore our very prospective area at Kambalda, an important nickel mining centre where we picked up an old mining license next to a producing mine.

MM: The price of nickel appears to be gaining strength. Do you see this as a continuing trend and if so how could this impact the economics of Regency's nickel projects going forward?

AB: Nickel is one of the most sensitive metals. It seems to over-correct in both directions. A year ago people were negative about platinum: the auto industry was on its knees, recovery would be slow, etc. Now people could hardly be more bullish, short and long-term.

Similarly a few months ago with nickel. No recovery in 2010; maybe a small recovery in 2011. How wrong they were. Chinese stainless steel demand is rising. Two thirds of nickel goes to stainless steel, which i call the middle class metal, because you use it in fridges and aircons and motorbikes and cars: everything an urban dweller uses. China will continue to see up to 25m new people joining the urban economy each year, and people continuing to save and buy consumer products in a highly aspirational society. Nor should the other highly populous developing societies of Asia and South America be ignored: they are following the same path.

Nickel will be a continuing bull market: I am convinced of it. The basic supply and demand situation is favourable, and we like this metal particularly and fashion will find us. When it comes to laterites and Mambare, we want to steal a march over other people by focussing on technology, so that we can be a leader. But shareholders already know what we are doing there. We will speak more of this soon, but we wanted shareholders to focus for a moment on what else we have. soon we will be encouraging them to focus on our nickel at Kambalda too.

MM: Finally how do you view the development potential of Lake Johnstone when compared with the company's lateritic nickel project at Mambare?

AB: The problem with sulphides is a different one: finding them! With laterites, like Mambare, we know they are there, and the problem is delineating, measuring, selecting the best zones, looking at the cobalt levels for potential credits, and finding suitable metallurgy. If we find nickel at Lake Johnstone, or quite possibly gold, it will be time to think of development potential.

Perhaps the issue will be overtaken by a gold discovery, and we will all be talking about the development potential of that.

Meanwhile, yes, the potential of Mambare is so large that it cannot easily be compared with anything else. We have to do more drilling to extend resource, and find the really high-grade pockets, and we have to advance on the corporate front.

Project Area and Structural Map graphics

http://www.rns-pdf.londonstockexchange.com/rns/7438J_1-2010-4-6.pdf

http://www.rns-pdf.londonstockexchange.com/rns/7438J_2-2010-4-6.pdf

Maps of Magnetic Image

Target 1

http://www.rns-pdf.londonstockexchange.com/rns/7438J_3-2010-4-6.pdf

Target 2

http://www.rns-pdf.londonstockexchange.com/rns/7438J_4-2010-4-6.pdf

Target 3

http://www.rns-pdf.londonstockexchange.com/rns/7438J_5-2010-4-6.pdf

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Red Rock Resources: Half Year Results

2010-03-31T14:45:00.000-07:00

Red Rock Resources has released its eagerly anticipated interim statement and accounts for the period ending 31st December 2009 (click here to view).

We expected them to be good, so what were we looking for? Specifically, enhanced valuations in the investment portfolio and a positive forward-looking statement from the Chairman – Andrew Bell did not disappoint on either count! In fact he even produced a nice cherry for the cake, with the expectation of a maiden dividend, subject to all going to plan between now and the Company's year end, in June 2010.

Shareholders will know that Red Rock Resources is growing its business by developing raw ground into potentially valuable exploration assets, generally farmed out into new listed vehicles in which the company then retains a material stake. These holdings are in quoted companies and therefore have a readily quantifiable market value.

As value investors, we will always keep a keen eye on the value of such holdings and at this stage in the game, that is what’s driving value.

But as impressive as the accounts were, they only reflect valuations on investments at the half year stage, as of 31st December 2009. Yes, that’s just three months ago, but at the pace this business is growing, three months might as well be three years. So what about those (rather significant) events that occurred after the balance sheet date?

In his statement Andrew Bell makes reference to post balance sheet events and the marked improvement in valuations. So we decided to take a closer look at the status of “available for sale financial asset’s” at the start and end of the period, and then lined them up against the current state of play. Here’s how it looks:

Red Rock’s main tradable holding consists of some 93 million shares in Jupiter Mines (ASX:JMS).

With its recently announced transformational deal to acquire 49.9% of the Tshipi Kalahari Manganese project, Jupiter has impressed the markets. As noted, in the interim report, the share price has risen from 19.5 cents at the end of December 2009 to 28.5 cents as of today – a rise of some 46%, worth an additional £5.1 million on Red Rock’s Net Assets Value

Can this rate of growth continue? The company would not rule out further rises, as Jupiter bulks up to become a major player in the steel feed business. Quoting from the Chairman’s statement:

“We support the transaction, which has the potential to make Jupiter one of the world's dominant manganese producers and though it is the first substantial transaction by Jupiter, we believe and hope that it will not be the last."

So back to valuations and although we can’t be absolutely precise here, (as we don’t have access to the detailed balance sheet analysis), at today’s quoted prices we can extrapolate an approximate value for ‘available for sale financial assets’ totalling some £17.4 million, worth around 3p per Red Rock share. So the value of the tradeable assets underpin the current share price and then some.

Any uplift in the Jupiter share price would feed through to Red Rock’s NAV at the rate of AU$930k per point, Resource Star at a more modest AU$136k and Cue Resources at CA$98.9k.

So as value investors we are really quite comfortable with the investment case as it stands, and lets not forget that at current prices, you also get a stake in the 1.2m ounce gold resource at Migori for free!

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Ariana Resources: New Exploration Targets

2010-03-25T07:49:00.000-07:00

This morning, Ariana announced geophysical test results from their Kisiltepe project in Turkey (click here to view). We took the opportunity to put a few quick questions to MD Kerim Sener. Here's what he had to say:

MM: Can you expand a little on the significance of today's news?

KS:This news represents an expansion of our geoscientific knowledge at the Kiziltepe prospect. In particular it has confirmed that there is potential for the discovery of new vein systems in a region of the prospect that was hitherto underexplored. This particular area had no veins outcropping but hosted a region of extensive quartz float, that could not be explained by surface erosion and transport. There was no other indication in this area for buried vein systems, partly due to extensive ignimbrite cover in the northwest and thin alluvial cover in the southeast, concealing any existing veins. The only way to test the geophysical results is by drilling, which is starting with immediate effect.

MM:What do these results contribute to your understanding of the resource and what do they mean in the context of the proposed JV.

KS:The results have confirmed that the Kiziltepe prospect potentially comprises a much more extensive vein network than considered at the time of its acquisition. Obviously drilling must be completed before we know the extent of any potential resource increase through the identification of new vein systems. With regards the JV it was important to complete this geophysical survey before the feasibility-level planning for the siting of mine infrastructure such as the processing plant, tailings dam and waste rock dump. We certainly wouldn't want to site the plant over a potential buried vein!

MM.Have the results added to the potential scale of the exploration area?

KS:Absolutely, we have to wait on our drilling results but the potential is now there for the further exploration of other anomalous zones in the region in addition to those visible in outcrop.

MM:What does this drill programme entail and what is the broad timetable for completion?

KS:We intend to drill a fenceline of short holes in the area of coincident anomalous rock chip geochemistry (up to 21.1 g/t Au) and high resistivity. This fenceline is designed to identify in-situ quartz veins and/or their related alteration, to confirm the presence of a vein system at depth. At a later stage, and assuming the results of this first phase are positive, we would need to follow up with deeper exploratory holes. Another area which will be drill tested now is the point at which the Arzu and Derya structures disappear through ignimbrite cover rocks. This area shows coincident resistivity and intermittent chargeability anomalies in geophysics and other geological evidence suggests the presence of a buried vein system.

MM.How does this additional information add to your confidence in the viability for Kiziltepe to be a source for production, going forward?

KS:Within the margins of error acceptable in a scoping study we are already confident in the viability of the resource. The scoping study was undertaken independently of Ariana by a reputable international firm with prior experience in mining projects in Turkey and it yielded positive results. The new geophysics adds an element of further belief that the Kiziltepe resource will only continue to grow with further drill testing.

To subscribe to Ariana Resources company updates, click here

To view the latest 2010 presentation from Ariana , click here

To view Kerim Sener's Mining Journal feature on mining in Turkey, click here

Previous Miningmaven articles on Ariana Resources

27th February A Piece of Turkey in the heart of Mayfair!

3 January 2010 Ariana Resources: Buy me a Gold Mine in Turkey!

30 January 2010 Ariana Resources: Going for Gold in "Turnkey" Turkey

10 February 2010 Ariana Resources: Lets get this show on the road!

18 February 2010 Ariana Resources: Limbering up for the Main Event!!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Copyright © miningmaven 2010

Webcast: "The Global Infrastructure Opportunity"

2010-03-23T04:57:00.000-07:00

Thursday 25th March 4.00pm UK time

US Global Investors, the progressive investment firm headed up by acclaimed fund manager Frank E Holmes, is holding a free to access web event on Thursday 25th March dubbed "The Global Infrastructure Opportunity".

If you are serious about investing in the resource sector, you wont want to miss this event. Research can be time consuming, but this accesible webcast will fast track you to some of the smartest minds in the sector. We therefore urge all our readers to take advantage of this opportunity. It starts at 12.pm Eastern Time (4pm UK time), but you will need to sign up in advance (to go to the sign up page click here)

"There are 6.7 billion people living on the planet today, and the population is growing. Growth in emerging markets and the shift of population to urban centres is creating greater demand for resources, services and infrastructure.The estimated needs for infrastructure spending are staggering—trillions of dollars across the world to develop water, energy, transportation and telecommunication infrastructure.

How can you take advantage of these infrastructure investment opportunities?

U.S. Global Investors invites you to participate in this engaging free webcast discussion with members of the portfolio management team for our infrastructure fund, the Global MegaTrends Fund. Also joining the webcast will be special guests from Macquarie North America, a firm that specializes in infrastructure advisory services."

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Jupiter Mines: CNBC speculative buy - the cheapest way in!!

2010-03-19T03:25:00.000-07:00

Jupiter Mines was tipped today as a speculative buy on CNBC today. Red Rock Resources holds 93 million shares in Jupiter Mines, worth AU$28m (£16.8m). Red Rock's entire market cap is currently £12.7m. As our American friends would say - do the math!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Copyright © miningmaven 2009

Red Rock Resources: Migori Update

2010-03-15T04:23:00.000-07:00

We took the opportunity to put a few quick questions to Andrew Bell regarding todays update (click here to view). Here is what he had to say.

Drilling Campaign Update:

MM.Can you give our readers a brief overview of today’s update on Migori?

AB. The update is about unfinished business from the old drilling, and some work in progress. This just says steady as she goes, and the tailings info is coming.

MM. Were the Kansai Drilling (2007) assay results in line with your expectations and what will this information contribute to your understanding of the resource?

AB.We need the re-analysis of the old work to begin incorporating this data in a go-forward plan. An experienced ex-Newmont gold geo who knows the project will be available after Easter – we can easily spend money going off at half cock but the more time on analysis, the better, and the more expert the analysts, the better. These holes and other post-2004 holes are not incorporated in the resource yet. So there is built-in upside.

MM. You have noted that the data is being reviewed and analysed with the intention of generating a revised NI43-101 compliant resource estimate. How is this going to proceed now.

AB.We need to keep tight control of this project. The original 43-101 writer has died – we want the new gold geo to assist the new person at the same firm. But we are starting talking. The key is to reassemble carefully all the backing information so we can build on what we have.

MM. Your regional prospecting seems to have identified some interesting targets. Could you elaborate on the prospective value of the new targets?

AB.There is huge potential especially in the east. We find so much old info on this and we have over 60km here so we need good people to control the follow up. We cannot charge full speed at every prospect, but we think we have isolated 2 priorities. If we can just show BIF ‘potential’ that is enough for now.

MM.Would you say the latest results add to your confidence in the case for production at Migori ?

AB.Yes. We need to get a handle on the open pittable resource and on the trade-off between more work on the existing areas and work on prospective new resource areas. We need to make sure we conduct exploration in such a way that we never ‘disappoint’ with a set of bad results. Our new geo joining us who has written on the area before is quite confident.

To view Migori simplified geology map click here

To see latest Value Proposition click here

Go to Videos to see the recent interview with Andrew Bell

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The Author holds shares in Red Rock Resources PLC

May We Recommend??

2010-03-13T09:24:00.000-08:00

In the wake of the Global Financial Crisis, a plethora of books have hit the market. In time, some may well turn out to be seminal pieces, though most would argue that it is still too soon to tell.

One book which has certainly recieved much critical acclaim is This Time is Different: Eight Centuries of Financial Folly by Carmen M. Reinhart & Kenneth Rogoff. We have now included it in The Miningmaven Book Store at Amazon, and they are running a special price promotion on it, so well worth a look!

Here's how the sleeve reads:

Throughout history, rich and poor countries alike have been lending, borrowing, crashing--and recovering--their way through an extraordinary range of financial crises. Each time, the experts have chimed, "this time is different"--claiming that the old rules of valuation no longer apply and that the new situation bears little similarity to past disasters. This book proves that premise wrong. Covering sixty-six countries across five continents, This Time Is Different presents a comprehensive look at the varieties of financial crises, and guides us through eight astonishing centuries of government defaults, banking panics, and inflationary spikes--from medieval currency debasements to today's subprime catastrophe.

Carmen Reinhart and Kenneth Rogoff, leading economists whose work has been influential in the policy debate concerning the current financial crisis, provocatively argue that financial combustions are universal rites of passage for emerging and established market nations. The authors draw important lessons from history to show us how much--or how little--we have learned.

Using clear, sharp analysis and comprehensive data, Reinhart and Rogoff document that financial fallouts occur in clusters and strike with surprisingly consistent frequency, duration, and ferocity. They examine the patterns of currency crashes, high and hyperinflation, and government defaults on international and domestic debts--as well as the cycles in housing and equity prices, capital flows, unemployment, and government revenues around these crises. While countries do weather their financial storms, Reinhart and Rogoff prove that short memories make it all too easy for crises to recur.

An important book that will affect policy discussions for a long time to come, This Time Is Different exposes centuries of financial missteps.

Having read Liars Poker by Michael Lewis, (which Punch regards as one of the best business books of all time!) we note he also has a new title out shortly, The Big Short: Inside the Doomsday Machine which by all acounts is set to be another classic.

Heres what they have to say.

"The Big Short" tells a story of spectacular, epic folly. It has taken the world's greatest financial meltdown to bring Michael Lewis back to the subject that made him famous. His international bestseller "Liar's Poker" exposed the greed and carnage of the City and Wall Street in the 1980s; he wrote it as a cautionary tale, but people seem to have read it as a how-to guide. Now, he wants to settle accounts. In this visceral tour to the heart of the financial system, Michael Lewis takes us around the globe and back decades to trace the origins of the current crisis. He meets the people who saw it coming, the people who were asleep at the wheel and the people who were actively driving us all of cliff. How could we have all been so deluded for quite so long? Where did it all start? Was it systemic? Was it avoidable? And who the hell can we blame? Michael Lewis has the answers. No one is better qualified to get to the heart of this labyrinthine story. And no one can make it such an enjoyable ride along the way.

Finally we thought it might be a good time to re-visit our review of Michael Coulson's An Insider's Guide to the Mining Sector: How to Make Money from Gold and Mining Shares, which was originally posted in January this year. So if you are new to Miningmaven, or the sector here it is again:

Whilst engaged as a trainee Chartered Accountant a partner in my firm told me ‘there is no substitute for quality education and training’. How true.

But then why is it many investors buy and sell shares in Mining and Exploration Companies without really understanding the ins and outs of the commodities involved, the intricacies of exploration or the downright practical difficulty of developing a mine after that blockbuster exploration discovery.

In truth the reason is quite simple; that’s what investors generally do. For those that buy banking shares how many understand interest rate swaps, complex derivatives and collateralised loans? For those investing in pharmaceutical shares how many fully comprehend the stage I, II and III clinical trials? And for technology shares, how many investors can truly grapple with the complexities of the technology in which their companies are engaged??

So it stands to reason that a better understanding of the sector could or should place the average investor at something of an advantage to the wider market. And by wider market I include not only the private investor, but many professional investors, brokers and other market participants as well.

The Miningmaven blog is focused on the Private Investor and our mission is to make the sector more accessible to the average investor by providing common sense commentary and sources for additional research. So where would be a good place to start for all PI’s looking to bolster their knowledge of the Mining and Exploration sector?

We think we may have found the answer in this very easy to read book written by Michael Coulson .

Author:

Michael Coulson has been working with the Mining Sector for over three decades, working within banks and brokers and from 1975 to 1991, producing an annual gold review. His work in recent years has revolved around the provision of independent research for smaller broking outlets who themselves lack the particular in-house expertise.

Review:

This is our first Miningmaven book review so we have decided to look for three essential features in all the titles we identify, namely:

-Breadth of coverage;
- Ease of reading;
- Tools that investors can use in the markets.

Coulson’s book scores well in all three areas. Whilst accessible to all, it is clearly written with the novice in mind. He starts with a non-technical industry overview looking at Mining Countries, Major Industrial Metals (e.g Copper, Zinc, Lead, Nickel etc); Precious Metals; Minor Metals (e.g. Cobalt, Tungsten, Magnesium etc) and Non-Metals (i.e. coal and uranium). He explains each metals industrial usage and place in the market and a special section is given over to an analysis of Gold, which with many investors seems to be a key point of focus.

On top of the commodities and the geopolitical risk of the countries where the exploration and mining is conducted, there is the subject of markets, and Coulson deftly addresses this in a decent review of London, Jo’burg, Sydney, Toronto and New York. No mean feat in just twenty pages!!

He then moves on to a review of mining shares, covering smaller stocks through to the larger organisations. How to build a portfolio; awareness of stock market cycles; understanding company announcements and how to value mining shares.

Now that’s all well and good but many investors are aware of a few horror stories and rags-to-riches tales. Here too Coulson doesn’t disappoint where his look at the Bre-X scandal and the Poseidon Nickel bubble make compelling reading.

Wrapping up the book with additional sources of information and a ‘take-away’ ten key points, Coulson delivers a thoroughly engaging and insightful read. Essential for those who are serious about making money from investing in the sector - not to mention the need to avoid a personal financial disaster by making the wrong decisions.

I keep my copy next to my computer and usually refer to it more than once a day. For around the cost of a one-way trade, it could prove to be one of your better investments for 2010.

Needless to say you can purchase this title and many more at The Mining Maven book store.

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Red Rock Resources: Driven by Jupiter!

2010-03-07T13:20:00.000-08:00

After quite an eventful week in terms of price action, we saw Red Rock Resources close on Friday at 1.9 –2.15 with heavy trading volumes (13.3m) throughout the day.

This was driven in the main by a strong performance by Jupter Mines overnight in Australia. It certainly seems that the Tshipi Kalahari manganese story has struck the right cord with the market.

No need to remind readers that Red Rock hold 93 million shares in Jupiter mines, which puts Red Rock on a mere AU$931k (or £558k in our own devalued currency) per point.

So last weeks rise in the value of Jupiter Mines shares of 6.5c has added around £3.6m to the value of Red Rock's holding.

It remains to be seen how far Jupiter will run, or indeed if the current price can be sustained. But as stated in our previous post, this means the company can now look to sell down some of its £16.5m holding (at current price) with impunity.

This is just one of the scenarios Andrew Bell pointed to in his video interview with us last month (to view click here). He also suggested that he would not wish to sell down the entire stake in Jupiter, preferring to leave more than a little skin in the Pallinghurst game.

But where Andrew did hang his hat was in his prediction that the moment even a small proportion of the Jupiter holding is sold, it will unlock the current discount to NAV and people will start to see Red Rock in a different light (23 minutes into the video)!

Last week also saw the resumption in trading in Resource Star and if Jupiter’s performance was stellar, Resource Star’s could not have been in starker contrast. 18 months of suspension had clearly taken its toll on some investors as the share price fell around 35% before recovering slightly and stabilising on Friday. The value of Red Rocks 13.4m share holding fell by around £450k accordingly. However we expect events to be news driven here in the short term and as Andrew Bell suggests in the interview, there are deals in the pipleine, so we will have to wait and see how the market responds!

As mentioned in our previous update, we are looking to rework our value proposition on Red Rock to take into account all events to date. However it is clear that much of the action is still unfolding, so its a bit of a moving target right now.

We therefore felt we would do this more justice by first waiting for the company’s half yearly report, which is expected to be released by the end of the month.

Aside from the financials where we expect the balance sheet to show a significant uplift in valuation of assets, we will also be looking to see what the Chairman's statement will reveal.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The author owns shares in Red Rock Resources plc.

Red Rock Resources: Our Finest Hour!

2010-03-02T08:55:00.000-08:00

For the Company's management and shareholders, Monday the 1st of March 2010 will be remembered as the day a new chapter opened in its development cycle. To borrow from one of Winston Churchill's most famous war time speeches, this marks "the end of the beginning" for Red Rock Resources.

The big news (click here to see) came from Jupiter Mines, (ASX:JMS) the Australian miner in which Red Rock are currently 25% shareholder, announcing their intention to acquire a 49.9% stake in the Tshipi Kalahari Manganese project in South Africa, from Pallinghurst Resources (JSE: PGL) and their high profile co-investors.

This deal represents an effective corporate restructuring for Pallinghurst, who, together with their investment partners will end up with around 85% of Jupiters equity. The share-based transaction will be worth approximately A$245m, which will transform Jupiters with exciting opportunities in iron ore and manganese in both Australia and South Africa.

To view the deal presentation click here

After the transaction, Red Rocks stake in Jupiter will be reduced to around 6% of the enlarged entity. However this will also leave Red Rock holding the largest independent stake outside of Pallinghurst and their co-investors.

So why does this deal mark such a seminal event for Red Rock?

Up till now, the successes of the Company's agressive growth strategy have been largely overshadowed by the ongoing need for funding by way of equity placements. But all that changed on Monday.

This deal now opens up an early exit route for Red Rock as its joint venture in Jupiter with Pallinghurst is now completed; thus allowing the company to sell down some of its £15m stake (which, by the way is greater than its entire market cap - currently worth over 2.5p per Red Rock share), without impacting on Jupiters market value.

So with a new route to significant non-dilutive funding available, we expect that long awaited re-rating may shortly be on its way.

Here is an interview Pallinghurst Chairman Brian Gilbertson gave to Bloomberg TV Asia yesterday. One has to admire his patience, given the Anchor's obvious lack of knowledge of both the company's activities and the sector in general. Why she would feel the need to question him on the Rio Tinto Chinese spy allogations is beyond credulity! Mr Gilbertson is obviously a gentleman!

Monday also saw the company's Uranium development vehicle Resource Star finally resume trading after 18 months off the market. Resumption of trading has seen the share price fall by around 25% from the 20c level. Taken in isolation this would be disappointing, but we view the relisting as more of a technical event and expect corporate developments and deals, (as referred to in Andrew Bells previous interview with miningmaven tv here) to be the drivers for value, in short order.

It is little over 6 weeks since we updated our value proposition on Red Rock (click here to see) yet Mondays developments have left it in need of a thorough makeover.

Over the next day or so, we will be putting together an updated value proposition which will take into consideration all the events that have happened in the interim, and we will be looking at where things could go from here. Exciting times ahead!

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The author owns shares in Red Rock plc.

Ariana Resources: A piece of Turkey in the heart of Mayfair!

2010-02-27T11:43:00.000-08:00

The Chesterfield Hotel in Mayfair was the setting for Ariana Resources (LON:AAU) latest investor presentation last Wednesday evening.

Hosted by Proactive Investors, Ariana shared the billing with Western Potash (TSX.V:WPX) who have a “solution” mining project in Regina Canada and Resource Generation (ASX:RES), who are developing a coal mine in South Africa.

Having attended a few of these Proactive events, one knows their success is always dependent on the calibre of company/management presenting and the mood of the room on the night!

This time round the event was very well supported with a lively mix of finance professionals and private investors. To compliment the event, Proactive's Wendy Durham even produced a new in-depth research note on Ariana which is well worth a read (click here to view).

Ariana's MD, Kerim Sener presented the company’s investment case to a receptive audience, though it was clear from the post event conversations that most had not previously heard about the company.

That being the case, with just 30 minutes of stage time, the big challenge was to concisely introduce the company whilst doing justice to all aspects the investment case.

Not as easy as it may seem. Ariana has some very significant irons in the fire; not least of which being the pending Proccea JV on the Red Rabbit project (click here for latest update), so there was always a danger that, depending on how the delivery went, the proverbial cake could have been obscured by a rather oversized cherry!

But with the support of a well-crafted presentation (click here to view ) Kerim managed to talk people through the Ariana story, doing justice to all aspects and giving additional detail as and when required.

So what did we learn?

With the presentation geared towards the uninitiated, the natural starting point was the country itself; Turkey being an economic powerhouse in the region with a thriving gold market, mining friendly legislation, situated on the highly prospective Tethyan Metallogenic Belt...and so on.

All good stuff (click here to view our value proposition on Ariana) and it also served as a good refresher for existing investors. We also noted that good progress is being made with the EGU JV and Ariana’s own ongoing exploration work is all very much on track.

But what about the Proccea JV?

Kerim elaborated on certain details here making a point of commenting on how pleased they were with the results of the project scoping study (estimating a project cash cost of between US$350 and $400 per ounce), the good cooperation with Proccea and the rate of progress.

But one of the more intriguing nuggets we gleaned was that under the terms of the JV agreement, as Ariana continues to prove up more ground within in the Red Rabbit project area, the Company has the right, but not the obligation, to sell the resource into the JV for 3x the exploration cost.

This was a really interesting detail as it gives some background to the principles by which the two parties have agreed to divide the spoils.

In order to prolong the life of the mine, Ariana needs to continue exploration work to expand the resource within the Red Rabbit project area.

But with ongoing exploration work at Ariana’s cost, a formula was needed to provide the Company with an appropriate financial incentive to prove up more ounces for the benefit of the JV.

With this solution, when selling resources into the JV, Ariana will recover all of its exploration costs, plus a reasonable premium on top. And since there is no obligation, only the right, to sell additional resource into the JV, the company would also be free to consider any outside interests, thereby maximising its potential returns. Very reasonable!

With the presentation over the networking began. Ariana had pulled in a full team for the evening, including all the main board directors, as well as their broker from Alexander David Securities. They were certainly in demand as between them they worked the room, collecting and handing out business cards and talking Turkey!

The next event will be the Minesite presentation on 16th March (for details click here)

To subscribe to Ariana Resources company updates, click here

Previous Miningmaven articles on Ariana Resources

3 January 2010 Ariana Resources: Buy me a Gold Mine in Turkey!

30 January 2010 Ariana Resources: Going for Gold in "Turnkey" Turkey

10 February 2010 Ariana Resources: Lets get this show on the road!

18 February 2010 Ariana Resources: Limbering up for the Main Event!!

To view the latest 2010 presentation from Ariana , click here

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The author owns shares in Ariana Resources Plc.

Red Rock Resources – A Value Investor’s View

2010-02-22T05:33:00.000-08:00

As readers will know, Mining Maven’s approach is always from a value investors perspective. Identifying and following opportunities where value is not fully reflected in the current share price.

We usually start with the balance sheet, where very often we find value cosseted in complex project portfolios. But the real opportunities rest in identifying current, not historic value; and this often also requires thorough analysis and careful investor assessment of the Company's up to date plans and prospects.

So, we were rather pleased to note the latest Edison research update on Red Rock Resources (AIM: RRR), which also demonstrates the value which, as yet, the market does not reflect.

In this case, the Edison Investment Research Report (click here to view) indicates that the Company's market cap could be undervalued by up to a bewildering 89%!

The report analyses Red Rock Resources in depth and provides various valuation scenarios, which we recommend readers review for themselves in detail. But their top end scenario indicates a share price in excess of 16 pence reflecting net assets (on the assumptions given) of £93million. Given the current market cap of aorund £9.6m, thats some uplift!

Of course, we don’t anticipate the share price will miraculously leap to 16 pence overnight, however, the pathway to that level has been mapped out within the Edison report and it is clear that as Red Rock continues to crystallise value from various elements of its portfolio, the value of the company could move up accordingly, giving reason for the share price to follow.

Currently valued at 1.625p per share, Red Rock is significantly short of even Edison’s Worst Case, scenario, so if you are after value, Red Rock certainly deserves consideration. Investors may recall that the FT were wise to the undervaluation back in December 09 (click here to read the article).

We don’t have a crystal ball, and to our knowledge neither does Executive Chairman Andrew Bell,; but in the recent Mining Maven TV interview (click here to view), he states Management's target is for the share price to achieve double figures. An aspiration one would expect from company management. Based on with the latest Edison report, perhaps that aspirations could soon be realised.

Other Miningmaven articles & features on Red Rock Resources:

8 February 2010 - Red Rock Resources: Andrew Bell going for gold in Kenya!

3 February 2010 - Red Rock Resources: New funding options??

19 January 2010- Red Rock Resources (UPDATE) - What have Red Rock Resources ever done for us??

15 January 2010 - Red Rock Resources: Growing those Gold Ounces....

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

www.cash4idiots.com

2010-02-21T07:29:00.000-08:00

Well it looks like cynicism is now well and truly permeating through the "cash in your gold" business, which sprung up fast on the heels of the global financial meltdown in 2008.

Complaints and reports of predatory practices are rife and it certainly didn’t take long for the shine to fade. So its no surprise that in January the OFT announced that it would be carrying out an investigation (to read click here ) into the business.

Whilst we await the outcome with interest, the findings are unlikely to surprise anyone.

Of course gold has always performed well as a safety net and a store of value when all around us is falling apart. But since 2008, the gold spot price has remained robust and is now close to its record high; so in order to make a margin in this business you need to be able to buy cheaply - enter Joe Public!

And the cash in your gold merchants now stand accused of praying on public desperation and taking advantage of their lack of knowledge of the true worth of their gold possessions.

But as the economy slowly returns to some degree of normalcy, it looks like the public's need to sell their gold to raise quick cash may also be on the wane. If so, then we could soon start to hear more of about public purchases of gold for savings and investment purposes - which is a growing trend, but one, it would seem, in which the media are not particularly interested - yet.

Here is an clip from a recent Miningmaven interview with Andrew Bell, chairman of Red Rock Resources who are exploring for gold in Kenya. Worth listening to what he has to say about where the price of gold is heading.

To see our recent Value Proposition on Red Rock Resources, click here

Cartoon in the header by:
http://www.dotgif-comic.com/

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Ariana Resources: Limbering up for the Main Event!!

2010-02-18T10:47:00.000-08:00

After our last chat with Managing Director Kerim Sener at the beginning of the month, he certainly seemed confident that things were progressing well on all fronts.

So most Ariana shareholders were no doubt expecting the next news coming out from the Company would be the JV sign off by the end of Q1 – still 6 weeks away.

In the mean time the market had been drifting, with the share price re-testing last summer's lows. All this in spite off the Company’s promotional efforts and ongoing programme of investor presentations. (The next presentation is the Proactive Investors forum on 24th February. Click here for details).

So there’s nothing like a nice surprise update to catch the market off guard and remind investors exactly why they are holding Ariana.

So what is today’s announcement all about? Well to state the obvious, it demonstrates that solid progress towards the JV continues to be made, and more detail and visibility has been provided regarding all the processes the company is undertaking in this respect.

Worth particular mention are the results of the scoping study, which was based on sn envisaged production rate of 150,000 tonnes of ore per annum over a mine life targeted to be greater than 5 years. The study estimated a project cash cost of between US$350 and US$400 per ounce. Although this is only conceptual, it’s a great starting point, and you don’t need to be a mathematician to work out that the difference between the current gold price and the project cash costs per ounce would leave a healthy amount of meat on bone for the JV Company. Anyone care to start speculating on annual production targets?

Of course, prospective JV partners Proccea have done all this before. Through their mining services division CH Consultants, they have designed and built gold production plants in Turkey on behalf of Eldorado Gold, Koza Gold, Anatolia Minerals and Eti Gumus; in addition to various other international commissions.

So what can we take from today’s update? Well it not only provides us with some of the finer details of the work management is undertaking in finalising of the JV agreement; it also demonstrated that they look committed to providing the market and shareholders with as much visibility as possible.

As any investor will tell you, there is no substitute for visibility; the more we are told, the clearer a picture we can start to build. Healthy newsflow also breeds confidence and is the lifeblood of positive investor sentiment.

With the level of visibility demonstrated and improving investor sentiment - from here onwards we expect the share price may well start taking care of itself.

To subscribe to Ariana Resources company updates, click here

Previous Miningmaven articles on Ariana Resources

3 January 2010 Ariana Resources: Buy me a Gold Mine in Turkey!

30 January 2010 Ariana Resources: Going for Gold in "Turnkey" Turkey

10 February 2010 Ariana Resources: Lets get this show on the road!

To view the latest 2010 presentation from Ariana , click here

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Range Resources: Q&A Session with Pete Landau & Anthony Eastman

2010-02-17T00:57:00.000-08:00

Miningmaven.com is pleased to have been able to facilitate this Q&A session with Range Resources plc.

The event was facilitated via a Facebook group event which enabled investors to ask important questions and receive answers directly from the Company's senior management.

Thank you to Mike Adams, Irene Stark, Jeremy Foote, Lloyd Short, Jason Stinton, Bailey Bailey, Paul Stokes and all other contributors, for their questions, thoughts and comments.

We have tried to reflect all queries within the questions asked. To do this some paraphrasing has been necessary in order to produce a broad session with reasonable coverage in all areas.

We would also like to thank Range Resources plc for participating in this new interview initiative. You can subscribe to Range Resources email alert system by clicking here .

We expect this will be the first of many such events, so in order to stay informed and ensure you are invited to participate in all future events, you can join the Miningaven Facebook group by clicking here .

Range Resources is an oil and gas exploration company, listed on the Australian Stock Exchange (ASX: RRS) and the London Alternative Investment Market (AIM: RRL). The company has active exploration programmes in Puntland (Somalia), Texas (USA) and Georgia.

Range Resources responses below have been provided by Range Directors, Pete Landau and Anthony Eastman, with input from Texan consultants – Texas Energy Advisors and the Company’s Georgian partner, Strait Oil and Gas.

Texas:

Mining Maven (MM): You have achieved something quite remarkable with Texas turning a relatively small investment into a material revenue producing asset in just a few months. Could you explain briefly how you were able to secure this stake and how this commercial discovery will be managed?

Range Resources plc (RR): The project was offered to Range when one of the original participants elected not to join in the drilling of the Smith #1 well due to financial fall out from the GFC. Testing, further completion, and production of the well will be managed by the operator, with Range’s management team, Texas Energy Advisors, part of the Joint Operation Committee. Production will commence imminently (weather pending) following the successful completion of the flowline connection to the sales line and revenue will be recognized at the end of each month and payment for production typically lagging by 45 days and distributed by the operator. Following tie up, the next stages will include production rates and independent reserve reports, anticipated to be in the coming weeks. The second well in the field is expected to spud in April of this year.

MM: You announced on the 21st December that the well partners had purchased an additional 560 acres in the North Chapman area to bring the total leased area to 1,680 acres. Could you explain how this was secured, the funding for the purchase and how this additional land will be utilised?

RR: The additional acreage was acquired through standard oil and gas leases from landowners in the area. Range’s contribution was made through existing cash. The acreage both protects the consortium (including Range) from competitors in the region and immediately adds additional development drilling locations. Based on 80-acre spacing, the new leases could result in the drilling of seven additional wells.

MM: Are you looking currently looking for, or examining, additional farm in prospects onshore in Texas?

RR: Not at this stage, Range is comfortable with its portfolio of assets and will only consider new opportunities (anywhere – not just Texas) it they arise through unique circumstances where the Company is starting from a position of intimate technical knowledge of the play. Importantly, there will be another well drilled in the North Chapman field around April 2010 which will benefit from the technical base already established with the Smith #1 well.

Georgia:

MM: Please explain the Georgia programme you are undertaking and when you expect the key milestones to be achieved?

RR: Range and Strait are well advanced in completing Phase II (of III) of the PSA programme (see announcement 17 February 2010).

Key milestones under Phase II:

- A 350km Seismic Acquisition / Processing / Interpretation Program that is designed to lead to the identification of a number of drilling targets.

The seismic acquisition commenced in November 2009 and is due to complete end of March 2010.

- Processing and interpretation of the seismic data will be completed May / June 2010 which should lead to the generation of a number of drill targets.

- Drilling to start - assuming suitable targets identified - in Q4 2010. Whether Range/Strait drills or farms out will depend on a number of circumstances (status of Puntland and Texas projects, interest in Georgia from potential farm-in partners, quality of prospects generated etc.)

There are local groups that are suitably staffed / equipped to drill exploratory wells and bring them into production if commercial discoveries are made.

MM: What evidence do you have that there are, potentially, material quantities of oil and gas within the prospect areas?

RR: These Blocks were well researched during the Soviet period of Georgia's history - 204 wells were drilled for assessing general geology and Oil & Gas. Certain levels of production were achieved. Major development did not occur due to far more significant multi billion barrel discoveries in areas a lot more stable than Georgia at the time. The Georgian wells were abandoned / sealed during the civil war pre the Rose Revolution. The information was reviewed / checked by an Independent Technical Evaluator as part of the Company’s technical due diligence and their findings indicated 383 million barrels of estimated recoverable Oil in Place. An assessment as to the potential Gas in place is currently in progress focussing on the area where previous production occurred.

MM: On the positive assumption that your exploration efforts are productive, please explain the revenue sharing agreement you have negotiated for the Georgia assets?

RR: The Product Sharing Agreement:

- 50% goes to the Cost Recovery Programme in favour of the Company;

- 25 % is returned to the Georgian Government; and

- 25% is 'Profit Oil ' for the Company.

- When Cost Recovery has been achieved the' Profit Oil ' is divided as follows:

- 65% is returned to the Georgian Government; and

- 35% is for the Company.

There are no significant tax issues:

- we have VAT exemption;

- The Company - when in profit - excluding 'Cost Recovery '- will be liable to Corporation tax at 12%

- The Operating Company is non -profit but pays local employment tax on Georgian employees and 4% for foreign ' Contractors / Consultants '- When in commercial Oil production:

MM: Range has more skin in the game with Georgia than Texas or Puntland, by virtue of the participation percentages. Please explain how Georgia will be managed and funded, assuming successful exploration?

RR: Too early to tell, key factors in how to commercially exploit Georgia include:

- Status of Puntland and Texas projects;

- Level of interest (corporately and partnering oil & gas companies) in farming into Georgia (currently at the moment at least 5 other companies operating in Georgia).

- Quality of drilling prospects derived from the seismic programme.

As referred to above, local logisitics and technical management already exists in Georgia.

Puntland:

MM: Is Puntland the major focus of the company going forward and why?

RR: Puntland has been the cornerstone for the Company since it secured the exclusive onshore and offshore exploration rights to Puntland in August 2005. Following the Puntland elections in January 2009, which resulted in a change of President and Government, there was a requirement for a review of the existing PSA’s.

The review was led by Range’s JV partner Africa Oil Corp. and was successfully concluded in December 2009.

There is no doubt that Puntland is still the major focus of the Company, given the potential for a unique world class discovery to be made. Georgia and Texas were introduced as a result of a number of factors (GFC, delays in Puntland etc.) but there is no doubt Puntland is still the driver behind Range.

From Range’s perspective, political risk is very manageable (as demonstrated by the recent change in Government and PSA affirmations) but there will always be greater country / terrorist risk by virtue of the current volatile environment throughout pockets of Somalia.

MM: Please explain why Puntland is geologically an exciting area of operations.

RR: The Nogal and Darin basins are believed to be part of a failed rift system and are considered extensions to the prolific Yemen rift system found to the North across the Gulf of Aden. These two areas were joined approximately 18 million years ago prior to the rifting of the Indian plate away from the African plate. The Cretaceous and Jurassic sedimentary basins in Yemen host estimated reserves of over 6 billion barrels of oil with current production over 400,000 barrels per day.

Several of the targets traps were subsequently drilled, however, only drill data from the Nogal-1 and Kalis-1 holes are available for interpretation. Drilling reports for these two wells indicated that the oil shows were reported in some of the shallower sandstones but the important host, the Jurassic sandstone was not reached. In 1990, the Kalis-1 well was drilled to 5100 feet, far short of the original target depth of 14,850 feet. The Nogal --1 well was also drilled in 1990 and reached a total depth of 10,736 feet.

Following Africa Oil's successful acquisition of 775 kilometres of 2D seismic in the Dharoor Block, prospects for 2010 drilling are being finalized. Preliminary interpretations indicate the presence of robust prospects which have the potential to contain large reserve volumes.

MM: Please describe the expected Puntland programme and when the key milestones should be reached for investors.

RR: Africa Oil has commenced operations with an intention to spud the first exploration well by July/August 2010, followed by a second well in approximately November 2010. Leading into the spudding of the first well, you will have rig mobilisation and site establishment – April through June 2010.

Offshore negotiations are ongoing with a possible agreement timeline of Q2 2010.

MM: Please outline the costs Range will face with regard to the Puntland programme in the coming year and how will the company fund their contribution?

RR: Upon completion of the rights issue, Range will have covered its costs associated with the first well. Second well, Range may be fully covered (possibility of AOC moving Nugaal carry into Dharoor depending on well programme, Texas cashflow, corporate play with Georgia etc.), however too early to tell.

Range is still free carried for the next US$17m to be spent on Nugaal. Range contributes their 20% interest in Dharoor.

MM: How committed are Africa Oil with regard to their Puntland interest and how are they likely to take this forward?

RR: Cannot emphasise enough Africa Oil’s commitment to Puntland, spent circa US$40m to date and assembled one of the best drilling / technical teams available for Puntland. Managing risk (by looking for farm-out opportunities) and questioning management commitment are two very different issues. Range will not comment on Africa Oil’s behalf other than stating Range is 100% supportive of their commitment, efforts and ability in Puntland.

MM: Please outline progress with regard to Puntland Offshore and specifically the likely process and timescale to securing a possible farm-in partner?

RR: Following the successful completion of negotiations regarding the onshore licences and previous technical presentations to the Government on the proposed offshore areas of interest, Range will look to continue negotiations regarding the formalisation of a new PSA with respect to the exploration and development of offshore Puntland in Q2 2010. Range has had a number of discussions with interested parties; however the current focus is a PSA terms sheet with the Government followed by joint venture talks..

General:

MM: Could you provide more regular updates to your shareholders concerning operation progress / timelines for significant news releases?

RR: Range updates shareholders with all material events on a regular basis, as and when these material events occur. To combat rampant speculation the Company would almost have to provide daily updates. Importantly, any material information is immediately released to the market in accordance with ASX Listing Rules.

MM: Can you provide some transparency on the holdings in Range Resources by directors and connected persons?

RR: Under ASX and Corporations Act requirements, all directors’ holdings and any movements are disclosed. Any on-market buying is very difficult due to the operation of insider trading rules and Directors being in possession of price sensitive information. All directors have in the past taken, and will take up, their entitlements in full under the rights issue

MM: Range Resources has suffered from a number of historical and well publicised difficulties, not least the extensive dilution to existing shareholders. How do you intend to win back the confidence of current and prospective Range Resources Investors?

RR: A year ago Range’s only asset that it held was its interests in Puntland. Following unavoidable delays and a change in Government in early 2009 (as mentioned above), the Company sought opportunities to diversify its asset base and mitigate the risk associated of being only a ‘one asset’ Company in a volatile region, hence the successful completion of the Georgian and Texan deals.

Range believes that the current portfolio of assets has established Range as a well diversified junior oil & gas Company, providing shareholders with exposure to low risk short-term cashflow through Texas, all the way to enormous upside through its Puntland interests.

It is now up to the Company to deliver value from the current portfolio of assets, with 2010 being a very exciting year for the Company. Forecast activity for the year includes:

- First production on Texas and subsequent further development during the year;

- Completion of 350km seismic program in Georgia that will potentially lead to the identification of drilling targets, with the possibility of drilling late 2010.

- First well spudded onshore Puntland in over 16+ years, followed by second well late 2010.

In short, confidence will only be obtained through delivery of commercial success from the activities summarised above. Also note that commercial success based upon known prospectivity should equate to a market capitalisation many times greater than the current market capitalisation of the Company.

MM: Please summarise Range's Resources short term opportunities and describe the medium to long term future (2-5 years)?

RR: Whether it’s short, medium or long term focus, there is only one driving factor, maximise shareholder value / returns. How this is ultimately achieved depends on the circumstances on any given day. One thing which is certain, the Board or its individual Directors are not driven by ego or empire building and have all had a serious level of exposure in listed resources plays (globally) to assess maximising returns and mitigating risk. The focus will still remain with oil & gas.

END

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Horizonte Minerals: Nickel and Gold Explorer – it’s all there if you look close enough!

2010-02-11T07:48:00.000-08:00

The technical verbiage in exploration updates can often overwhelm, sometimes leaving us with more questions than answers. But fortunately Jeremy Martin, Chief Executive of Horizonte Minerals prefers a less complicated style of writing, so it was with relative ease and interest we note the company’s latest news release.

However as keen followers of resource stocks will note, explorers can be a cautious lot; preferring not to get investors overexcited at an early stage and leaving themselves hostage to fortune. That’s why one always has read such updates extremely carefully, paying great attention to all the detail.

If you just gave the announcement a cursory glance then you could easily have missed some key points. So here are some thoughts.

Firstly, we recognise that investors are yearning for crystallisation of value, and with the Lontra Nickel project due a JORC resource calculation by mid 2010, this looks like it could now be on the way!

Work here has been delayed by rains which is disappointing, but short of acquiring an industrial strength umbrella the size of Hamburg, there’s not much else the company could have done. We also note that, to complement drilling plans, the company have now engaged well respected lateritic Nickel expert, Roger Billington, which we see as a good endorsement for the project and will complement the successful metallurgical test work already undertaken to date.

In short, the company clearly views Lontra as a serious enough project and management are now demonstrating how they intend to work towards transforming it into a valuable asset.

This stage in Lontra’s development is a somewhat reminiscent of African Eagle’s progress with their Dutwa nickel project. With the scale of the resource potential and meticulous approach the company is taking, they may well achieve similar results with Lontra – at which point talk of value creation would be on a whole new scale.

Ah, but secondly there is Tangara, which many investors see as a bit of a dead duck.

This is something we find rather anomalous. Before Tangara was farmed out to Troy Resources there had been a successful period of exploration by carried out Horizonte. Troy started off by focusing on new areas of the licence and before one starts to bemoan their results todate, one also needs to consider the value of the original exploration work carried out by Horizonte.

And why do Troy Resources keep pursuing this apparent dead duck? Because, as outlined in today’s announcement, they are now actively developing new targets within the main project area. In today’s environment companies don’t sink funds into drilling programs without a good reason. So with Troy bearing all exploration cost and a free carry for Horizonte, we can afford to have an optimistic expectation of better fortunes ahead or, in the words of Wilkins Micawber, ”something will turn up!”.

And then thirdly there’s the Anglogold Alliance. This is where we sat up and really started to take notice. There is nothing to get the heart racing like seeing the phrase “significant anomaly” jump out of your screen. Significant anomalies are great, but then we read “we are confident that as this develops there is the potential for discovering numerous targets with scalability for a major gold discovery”....

...and then we read this “New concessions have been applied for covering this target and follow up work is underway to advance the anomaly to define drill targets.”

So there you have it, and the reason why the term “significant anomaly” news was gently lowered into the announcement earlier on.

Could they have found something material already? Could be. But as previously mentioned, exploration companies are prone to circumspection and whilst Jeremy might like to make more of the such an important significant development, there is always the hostage to fortune issue; not to mention the need to satisfy the nominated advisors who scrutinise all market news releases. They will no doubt have ensured he erred on the right side of caution in this case.

We will be keeping a very close eye on developments here in particular. Its early days yet, but we believe this has all the hallmarks of a major new find in the making.

So in summary:

- Slight delay to Lontra Jorc due to rains but confirmation of technical expert appointment and clarity on revised programme;

- Tangara evidently still alive (even though some would argue to the contrary);

- The Anglogold alliance is working and dare we say it may have found something interesting – watch this space;

- LGA work progresses successfully.

A great mix. Solid underlying value from the Nickel projects and blue sky potential from Gold. Keep your eyes on that Anglogold alliance in particular!

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Ariana Resources: Lets get this show on the road!

2010-02-10T07:38:00.000-08:00

You certainly wouldn’t know it by looking at the share price, but Ariana Resources is gearing up for the next leg of its publicity road show!

We recently had a chance to speak to Managing Director Kerim Sener and he was extremely upbeat about his forthcoming trip to Turkey which includes development meetings with prospective joint venture partner Proccea. This JV will see Proccea investing $8 million in return for a 50% stake in Ariana's gold development project, dubbed "Red Rabbit", in order to to fast track it into full production.

Whilst understandably, he wouldn’t be pressed on a likely date for signing the JV (I quote “ we said we expect to complete in Q1 and its all going very well” ), Kerim will be returning to the UK for a Proactive Investor one2one presentation on 24th February and he is most keen to see a good turn out, so he can meet shareholders new and old, and bring everyone up to speed with the Ariana story.

He also suggested that healthy news flow can be expected going forward, both market news and also through regular shareholder updates. This will be of particular interest to those who like to keep an ear close to the ground and track progress. To this end, the company has also started using the Twitter site. We love Twitter - it has had a big impact on Miningmaven, bringing in new followers from around the globe. Many North American juniors use it, but we think Ariana is the first AIM junior to join. To follow Ariana on Twitter, click here

Keeping shareholders close and staying in touch looks like becoming a priority for the company going forward. However, whilst most shareholders use nominee accounts these days, it is not always easy or even possible for companies to find out who their shareholders actually are.

Bearing in mind the expected developments and news flow, this is somewhat frustrating for Ariana. They want to communicate directly with shareholders and understandably so. In this respect the Company have expressed a desire to forge strong relationships with all their shareholders and would like see more people joining their mailing list on the website. They invite you to sign up for news updates through this priority link here.

We are also looking forward to the presentation on the 24th and very keen to hear news on the JV. If you haven’t already had your invitation for the presentation, you can register here.

Roll on the 24th of February!!

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Red Rock Resources: Andrew Bell going for gold in Kenya!

2010-02-08T23:52:00.000-08:00

SCREEN TOO SMALL? ENLARGED VERSION here

Red Rock Resources: Andrew Bell going for gold! from Mining Maven on Vimeo.

To view the latest Miningmaven Value proposition quoted in this interview click here
To view the latest commentary on Red Rock news click here

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What’s eating Jon Nadler?

2010-02-07T06:45:00.000-08:00

Those who follow gold closely will be equally familiar with Jon Nadler, the gold commentator with a profoundly negative stance - who also just happens to be the senior analyst for Kitco the Canadian internet gold site and bullion dealer. Yes folks, the voice of Kitco, who issues daily commentary on their behalf, is so consistently negative that he has earned the title “The Tokyo Rose” of Gold analysts!

For those who follow the sector, this will come as no surprise. But for newcomers, just imagine the football (thats what we call "soccer") editor of The Sun continually criticising the game and telling people to stop watching live matches because at these prices, there are far better things to spend your money on .

Bizarre as that may sound, it is parallel to the commentary Nadler is putting out on the gold market; and coming from someone in his position, it all seems rather surreal.

If you are a commentator in the gold business and your paymasters are bullion dealers, how could your views be considered independent? And some may assume you could even be conflicted in your interests....

Not that this bothers Nadler!! Kitco give his commentary pole position on their site and in return he very eloquently talks down the gold market on a daily basis.

I was reminded of Jon Nadler's surreal role whilst listening to this interview today on King World News with John Embry from Sprott Asset Management. A highly successful investment strategist, he has a fundamentalist approach to Gold and the gold market, having lived through the 70’s gold bull run, he certainly knows how many beans make five.

He doesn’t buy Nadler's stance for one minute. Quoting Eric King, paraphrasing Jon Embry:

“as long as Nadler keeps getting press, it is reasonable to assume we are a long way from the end of this bull market in gold”

As the interview reminds us, people often forget or put to one side, the possibility that those in a position of influence are also in a position to “talk their own book”. So if Nadler is indeed talking his own book, then that would suggest Kitco are angling for sellers rather than buyers, which would then indicate their long term efforts are focussed on sustaining the supply side, rather than the demand side of their business - and if that is the case, then suddenly Nadlers position starts to make sense.

Perhaps this is a cynical view, but in reality could Nadler's game perhaps be nothing more than an upstream version of those "cash in your gold” TV campaigns? Who knows!

The interview is well worth a listen (click here to listen) ahead of what promises to be an interesting week for the precious metals.

You may also want to hear Ted Butler's take on last week's trading activity and his opnion that we may be at or near a bottom in the Silver & Gold markets– now where have I heard that before? Certainly not from Mr Nadler!!

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Red Rock Resources: New funding options??

2010-02-03T03:04:00.000-08:00

As Red Rock shareholders will realise, the company's holding in Jupiter Mines has the near term potential to dwarf its current market cap (mention in the FT article here) . But as any reader of John Steinbeck’s ‘The Pearl’ will attest, having something of significant value doesn’t necessarily mean you can readily realise its true worth. And if you are limited in terms of who you can talk to, then the process becomes even more constrained. You need the flexibility as well as the knowledge.

We therefore note with interest the latest developments from Red Rock Resources who, this morning, announced the end of their Joint Venture Agreement with Pallinghurst. This Joint Venture saw the companies working together to vend assets in exchange for stock in an enlarged Jupiter Mines.

In 2009, Red Rock vended various assets into Jupiter and in return, became Jupiter’s largest shareholder with a holding of 93million shares, around 25% of Jupiter's overall share capital. That shareholding, as we highlighted in our recent Value Proposition, is currently worth around £11million or nearly 2p per Red Rock share (not bad considering the entire company trades at 1.55p mid, and that includes all the other assets thrown in for nothing).

So the announcement today effectively marks, the successful conclusion to the venture with Pallinghurst and the end of the pre-emptive rights they had over Red Rock’s stake in Jupiter Mines. This is significant, because until this point, Pallinghurst were effective gatekeepers of Red Rock's stake, thus limiting potential market interest.

So from now on Red Rock has the flexibility to talk openly with others who may be keen on acquiring a strategic stake in Jupiter Mines.

Bearing in mind that most of Jupiter's stock is tightly held by Pallinghurst, their partners POSCO and others including more recent arrivals on the share register, Hancock Prospecting. So anyone after a decent sized stake will find their options severely limited.

On another level, an intriguing consequence of this development will see Red Rock's voting power and therefore influence in Jupiter increase. This may well come in handy should Pallinghurst wish to divest one or more of their assets in whole or part into Jupiter. (Brian Gilbertson speculated on this potential in their last investor presentation - well worth a listen). In this event Pallinghurst would not be able to vote, but of course with Red Rock now free from their concert party arrangements with Pallinghurst, their shareholding represents a significant control block.

So with what looks like a new window for funding about to open, what would be the reaction if Red Rock were to sell just 10 of their 90 million shares at the current price of 20c, raising £1 million? This would certainly be sufficient to cover development plans for Migori Gold, Zambian Manganese and just about anything else in the pipeline for some time to come.

Of course the immediate ability of Red Rock to release value from the Jupiter holding is exciting stuff. But what if that’s just a side show?

The conclusion of the Joint Venture with Pallinghurst suggests to us that plans are afoot for another step change in activities at Jupiter Mines and we will be watching Jupiter news feeds with keen interest. It seems clear that Pallinghurst have plans to turn Jupiter into a major steel feed business. And at its market cap of just A$80million it is still a minnow. That may all be about to change and positive news on this front could improve the Jupiter share price and, with a growing market cap, the ease through which existing holder can realise a return on their investment when required.

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Ariana Resources: Going for Gold in "Turnkey" Turkey - 2010 Presentation

2010-01-30T08:45:00.000-08:00

At the beginning of January we presented a value proposition for Ariana Resources, the Turkish gold developer which has its sights on near term production through a 50/50 joint venture with Proccea a major Turkish engineering and construction firm.

We also noted that under the prevailing market conditions during 2009, the company elected to spend most of the year focussed on corporate and operational activities, putting on hold their promotional efforts until such time as the market would be more receptive and perhaps even even up for a punt!

So for Ariana's management, the new year kicked off with a presentation on Wednesday to the Association of Mining Analysts, which by all accounts was well received. The schedule of presentations and exhibitions is set to continue throughout Q1( for a list of the events planned click here ) which also looks likely to be a period of active news flow.

However, for shareholders, there is one piece of news which is eagerly anticipated, and thats the finalisation of the Proccea JV agreement, which will mark a transformational event for the company and will see Ariana firmly on its way to its goal of near term gold production in Turkey.

To view the latest 2010 presentation from Ariana , click here

To view the Miningmaven value proposition on Ariana (03/01/10) click here

http://www.arianaresources.com/

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Edison Gold Report 2010 - How to Value those Ounces in the Ground

2010-01-28T06:16:00.000-08:00

As regular readers will know, when reviewing gold miners, we have often paid tribute to the Edison Research gold report from October 09. This report analysed 41 companies listed on the London market and provided a weighted average metric for attributing a value to their measures, indicated and inferred ounces in the ground.

This was the first time a report of this type ( directly focussed on the value of ounces in the ground), had been seen during this market cycle and it provided investors with a very useful tool for research and reference purposes.

We are therefore delighted to see than Edison have now updated their research and expanded their coverage to include 132 gold companies (with a combines resource of 2 billion ounces) in each of the four major global mining finance centres - London, Canada, Australia and Johannesburg.

The new report is now able to compare valuations not only within, but also between the four major markets.

As far as valuations are concerned, the story hasn’t changed all that than much (that said, "indicated" ounces in London have had a bit of a filip - up from $30 to $159 per ounce!). But with the coverage now going Global, it will certainly have a much broader reach.

We think it makes for very worthwhile reading and if you appreciate the Edison valuation metric, you will no doubt find the extended cover even more relevent (you may want to link this into your favourites). The conclusions drawn should not come as any surprise either. As the report title suggests: Gold - Valuation Benchmarks are obsolete!

To see the full Edison report, click here ; Gold - Valuation Benchmarks are obsolete!

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Shanta Gold – Going back to the seventies??

2010-01-25T07:24:00.000-08:00

We spend a fair amount of our time scouring the mining and exploration sector to find golden nuggets or, more to the point, mining and exploration companies that have real potential value that is not yet fully articulated in a company’s market capitalisation. There are quite a few around, but it’s fair to say that some stand out more than others...

So this mornings news from Shanta Gold (AIM:SHG) reminded us of another potential nugget in the rough and we thought we should make a few preliminary comments. We hope to find time to look more closely at Shanta Gold in the near future and bring you a full Value Proposition for the company.

Shanta currently sits with a JORC defined Gold resource of some 2.6million ounces. Within this 1,504,205 ounces are inferred, 633,693 ounces are indicated and 480,546 are measured (figures taken from the Shanta website click here for a direct link

Now at this very early stage we have two specific points to make and these are, we think, worthy of further consideration:

1. The resource covers three project areas and appears to be substantial and by all accounts capable of further material increase going forward. In particular the measured resource of 480,546 ounces interests us. We often draw on the Edison Gold sector report, which suggested that, on average, measured resources should make up a value of $381 per ounce in the market capitalisations of Explorers. If Shanta were to be valued on the basis of $381 per measured ounce would equate to a capitalisation of $183million or £113million (that is £1.08 per share). We know that is a simplistic calculation of course and further analysis of resource geology, cut off grades, mining potential etc, are all required;

2. The company has, during 2009, stated an intention to develop mining operations within their exploration areas. In particular, in their 2.11.09 news release they note that a Mining Licence application has been submitted to the Zambian authorities in respect of the Chunya project. This announcement also notes an initial capital cost of just $5million for a gravity and carbon in leach ore treatment plant.

It’s worth mentioning that Shanta Gold reached the heady heights of seventy pence plus per share in mid 2006. Could it return to that level again? Perhaps. The measured resource theory above suggests this could be feasible. And the added bonus of potential near term producer status will be a major attraction for investors.

As a result we need to look a bit deeper and we suggest perhaps readers also research this stock sooner rather than later.

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JP Morgan behind last weeks precious metals sell off?

2010-01-23T07:31:00.000-08:00

Once again Ted Butler puts an interesting spin on what yanked this weeks precious metals trading so hard to the down side - $2 off silver and $50 off gold.

Could this have been a set up by bank shorts in the wake of the historic CFTC position limits meeting on 14th January??

A link to the webcast of the meeting is provided below; be warned its two and a half hours long and rather heavy going. The questions are a bit more interesting, when they start talking about precious metals around 50 minutes in…

http://www.capitolconnection.net/capcon/cftc/011410/cftc-archive-wmv.htm

In a nutshell, this CFT met on the 14th January to discuss the introduction of position limits (mainly affecting short positions) in the Energy markets on the COMEX , the outcome of which would also inevitably impact on the precious metals markets. At the moment the big banks are not limited in the size of the positions they can take, so with unlimited funds available to them, they can effectively swamp the markets with speculative shorts. Thats the theory anyway.

Do you buy the possibility that JP Morgan and a few other big banks actively work to suppress PM prices on the COMEX?? Ted Butler certainly does and according to him and many of his readers, President Obama’s speech last week was a clear call on big bank manipulation of the precious metals markets on the COMEX.

According to Ted, if you have to look for a reason as to why the precious metals we down sharply on the week, "you look to the Comex and you look to JP Morgan". Have a listen to the interview linked below to hear his rationale.

Ted butler is an internationally renowned Precious Metals analysts and has been researching the precious metals markets for over 30 years. His Butlerresearch LLc news letter has been going for many years in the USA.

Todays interview with Ted Butler on King World News is less than 10 minutes. Well worth a listen.

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Jim Rogers - Commodities in a Bubble??? Are you crazy???

2010-01-21T07:44:00.000-08:00

This is a great little interview on CNBC Asia with Jim Rogers. Watch his reaction to the suggestion that commodities are in a bubble.

Seems he is too much of a gentleman to tell the CNBC Anchor what he really thinks of that question!

Feel free to add your comments below.........Enjoy!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Copyright © miningmaven 2009

Red Rock Resources (UPDATE) - So what have Red Rock Resources ever done for us???

2010-01-19T07:30:00.000-08:00

Remember the scene in the movie ‘The Life of Brian’, where Reg (played by John Cleese) the leader of the Peoples' Front of Judea (not to be mistaken for the Judean Peoples' Front!) asks his followers the question “What have the Romans ever done for us”? Then, after an exchange where the supporters outlined the many things Rome had provided, he retorts with; “yes but apart from the, sanitation, medicine, education, wine, public order, irrigation public health, etc etc etc, what have the Romans ever done for us”?

So it’s true of Red Rock Resources (AIM:RRR). Despite a period of amazing development the question still persists; “yes but apart from investments worth far in excess of market cap, potentially enormous future royalties, a 1.2million ounce gold JORC in an African gold project near production, etc etc, what have Red Rock Resources ever done for us”?

Here’s the problem (perhaps); the market mistakenly thinks Red Rock Resources is an investment company and that’s a BIG BIG mistake, I think.

In fact it’s that bad that I have an image of Andrew Bell leaning out of his boardroom window at 115 Eastbourne Mews shouting, “We are not an investment company!!” You get the point.

So here perhaps we have a simple case of mistaken identity. Your typical micro cap explorer would never be mistaken for an investment company. They usually operate in a one sector (e.g. gold exploration), in a narrow geographic region and under one corporate vehicle. So the market ticks the box marked “Junior Explorer” and all is well with the world.

But what if your business is a more sophisticated animal and not so easy to categorise? The Market would then need to pay more attention and dig a bit deeper to get a better understanding - but markets move fast and are not exactly known for their application and attention span.

So here’s where you run the risk of being mistaken for your closest look-alike. And in the case of Red Rock Resources (AIM:RRR) that would be a “Mining Investment company”. Which brings us back to Andrew Bell’s big challenge – how to get his message across to the market – RRR is not an investment company – well not as such!

So you have to have some sympathy. Since floating Red Rock off from Regency Mines (AIM:RGM) in 2005, he has continually been working his proprietary brand of alchemy; identifying exciting mineral resources, driving them up the value curve and then crystallising value by hiving them off into discrete tradable packages whilst retaining a significant/controlling stake.

These entities are spawned, nurtured and grown to the point where they can operate as standalone projects. They are in all the right sectors (steel feed, uranium & gold) and they all have huge growth prospects built into their DNA. Oh, and they also end up in self-funding tradable vehicles, which should the markets permit, will appreciate in value independently of the main business. Does that sound like the remit of your typical mining investment company?? Not exactly!

That’s the business model, or the main part of it. So what does the market think? Well as I said, it really doesn’t know what to think. It looks at the company at any moment in time, scratches its head and just sees the holdings as generic constituents of an investment portfolio. It then fixates on distressed valuations for the component parts, and accordingly attributes the generic discount to NAV.

So, despite a portfolio which includes a 25% holding in an ASX listed Iron Ore company, which alone is worth nearly £11.8 million, Andrew’s company has a total market capitalisation of just £8.2million (on 23/12/09).

Welcome to the frustrating world of Andrew Bell, Chairman of Red Rock Resources!

The undervalued assets brush is tarring much of the mining and exploration sector right now. But not many can boast a potential 81% discount to NAV (according to the latest Edison Research update on the companies website). Such extremes make this a most suitable candidate for the value investors slide rule. It must have made an impact as The Financial Times even picked up on the story last Friday

One thing is certain though; when such micro cap stocks do finally get their message across, they can attract enormous interest and the re-rating process can be quite dramatic.

That said, one area where the company has been recently criticised has been its use of a rather inventive instrument called a SEDA (Share Equity Distribution Agreement). This can be a dual edged sword. It gives the company an effective £3m line of equity funding and cash can be raised on a flexible basis, albeit at a discount to the prevailing market price. Great news if you on the look out for distressed assets, as indeed are Red Rock.

However, as a shareholder one has constantly to run the gauntlet of market sentiment and the latest placing, raising just £120,000 (at 1.3p) for the company and incurring just a 2% dilution, seems to have triggered a mini sell-off which saw the share price fall back from 1.9p a week ago, to just under 1.5p at close on Friday 18th December. This occurred just at a time when the share price looked set to breach the 2p line in the sand. Yes, a week is a long time when you’re a Red Rock shareholder!

The company will hopefully be super cautious about raising more funds through this route in the future, although funds raised to date have purchased some exciting and arguably exceptionally under-priced assets.

So what is so special about Red Rock Resources? Or put it another way “What has Red Rock ever done for us?”

Well let’s break the ‘portfolio’ down (apologies Andrew for repetition of the investment term ‘portfolio’) and try to identify where the current market cap is detached from the inherent value within the business.

Jupiter Mines (ASX:JMS)

You will need to travel back in time to the July 2005 admission announcement to find first details of the company’s options over Mt Ida, Mt Hope and Mt Alfred, three iron ore tenements in the Central Yilgarn area of Western Australia. Thereafter it was a long road of development the salient elements of which are captured below.

Red Rock transferred Mount Ida, Mount Hope and Mount Alfred tenements (and also Oakover Manganese tenements) into Jupiter Mines in a series of transactions that completed in the summer of 09. This provided Red Rock with a 25% holding in one of the larger Iron Ore/Manganese explorers on the Australian Securities Exchange (ASX). Interestingly the other major holders read like a who’s who of the steel feed business and include Brian Gilbertson's Pallinghurst Resources who own a similar size stake to Red Rock. Korean steel giant POSCO has a strategic stake and even Hancock Prospecting’s name has now popped up on the share register (Hancock is run by Aussie Billionairess Gina Rinehart, daughter of Iron Ore magnate Lang Hancock).

The current share price of Jupiter Mines stands at 22.5c meaning the 93 million shares owned by Red Rock are worth A$21million or around £11.8million. That alone equate to 2.13p per Red Rock share.

Those with a finger in the steel feed business seem to think that Jupiter Mines is unlikely to contract and in 2010 very likely to expand apace. On this assumption the share price of Jupiter Mines could experience significant upward momentum which would be great for Red Rock where every cent on the Jupiter price adds another half a million pounds to Red Rock’s NAV. Now that’s what you call leverage!

One could say that alone would be enough, but Red Rock has many more goodies in its “portfolio”. On the transfer of Mount Ida and Mount Hope into Jupiter, Red Rock also negotiated 1.5% gross production royalty for all production from the prospects (i.e. 1.5% off the revenue, no deductions – and no buy outs!). Not bad but what does that really mean? Well Jupiter helped us there by recently releasing a conceptual model showing a conservative estimate of 1.1 – 1.3 billion tonnes of magnetite ore at Mt Ida. This is before the high-grade magnetite areas have been explored and thus is likely to be revised upwards in the fullness of time.

So there appears to be a very substantial ongoing royalty payment that will flow to Red Rock if one assumes production starts at Mt Ida. And, for the sake of clarity, that royalty is on top of the stake Red Rock holds in Jupiter Mines itself!

Just one more thing; on the transfer of Mt Alfred into Jupiter in November 2008 the agreement specified that were Jupiter to define an Iron Ore JORC in excess of ten million tonnes at Mt Alfred, the excess would be multiplied by $2 and the cash amount translated into shares to be split between Red Rock and Pallinghurst. So, say they defined a resource of 50million tonnes, the cash amount would be A$80million which if we assumed at that point Jupiter Mines were valued at 50c per share would give Red Rock another 80million shares. Another good reason why Jupiter should want to see their share price higher than it is right now!

The magnitude of the Jupiter transactions are not easy to quantify precisely, but they certainly point towards enormous upside potential for returns to Red Rock through its direct holding, the royalty from Mt Ida and the bonus option from Mt Alfred.

Brian Gilbertson's Steel Feed Corporation (SFC) strategy in the Jupiter Investor Presentation September 2009 is well worth a listen

Resource Star (ASX:RSL)

Red Rock currently owns approximately 24% of Resource Star, which, in line with its business model, it originally acquired by hiving off its Uranium Assets into the business.

Originally an online business called Retail Star, Resource Star has taken its time to galvanise and get moving. The global economic crisis and evaporation of funding for uranium juniors was much to blame, preventing the company raising sufficient funds at the time to really make progress.

It seems all this imminently set to change. Resource Star, currently suspended, is due to relist on the ASX in January 2010 and is in the process of raising $4.4million at 20c per share.

The company has Uranium and Rare Earth prospects in Malawi and Australia and has just signed a deal with Globe Metals and Mining (ASX:GBE) whereby Globe can earn up to 80% of the Machinga rare earth project in Malawi, subject to certain expenditure and progress commitments, leaving a nice 20% free carry there for RSL.

On relisting, Red Rock will secure an additional 3million shares at 20c each in settlement of outstanding loans and other contractual commitments to Resource Star. That should equate to around 21% (13 million shares owned) of the entire business post fund raising, representing a healthy stake in an ASX listed company in the Uranium and Rare Earth sector.

Cue Resources (TSX: V CUE)

Cue Resources, a Toronto Securities Exchange (TSX) listed Uranium explorer has a 100% holding in the Yuty Uranium project in Paraguay. But Cue is more than just an explorer, they have a resource of around 10m lb of uranium in-situ, and significant exploration upside potential, according to Uranium Investing News .

Known for speculative investing, on 2nd November Red Rock announced they had purchased the thick end of 10 million shares in Cue Resources in a private placement, giving the company a near 16% stake. The placement also carries a 1 for 2 warrant entitlement which, on a fully diluted basis, would increase the stake further.

Shortly after this announcement an interesting development occurred. Red Rocks largest shareholder & parent company Regency Mines announced that they had purchased a further 4.2 million shares in an off market transaction, giving the concert parties between them approximately 23.01% of the capital, on a partially diluted basis and after the exercise of warrants held by Red Rock, approximately 34.50% of the company’s share capital – forming an effective control block..

The holding reinforces Red Rock’s interest in value Uranium plays but also stokes speculators to consider what Red Rock might do with this holding. Perhaps ultimately this is destined for the Resource Star stable or maybe it was just a great value proposition to be held and disposed of when the market better reflects the value of Cue’s assets some way down the road. Either way, Red Rock has secured a healthy stake in another exciting area and ‘watch this space’ definitely applies.

Chiwefwe (Zambian Manganese)

Oh Chiwefwe?? Once the darling of the Red Rock portfolio it has gone very quiet recently.

Talk of a substantial manganese resource a couple of years ago was further supplemented by an eagerness to enter production at Chiwefwe through a processing deal with a local operator. An agreement was struck in August 2008 for further exploration and ground acquisition and at one point all this activity was suggesting material value was being created in the Zambian territory.

However, we haven’t heard much more about Chiwefwe since the Final Results announced in December 2008.

The smoke signals seem to indicate there may be some activity again in this area of the portfolio and, if this proves correct, it could signal a resurgence in the importance of manganese once more in the Red Rock mix. But with other activity in the forefront and Management time at a premium, it would be best to adopt a wait and see approach here.

Migori (Kenyan Gold Prospect)

So apart from Jupiter Mines, Resource Star, Cue Resources and Chiwifwe, what has Red Rock Resources ever done for us? ……well how about adding a nice 1.2million ounce gold resource to the portfolio? This resource, at Migori in Kenya, is quantified at the “indicated” level with some actually “measured”; which demonstrate a higher level of certainty that a resources at the “inferred” level.

Red Rock really have created a nugget of value here. On 17th September 09 they announced the acquisition of 15% of the Migori project and the right to increased that interest to 60% by completing a bankable feasibility study within 6 years.

On 30th November Red Rock announced the purchase of 10 million shares in Kansai Mining (direct owner of the Migori Licence area), and then on 3rd December announced they had acquired an option over an additional 29 million shares taking their holding up to 39 million shares or 35% of the company’s entire share capital.

It is worth noting that the 35% stake was purchased for just $400,000, which given the size of resource at Migori, has to be considered something of a bargain. As with the Mt Ida transaction Red Rock has also secured a two way interest. In this case it can build up direct project ownership at Migori and also retains a 35% interest in the entire Kansai company.

Going by the company's 23rd December AGM presentation, Migori is set to be in the forefront of activities for 2010. Also worth noting is the stated intention of Red Rock to fast track the Migori project into production at the earliest opportunity. The prospect is considered to be amenable to a low cost open pit mining operation with a low stripping ratio. Initial indication suggests they expect cost effective production to be achieved without too much difficulty.

On 14th January 2010 the company announced an update on Migori stating that once results are in from the drilling 2009 campaign, (which will also include additional samples taken from the previous operators interrupted program), the company will start to carry out a revision of the NI 43-101 resource estimate. By carrying out a revised NI 43-101 resource estimate, the company will be not only targeting an increase in the size of the resource, but also looking to move more of the resource up from the indicated to the measured category.

Whilst Red Rock has to let Jupiter Mines get on with business, the ardent stated focus of the company is now Migori and no doubt there will be further exciting developments to come here.

Many Investors expect 2010 will mark the turning point for Red Rock, where the rewards of Andrew’s hard worked business strategy start to flow back to the company. Until then, his biggest challenge will no doubt be to convince the market that Red Rock is much more than “just” an investment company.

For our part, miningmaven will be following this company very closely in the New Year, and if expectations are met, shareholders will certainly be looking on the bright side of life!

So in summary Red Rock Resources has given us:

- A major stake in Jupiter Mines, a leading Iron Ore and Manganese explorer in Western Australia, currently worth £11.8million or 2.13p per share. Also the potential to increase that holding substantially at no additional cost should Mt Alfred prove up a resource in excess of 10 million tonnes;
- A substantial potential royalty stream from Mt Ida Iron ore production through their 1.5% gross production royalty;
- A 21% stake in Resource Star an ASX listed Uranium and Rare Earths exploration company;

- A 15% stake in Cue Resources a TSX listed Uranium exploration company;

- A stake in Zambian Manganese at Chiefwe (currently under the radar but the latent potential remains);
- A major stake in the Kenyan Migori gold prospect, with a stated desire to enter production at the earliest opportunity;

- A market cap of £8.2million which is at a one third discount to the value of the Red Rock holding in Jupiter Mines.

Example Risks (not comprehensive):

- Exploration work fails to identify economic deposits;
- Country/Regulatory risk;

- Financial risk (sufficiency and stewardship of working capital and investment capital in particular);
- Commodity price exposure;

- Key person exposure (risk of losing key members of the team).

Company information:

Red Rock Resources : AIM:RRR
Website: http://www.rrrplc.com/
23rd December AGM Presentatation
AIM Rule 26 Information
Shares in issue - 566,353,142
Market cap (08.02.10) - £8.04million.

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.
The author owns shares in Red Rock Resources plc.

Range Resources – Cinderella, your Carriage Awaits!

2010-01-19T05:47:00.000-08:00

In our Value Proposition on 6th January we identified the main areas of the Range Resources' business, namely Texas USA, Georgia and Puntland Somalia. The potential was significant and we likened the Range scenario to a Cinderella story, always working hard in the background and finally it seemed, able to go to the ball!

The downside of going to the ball is that you will certainly need a new dress. But without a fairy godmother to foot the bill, (alas, she lost her magic wand in 2008), where would you expect to get the money from?

Well in the case of Range Resources the funding has now arrived by way of a placing of A$2million announced on 5th January 2010 and also a further A$7million via a rights issue covered in the same announcement.

The problem however is that rights issues can be a little hit and miss. What you need to see is a fully underwritten rights issue whereby no matter how many holders take up rights the company is guaranteed to receive the money. Well that piece of the jigsaw was confirmed today in the latest news release and the overall funding of A$9 million is confirmed.

Range have now built a portfolio which would turn many oil and gas Execs green with envy:

1. Texas USA (25% Range) – a commercial oil and gas discovery expecting to enter production in the coming weeks and a resource estimate due shortly;

2. Georgia (50% Range) – seismic testing underway and results expected shortly in an exciting oil and gas environment;

3. Puntland Somalia (Onshore 20% Range / Offshore 100% Range) – following signature of PDAs and parliament ratification, onshore drill ready targets are in place and spudding of the first well is expected in a few months. Not forgetting the search for a third party for the offshore licences the results of which are expected in the coming months also!

Now, with A$9million in funding confirmed, they have the resources to secure progress in all three areas, something that should certainly inspire investors over the coming weeks and months. And what impresses Mining Maven is the fact that private investors are able to participate in this fundraising (at a discounted price) through the rights issue. Such private investor participation is something we would like to see more companies embrace.

Exciting times ahead for Range Resources!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The author owns shares in Range Resources plc.

Red Rock Resources: Growing those Gold Ounces....

2010-01-15T03:54:00.000-08:00

We originally published our value proposition on Red Rock Resources (AIM:RRR) in December, and we really didn’t expect to re-visit this so soon. However the company has just announced an update on progress at the Migori gold prospect in Kenya, and it contains some rather interesting news.

Unsurprisingly the drilling program has now recommenced in earnest after the holidays, full details of which are provided in the announcement; and it all appears to be on track.

However, more significant in our eyes is the news that once results are in from the 2009 drilling campaign, (which will also include additional samples taken from the previous operators interrupted program), the company will carry out a revision of the NI 43-101 resource estimate. This was the part that caught our attention, as this is where significant additional value can be built in very short order.

The company's 23rd December AGM presentation indicates that Migori is set to be in the forefront of activities for 2010, and in our value proposition we note their stated intention to fast track the Migori project into production at the earliest opportunity. The prospect being considered amenable to a low cost open pit mining operation with a low stripping ratio.

As detailed in the Edison Research note, most of Migori’s, 1.2m ounce resource is currently in the indicated category, with a small amount (9.7k ounces) in the Macalder tailings actually measured.

By carrying out a revised NI 43-101 resource estimate, the company will not only be targeting an increase in the size of the resource, but also looking to move more of the resource up from the indicated to the measured category.

Just to remind readers that measured ounces carry the highest level of confidence and ounces in this category will command a significantly higher “in the ground” value than those on a lower category. What value? Well, as the Edison Gold Sector report from last October suggested, $381 attributable per measured ounce and $30 for indicated ounces. In other words 10,000 measured ounces would book in at $3.8m, 100,000 measured ounces to $38m and so on.

It’s a bit soon to start crunching the numbers, but there seems to be a lot of scope here not only to increase the scale of the resource but also the confidence in the ounces of gold in the ground. Add that to a fast track production scenario and you can why this news is worth highlighting!

The Red Rock value proposition has now been updated to reflect this new development.

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Gold price could go parabolic in 2010 - Hang on to those gold stocks!!

2010-01-12T06:32:00.000-08:00

Click here to read the transcript of the Keynote Speech presented by Nick Barisheff at the Empire Club’s 16th Annual Investment Outlook Luncheon. For an indication of whats in store for gold, silver and the mining shares, its a must read and you certainly wont need to refer to your crystal Ball!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Copyright © miningmaven 2009

There is no such thing as bad weather – only the wrong clothes...

2010-01-09T06:07:00.000-08:00

....a very profound and rather apt observation credit for which goes to the wit and wisdom of Billy Connolly!

Greetings Mavens!

What do we have lined up for January?? Well, we currently have a bit of a backlog! A few articles are awaiting final review and signing off, amongst them is a value proposition on a rather interesting Australian Iron Ore & Nickel exploration company which we feel may experience, dare I say, significant transformational growth potential in 2010!

We are also putting together a review on Rare Earth Elements (REE) together with a guide on where to look to find investment opportunities. According to some very astute commentators, this tiny sector is set to explode with fortunes to be made over the next few years! With few players outside of China (china accounts for 97% of the world REE production) the investment case looks very compeling to say the least. Make sure to watch this space!!

Or better still subscribe - join us on Facebook or Twitter to get priority updates as soon as they are released.

On Thursday we set up the Miningmaven Facebook Group. Numbers are still a bit thin as we wait for word to start to spread. We set this up as a true “open source” hub for people to network, exchange views & ideas, advertise your own blog, show or events and put forward your own suggestions and value propositions.

Wherever you are in the world, please spread the word and join us in creating an Investor hub where we can all actively help promote interest in investing in the Natural Resource sector.

This week saw Gold put in an impressive performance and robust recovery closing at $1138.70. Here is an excellent Moneyweek article by Dominic Frisby on what we can expect next for the gold price.

If you haven’t discovered Dominic yet, you don’t know what you've been missing! His interviews on Frisby's Bulls & Bears. are always insightful, laced with good humour and really entertaining.

And to complete your weekends info-tainment, here are a couple of great interview out today from Kings World News:

1.Ted Butler on the Metal Markets 9th January

2. GATA "round-table" on Gold 9th January

Have a great weekend all and I would suggest make sure you wrap up warm, but after speaking to one Maven yesterday who is still sunning himself in 40c in Barbados, better advice perhaps would be to make the most of whatever weather you're getting - and dress appropriately!

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Range Resources: Cinderella you shall go to the ball.....

2010-01-06T09:48:00.000-08:00

Strange thing this exploration business; one day you have nothing but hope and the next day, well.....

Let’s say the next day you have a bit more than just hope, you have some real evidence of value within your prospects. Your operating environment has changed for the better. Your ability to achieve your corporate objectives finally, after much delay, start to look like they could become reality....

Your business has been growing wings but previously you were prohibited from flying. You had earned the right to succeed but not, so it seemed until this point, the permission. You were all dressed up, and until December 2009, had nowhere to go.

This rather confusing opening picture is the environment currently occupied by Peter Landau, Executive Director of Range Resources (ASX:RRS)(AIM:RRL).

But it seems Cinderella, or in this case Range Resources, shall at last go to the ball! What happened in December 2009 was transformational for the business; it’s just the market hasn’t realised the magnitude of transformation....well not yet anyway.

It’s a bit of a protracted story, but, in a nut shell, this is where we are at present:

1. has a 25% stake in a Texan prospect from which drilling has identified a commercial oil and gas find;

2. has, with their operating partner Crest Resources, recently increased the size of their Texan oil prospect licence area by some 50% (1120 acres to 1680 acres);

3. has just commenced a seismic review operation in Georgia targeting substantial oil prospects (project revenue share 50/50 with Georgian government pre cost recovery and 35% Range after costs recovered, no tax deducted thereafter);

4. has just received the go ahead for drilling of the Puntland (northern Somalia) onshore oil licences estimated to contain 2-10billion barrels in one basin and a similar amount in a second with drilling now due to commence in 2010. Range hold a 20% interest and are free carried for the first $50million of exploration costs by their partner Africa oil (see comments below re free carry status);

5. holds 100% of offshore oil/gas exploration licences and plan to secure a partner to fund exploration programme in 2010;

6. has a market cap of A$36.5million or £21.1million based on 563million shares currently in issue.

The stock market has a long memory and, like the proverbial elephant, it never forgets. Where a company has erred it takes a while before the market forgives, and even then failure remains in the back of an investor’s mind and management have to behave impeccably to maintain the confidence to move beyond any historic difficulties.

Now we could drone on about management changes, delays, information flow etc ..... ad infinitum. Or we could focus on what Range Resources has right now and the value delivered to shareholders in the final weeks of 2009.

I vote the latter, and to help keep us positive, a quote from the first page of the Range Resources 2009 website presentation:

“If you can find a path with no obstacles it probably doesn’t lead anywhere”

You can see why they chose that one for the front page cant you!!

So straight on we go with a brief overview of what they have created. Spot the value here. We believe there is lots of it and Mining Maven is quite excited about what could happen to Range Resources and its share price in 2010.

Texas (USA) – Oil and Gas Discovery:

After reaching target depth with the Smith1 Well in the North Chapman ranch area of Texas in November the markets were made to wait until 21 December 2009 before an rns confirmed a commercial oil and gas discovery.

Initial test results showed flow rates of 2.4million cubic feet of gas and 191 barrels of oil per day. No estimates were given as to the side of the finds but Range is to conduct additional testing of the well into the sales line whilst finishing completion. The company has confirmed that reservoir size and reserve figures will be released once completion operations are finalised this month (January 2010). Also, first production and sales are expected to commence later this month. So Range will become, at some time in the next few weeks, a revenue earning producer. Quite a change given the difficulties of the past.

Drill costs are supplemented by costs to production and Range has incurred expenditure of just A$1.3million, a figure they expect to recover in around nine months from their share of production and sales revenues. Quite a feat!

Now here’s a few extra points to note. Firstly, the initial well test measurements were conducted using a small choke size, so the full potential flow rate could be materially higher. Secondly, only one of the three pay zones has been perforated and tested, so more upside there. Thirdly, they are planning additional wells thus speeding up the potential production and sales revenues (of course they have to fund their share of cost for all wells drilled).

And finally, Range and its partners have just increased their Texan acreage from 1,120 acres to 1,680 acres, a 50% increase. Evidently they like what they see!!

There is much speculation as to the extent of reserve and of course speculation can lead to desperation. That said it’s worth noting that the original target for the drill campaign was to find a minimum of 80 billion cubic feet of gas. Initial speculation is that the find could exceed this target substantially and of course, there is also the oil to consider, something of a bonus.

Many investors are optimistically hoping for 200 billion which sounds a stretch until you consider that the Mobil David field just north of North Chapman ranch produced 250 billion cubic feet and over 10 million barrels of oil. Food for thought, but without doubt, the Texas success could be a mini company maker in its own right!

Puntland (Northern Somalia) – Oil exploration (drilling programme)

Onshore

Speaking of company makers how about Puntland onshore licences? Here Range Resources have a 20% interest with Africa Oil (as operator)(TSX:AOI) holding 65% and Lion Energy 15%. The Joint Venture Agreement covers the Dharoor Valley block and the Nogal Valley block.

Puntland is an autonomous state within Somalia and no doubt straight away the geopolitical risk warning flags will be waving in front of your eyes!

In reality the large remaining oil reserves of the world seem to be sat in the middle of geopolitical storms and despite this, significant returns can be made by investing in such territories.

That said, for a high-risk environment Puntland has made some significant progressive steps in recent years. Elections have been held in Puntland since 2001 and the recent (Jan 09) elections passed peacefully. Range makes a firm point that it has a positive constructive relationship with the Puntland government.

Evidently Puntland is cogniscent of the importance of Foreign Direct Investment and the need to address security issues. The recent appointment of a Kuwaiti security firm to protect those operating in the country was regarded as significant evidence to that effect.

Range has been trying to move forward the Puntland programme for some years now. Therefore there was some relief when a news announcement, released on 14 December, confirmed that the company, Africa Oil and the Puntland State of Somalia had reached agreement over modification to the Production Sharing Agreements. The revised agreements were still subject to Parliamentary ratification but this was achieved and confirmed via a news announcement on 21 December 2009.

The modifications allow Africa oil to drill one hole in each of the Nogal and Dharoor Valley exploration areas or two in the Dharoor Valley. In consideration of the amended agreements the parties have agreed to relinquish 25% of the original agreement area in January 2010 and make a $1million payment to the Puntland government on each commercial discovery within each of the exploration blocks. Other terms include enhanced environmental safety measures and a one off payment by Africa Oil of $1,050,000 for development of infrastructure.

Africa Oil has stated an intention to commence operations immediately. Worthy of mention is that Africa oil has reviewed data prepared by the Puntland government and Range Resources. They have reinterpreted existing seismic data and have drill targets identified. Rig mobilisation for Dharoor is expected in Q1 2010 with a view to spudding the first well in mid 2010.

As part of the Joint Venture Agreement Africa Oil committed to paying the first $22.8mn of exploration expenditure within each block (Nogal and Dharoor). With respect to Dharoor in the fourth quarter of 2008 Africa Oil satisfied this requirement and going forward Range will be required to contribute against its 20% participation. With respect to Nogal, Africa Oil has spent $4.3 million of the $22.8mn sole funding commitment (to end September 2009).

Puntland is considered to be world class acreage and a continuation of the prolific Yemen Rift system. Reflecting this and the work undertaken to date the onshore campaign is targeting 2 - 10 billion barrels of oil, potentially within each basin.

Offshore

Range has completed an offshore seismic/well database and through this has identified reservoir and source rock targets.

Offshore licences are still 100% owned by Range Resources however the company is in discussion with joint venture seismic partners to move this forward. It is anticipated that, subject to Puntland Government approval, joint venture partners will be agreed and an offshore licensing round undertaken, possibly within Q1 2010.

Georgia – Oil exploration (seismic programme)

Georgia benefits from a democratically elected government and a business environment that demonstrates significant cross border investment and multinational trading.

On 9th July 2009 Range announced an agreement with Strait Oil and Gas re the acquisition of a 50% interest in two Georgian Oil and Gas exploration blocks (Blocks VIA and VIB). To earn this 50% interest Range are committed to completion of Phase II of the PSA applicable to the specific blocks, consisting of 350km of 2D and 3D seismic and well selection.

The budgeted costs for Phase II are $4-5million and against this Range planned a $2.5mn placement (see comments re ‘Rights Issue’ below) to cover initial Georgian costs to December 2009 ($1mn) and also for Puntland related expenditures.

This is a substantial licence area with the two blocks representing a contiguous area of 7,000 square kilometres (or over 10% of the surface area of Georgia).

The blocks have been the subject of extensive exploration, particularly during the Soviet era and are considered to be highly prospective for both oil and gas discoveries. Fourteen prospects have been identified on Block VIA with a gross unrisked potential of more than 380 million barrels.

Range will now undertake 350kms of 2D seismic to identify drill ready targets in due course.

Georgia itself is an existing oil and gas producer with the Samgori field holding approximately 200 million barrels of recoverable reserves. In addition three major pipelines cross the country supporting the transportation of hydrocarbons.

Fundraising:

It’s worth mentioning that Range has just announced an entitlements (rights) issue along with a placement. The entitlements issue is to raise approximately $7mn with investors on the record date able to buy one share at 5c for every four held. The placement of $2mn is to fund ongoing Texan and Georgian commitments and has been placed with institutional and ‘sophisticated’ investors.

One can assume that the $7mn, which will hopefully be fully underwritten, is to cater for Puntland related costs (re general operations and contributory Dharoor costs).

This fundraising enable the company to move to a revenue generation model through Texas, which in itself thereafter should provide a material incoming cash flow which can be re-invested in Georgia and Puntland helping to build the value of the company asset base.

So the Portfolio again......

1. has a 25% stake in a Texan prospect from which drilling has identified a commercial oil and gas find;

2. has, with their operating partner Crest Resources, recently increased the size of their Texan oil prospect licence area by some 50% (1120 acres to 1680 acres);

5. holds 100% of offshore oil/gas exploration licences and plan to secure a partner to fund exploration programme in 2010;

6. has a market cap of A$36.5million or £21.1million based on 563million shares currently in issue.

Example Risks (not comprehensive):

- Exploration work fails to identify economic resources;

- Country/Regulatory risk;

- Financial risk (sufficiency and stewardship of working capital and investment capital in particular);

- Commodity price exposure;

- Key person exposure (risk of losing key members of the team).

Company information:

Range Resources is listed on the Australian Securities Exchange (ASX:RRS) and the Alternative Investment Market (AIM:RRL).

Shares in issue - 563,000,000 (fully diluted – 954,000,000 reflecting 391million options at 5c per share)

Current share price – ASX 6.5c and AIM 3.75p.

Market cap (4.1.10) – ASX A$36.5million and AIM £21.1million.

Company website is found at: http://www.rangeresources.com.au/

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Ariana Resources: Buy me a Gold Mine in Turkey!

2010-01-03T11:33:00.000-08:00

For some, running a Gold Exploration Company may be easier than for others. However running a gold exploration company that has any chance of success is quite a different matter.

You will always need to articulate your message, have a prospect or two and secure that all important funding.

But to achieve success its more about hard work and how you allocate your resources. So be prepared for a rigorous ongoing exploration programme and a proactive development strategy; namely, identifying an initial gold resource, building on it, driving it up the value curve and then selling the asset or even (heaven forbid!) actually produce your own gold from it!

So running a successful gold exploration company is never going to be a walk in the park and regrettably, for the vast majority of juniors, the only gold they will ever see is when the MD returns from the jewellers with his (or her) new Gold Rolex watch!

Fortunately for Kerim Sener, Managing Director of Ariana Resources (AIM:AAU), that rather broad analogy does not apply - and that’s because Ariana have already produced their first gold!

At the November 2009 Mines and Money show in London, I visited the Ariana stand. Kerim, very articulately talked me through the company’s activities, its operations and its potential. He then pulled out of his pocket a one-ounce bar of Ariana Resources own gold! This bar was produced during trial mining activities undertaken in 2009.

The Ariana story has been building for some time. The company has diligently focused on a no-fluff approach by steadily building a 400,000 ounce resource base which we outline further below. And not just any old resource base, but one that includes a good slug of JORC compliant “Measured” gold (Measured being the highest level of confidence of the 3 JORC compliant categories).

Its also worth noting that in October 2009 Edison Investment Research provided a Gold Report in which they re-ran their analysis to differentiate between Measured, Indicated & Inferred ounces and to define a value for each. It concluded a realistic average value of $380 per ounce to gold ounces in the measured category. Such a valuation would therefore suggest that for measured ounces alone, Ariana could justify a market capitalisation of $40million or £25million, equating to 15 pence per share! Such simplistic valuation methods can be crude, but still not a bad indication, given the current mid share price of just 3.25p (Thursday 31/12).

But why the need to build such a reliable resource base? Well because they want to get to production fast and for that, they need the assurance that there is actually enough economically mineable gold in the ground to support their proposition. This approach has recently paid big dividends with an MoU signed with Proccea Construction in Turkey in October 09 to develop their own mine at the Red Rabbit project in western Turkey.

This agreement covering the development of Sindirgi and Tavsan (now together named the ‘Red Rabbit’ project) in effect will lead to a new 50/50 company into which Ariana will place the properties. Proccea have provided a good will payment of $500,000 to Ariana and will fund the Joint Venture business with $8million to be committed to feasibility and plant development. The balance of $4m for plant cost is expected to be raised through debt finance as per the October 2009 announcement. (full details click here).

So a clever little non-dilutive deal, which completely de-risk's the venture for Ariana and should reassure shareholders that they are now well within reach of near term production.

A recent update confirmed that Red Rabbit is moving forward apace. An NI43-101 compliant resource is being calculated, new metallurgical test work completed and environmental scoping is underway. In fact it seems that both parties are pushing ahead of the strict scheduled timetable and, it is expected that the Joint Venture Agreement will be signed off in the first quarter of 2010. The feasibility work is to take place in 2010 and production, if all matters progress as expected looks set as soon as 2011. And in the world of gold mining, that is fast!

Alongside their gold producer ambitions they also have a Joint Venture with European Goldfields (AIM:EGU) on their properties in north eastern Turkey. (For those unfamiliar, European Goldfields is a Canadian CDN$1.2Bmarket gold company. They also hold a 16% stake in Ariana).

After all, if you're a small exploration company, its often best to de-risk yourself and hand over exploration responsibilities to a larger, more able partner with deep pockets. Riding on the coat tails of their success with a stake in something which could one day end up materially bigger – namely a decent third party funded discovery.

Operationally the company has consistently delivered on its promises and has achieved the goals it has set itself. So a big pat on the back is rightly deserved. However the environment over the last two years has been testing especially in terms of raising finance, and although Ariana has all but made it through the woods in tact and now looks to be well funded for all its planned activities, the stigma of two consecutive discounted placements can be a hard one to shake off.

The Company has also come in for some criticism regarding their lack of promotional activities. Whilst news flow to the Market over the last 2 years has shown solid progress on the ground, and Kerim is certainly not one to hide away from his shareholders, promotional activity has, to say the least been somewhat lacking.

As private investors will testify, the initial excitement of a positive RNS delivered to an expectant market can fade fast unless backed up by an ongoing coordinated PR campaign to keep up levels awareness. To be fair to the company, in last years prevailing climate with limited funds available, Promotion was probably not at the top of their agenda.

Nonetheless they now find themselves in a place where, starved of the oxygen of publicity, this enticing story has so far reached a very limited audience.

But all that seems set to change in 2010. In a New Year communiqué to shareholders, Kerim stated that the Company intends to ramp up the PR machine and create greater investor awareness, with events and presentations planned such as The Association of Mining Analysts, Proactive Investors Events, Minesite Forum, & Master Investor Show .

A revitalised PR budget for 2010 should certainly help prepare the ground for the significant news flow and transformational developments expected in Q1 and beyond.

Before we get into the meat of Ariana’s portfolio, it’s worth talking a little about Turkey as a region in which to operate. After all, geopolitical risk is a key element when assessing the prospects for junior explorers.

A new more liberal mining law implemented in 2004, along with a competitive state royalty and corporation tax regime, with certain VAT exemptions on gold and silver exploration has encouraged foreign investment in the sector and a positive operating environment.

If you ever needed convincing of the importance of Gold to Turkey and its economy, a chat to the people at the Istanbul Gold Exchange should leave you in no doubt that Turkey, better than most, really understands gold and its ever growing significance in global investment and monetery terms. Everyone (and I mean everyone!) in Turkey understands gold and appreciates its value. Yet if you were to ask your avarage London stockbroker what the midday fix was on Gold, he would probably have no idea (or interest!).

Turkey is the largest gold market in Europe, with domestic consumption of 153 tonnes in 2008. Turkey is also a major manufacturing centre and the largest exporter of gold to the Middle East and in more recent years to Russia and Ukraine.

A recent report from the Turkish Ministry of Energy and Natural Resources points to the fact that Turkey's own gold resources currently fulfil just 5 percent of its domestic demand, the rest of which is filled by imported gold.

The rising domestic demand for gold means that companies producing in the region will have a growing market eager to buy their metal. On a global scale, Turkey's increase in gold imports means an even tighter gold supply, which can only be considered as bullish for investors.

So as Ariana’s stated objective is to target a 1m-ounce resource in Western Turkey, whilst also making giant strides towards fast track production through its JV with Proccea, and only 5% of demand satisfied by domestic production, can you see a rather compelling bigger picture starting to emerge??

Red Rabbit – Gold Project Development at Sindirgi and Tavsan:

Right back in 2005, on admission, the company came to market with Sindirgi, a gold project acquired from Newmont Mining in January of that year and hosting some 45km of gold bearing epithermal quartz veins (or a decent gold prospect for the less technically inclined).

During recent years exploration work on only a small portion of the vein system has provided a JORC compliant resource of some 186,000 ounces at Sindirgi (48,000 inferred 32,500 indicated and 105,500 measured) and Ariana are targeting a 250,000 ounce JORC. Recent exploration work at Kepez (see rns 13.5.09 and 3.9.09) demonstrate that expansion of the resource is perfectly feasible.

Supplementing Sindirgi Ariana acquired the Tavsan project licences in April 2008 from TSX listed Odyssey Resources. Tavsan, located in Western Turkey, was a perfect addition to the company portfolio and currently has a JORC compliant resource of some 214,000 ounces (124,000 inferred and 91,000 indicated) and the company sees potential to increase this to 300,000 ounces in due course.

In total the company thus has a JORC compliant resource of 400,000 ounces of which 26% is measured, 31% indicated and just 43% inferred.

One has to consider the status of operations and here too Ariana is somewhat ahead of the game. In 2009 metallurgical testing and trial mining was undertaken from Kiziltepe (Sindirgi) enabling the company to pour its first gold production. Not material in volume terms but the significance of actually producing gold has apparently been lost on the market.

Though the market failed to recognise this milestone, it certainly managed to draw attention locally. As detailed previously, in October 2009 the company announced the Memorandum of Understanding, leading to a 50/50 Joint Venture agreement with Proccea Construction, expected to be concluded in Q1this year.

Ardala – Joint Venture with European Goldfields:

This Joint Venture, to explore the Ardala copper gold porphyry and eleven other licences in north eastern Turkey, was announced to the market by the company in February 2008.

The agreement provided for exploration work to be funded by European Goldfields providing them with a 51% interest in the licences, increasing to between 80 and 90% for each relevant project on completion of a Bankable Feasibility Study.

The deal also saw a placing in Ariana shares to European Goldfields totalling some £890,000 at 5 pence per share.

This Joint Venture appears to be making steady progress and the news in November 2009 highlighted trench results at the Salinbas project of 33 metres at 9.6g/t and 46 metres at 8.3g/t. More importantly this latest discovery now seems to have impressed European Goldfields as their new management set about re-evaluating the significant potential of their JV with Ariana.

More news will no doubt follow from this Joint Venture and of course with European Goldfield funding all exploration up to feasibility, the benefits come at no cost to Ariana.

Additional Exploration:

Alongside the material progress being made through the Red Rabbit project and the progress in the north east with European Goldfields, Ariana is also developing its own exploration portfolio.

Ivrindi and Demirci are two 100% owned projects in western Turkey. At Ivrindi Ariana now has drill ready targets in place on the Kinik gold project. Demirci is a gold/nickel project with interesting gold and nickel drill data available from the Goveli prospect.

Further details of both projects are available from the company website.

In addition, in April 2009 Ariana announced the acquisition of the Muratdag gold project from Newmont with Newmont retaining a 1% net smelter return should the project proceed to gold production at some stage in the future.

So the Portfolio again........

- 400,000 ounces (105,500 measured) of JORC compliant gold resources in western Turkey;

- Metallurgical work and trial processing completed with first gold poured in 2009;

- A MoU and potential Joint Venture with Proccea whereby the partner will invest $8million to conduct feasibility studies and plant development.

- An exploration Joint Venture with European Goldfields in north eastern Turkey;

- An exploration portfolio including established and recently acquired gold and nickel targets;

- A market cap of £5.6million.

It was evident at Mines and Money that the company are extremely committed and focused on the production route. Gold explorers have two principal routes with discoveries, either sell or develop. For those that choose to develop the road can be relatively long and troublesome, but the extra effort and commitment can pay enormous dividends. For Ariana much of the risk has been mitigated with the choice of a “third way” through the joint venture route. Should Ariana succeed with its chosen development option then shareholders should expect to be handsomely rewarded.

Example Risks (not comprehensive):

- Exploration work fails to identify economic deposits;

- Country/Regulatory risk;

- Financial risk (sufficiency and stewardship of working capital and investment capital in particular);

- Commodity price exposure;

- Key person exposure (risk of losing key members of the team).

Company information:

Ariana Resources (AIM:AAU)

AIM Rule 26 info

Shares in issue - 171,049,239 (fully diluted 227,491,469).

Market cap (2.1.10) - £5.6million.

http://www.arianaresources.com/

Latest Presentation January 2010

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

The author owns shares in Ariana Resources plc.

Book Review: An Insider’s Guide to the Mining Sector by Michael Coulson

2010-01-01T06:57:00.000-08:00

Title: An Insider’s Guide to the Mining Sector
Author: Michael Coulson
ISBN: 9781905641550
Publisher: Harriman House Limited
RRP: 34.99
Edition: Second (2008)

Background:

Whilst engaged as a trainee Chartered Accountant a partner in my firm told me ‘there is no substitute for quality education and training’. How true.

The Miningmaven blog is focused on the Private Investor and our mission is to make the sector more accessible to the average investor by providing common sense commentary and sources for additional research. So where would be a good place to start for serious PI’s looking to bolster their knowledge of the Mining and Exploration sector?

We think we may have found the answer in this very easy to read book written by Michael Coulson .

Author:

Review:

This is our first Miningmaven book review so we have decided to look for three essential features in all the titles we identify, namely:

-Breadth of coverage;
- Ease of reading;
- Tools that investors can use in the markets.

Coulson’s book scores well in all three areas. Whilst accessible to all, it is clearly written with the novice in mind. He starts with a non-technical industry overview looking at Mining Countries, Major Industrial Metals (e.g Copper, Zinc, Lead, Nickel etc); Precious Metals; Minor Metals (e.g. Cobalt, Tungsten, Magnesium etc) and Non-Metals (i.e. coal and uranium). He explains each metals industrial usage and place in the market and a special section is given over to an analysis of Gold, which with many investors seems to be a key point of focus.

On top of the commodities and the geopolitical risk of the countries where the exploration and mining is conducted, there is the subject of markets, and Coulson deftly addresses this in a decent review of London, Jo’burg, Sydney, Toronto and New York. No mean feat in just twenty pages!!

He then moves on to a review of mining shares, covering smaller stocks through to the larger organisations. How to build a portfolio; awareness of stock market cycles; understanding company announcements and how to value mining shares.

Now that’s all well and good but many investors are aware of a few horror stories and rags-to-riches tales. Here too Coulson doesn’t disappoint where his look at the Bre-X scandal and the Poseidon Nickel bubble make compelling reading.

Wrapping up the book with additional sources of information and a ‘take-away’ ten key points, Coulson delivers a thoroughly engaging and insightful read. Essential for those who are serious about making money from investing in the sector - not to mention the need to avoid a personal financial disaster by making the wrong decisions.

I keep my copy next to my computer and usually refer to it more than once a day. For around the cost of a one-way trade, it could prove to be one of your better investments for 2010.

Needless to say you can purchase this title and many more at The Mining Maven book store.

This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Whats new for 2010?

2009-12-31T10:15:00.000-08:00

Greetings Mavens!

We are currently putting the finishing touches to a great New Year book review, plus a very interesting value proposition for an AIM listed Junior Gold “pure-play”.….hope to have them both loaded up over the weekend for you!

As you would imagine, we like gold and while Central Banks around the world continue to print money like its going out of fashion, we expect 2010 to herald another strong performance for the precious metals.

We also believe that 2010 may mark the point when the wider market finally starts to take an interest in the gold juniors as well.

To get you in the mood, we offer you this recent Eric King interview with “Mr Gold” Jim Sinclair. Eric Kings' interviews are always worth listening to. However, in our view, this particular one is really outstanding!

Wishing all our readers a healthy and prosperous 2010!

kind regards

This summary represents the views and opinions of miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of Miningmaven content, is expressly prohibited without the prior written consent of miningmaven. However, linking directly to the Miningmaven blog is permitted and encouraged.

Red Rock Resources – So what have Red Rock Resources ever done for us???

2009-12-23T14:09:00.000-08:00

Here’s the problem (perhaps); the market mistakenly thinks Red Rock Resources is an investment company and that’s a BIG BIG mistake, I think.

In fact it’s that bad that I have an image of Andrew Bell leaning out of his boardroom window at 115 Eastbourne Mews shouting, “We are not an investment company!!” You get the point.

Welcome to the frustrating world of Andrew Bell, Chairman of Red Rock Resources!

One thing is certain though; when such micro cap stocks do finally get their message across, they can attract enormous interest and the re-rating process can be quite dramatic.

So what is so special about Red Rock Resources? Or put it another way “What has Red Rock ever done for us?”

Jupiter Mines (ASX:JMS)

The current share price of Jupiter Mines stands at 22.5c meaning the 93 million shares owned by Red Rock are worth A$21million or around £11.8million. That alone equate to 2.13p per Red Rock share.

Resource Star (ASX:RSL)

Red Rock currently owns approximately 24% of Resource Star, which, in line with its business model, it originally acquired by hiving off its Uranium Assets into the business.

It seems all this imminently set to change. Resource Star, currently suspended, is due to relist on the ASX in January 2010 and is in the process of raising $4.4million at 20c per share.

Cue Resources (TSX: V CUE)

Chiwefwe (Zambian Manganese)

Oh Chiwefwe?? Once the darling of the Red Rock portfolio it has gone very quiet recently.

However, we haven’t heard much more about Chiwefwe since the Final Results announced in December 2008.

Migori (Kenyan Gold Prospect)

So in summary Red Rock Resources has given us:

- A 15% stake in Cue Resources a TSX listed Uranium exploration company;

- A market cap of £8.2million which is at a one third discount to the value of the Red Rock holding in Jupiter Mines.

Example Risks (not comprehensive):

- Exploration work fails to identify economic deposits;
- Country/Regulatory risk;

- Financial risk (sufficiency and stewardship of working capital and investment capital in particular);
- Commodity price exposure;

- Key person exposure (risk of losing key members of the team).

Company information:

Red Rock Resources : AIM:RRR
Website: http://www.rrrplc.com/
23rd December AGM Presentatation
AIM Rule 26 Information
Shares in issue - 555,817,920
Market cap (17.12.09) - £8.2million.

The author owns shares in Red Rock Resources plc.

Note: this summary represents the views and opinions of miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation All rights reserved. Users may print extracts of content from this blog for their own personal and non-commercial use only. Republication or redistribution of miningmaven content, including by framing or similar means, is expressly prohibited without the prior written consent of miningmaven.

Horizonte Minerals - Oh Mr Martin, what shall we do??

2009-12-18T02:50:00.000-08:00

Picture the scene. You are the Chief Executive of a small cap AIM listed exploration company. Over the last few years you have experienced the turbulence of the Alternative Investment Market (AIM); the buffeting of the global economic crisis and the hot/cold attitude of mining and exploration investors.You started well enough, with a placing of £2.3million at 30p a share in May of 2006, providing the company a market cap of £9million - no mean feat for a tiddler.

Things got better as this tiddler started to forge Joint Venture (JV) partnerships with global players such as Anglogold Ashanti, Barrick Gold, Troy Resources and LGA Mineracao. They have now developed a portfolio of gold, silver and base metal prospects in highly prospective and exciting territories and evolved to a position where extensive exploration and development work became largely funded by its JV partners.

£3.5million raised in two share placings since listing, means that after three and a half years of exploration, the company expended just over £4million of investors’ money to build a hugely attractive portfolio and the company still had around £1.7million in the bank in late 2009 to fund activities for the foreseeable future.

I'll say it again, not too bad for a tiddler!

And an achievement for which you and your management should rightfully be proud. Perhaps? But then again with the share price currently standing at just 7.25p (closing mid on 16.12.09) that means your total market cap is just £4.3million. Or looked at another way, after all the progress made on the ground, the share price has been reduced to just 24% and the total market cap just 47% of what it was on its market debut.

Welcome to the world of Jeremy Martin, CEO Horizonte Minerals (AIM:HZM)

"Fortune favours the brave" as we resource investors often say. But the market doesn’t always reward the exploration brave for their efforts. Well not straight away at least;

The share prices of even the most exciting AIM stocks can languish at deplorably low levels for quite some time until something happens, investors start getting interested and then a rerating occurs.

Before we get too speculative let’s break down the portfolio and briefly examine the various prospects, partnerships and assets that might just make Horizonte worth more than its current market cap:

Tangara Gold (Brazil – JV with Troy Resources)

In December 2007 a joint venture agreement was signed with Troy Resources covering the Tangara Gold prospect. Horizonte had been exploring Tangara for some time and had built up some interesting results including one intersection of 35m at 2.5 grams per tonne (g/t) gold.

Troy took over exploration and agreed to pay a $200,000 signing payment and $100,000 every six months for the next three years. If they wish to advance the project into production and take 100% ownership (a decision they must make by December 2010) they have to pay a further $2million to Horizonte and then a net smelter return on production. All in, if successful, the JV could provide $15-20million total income to Horizonte.

Having already exceeded their minimum $2million spend, Troy continue to explore actively at Tangara. Disappointing recent drilling results in two areas led investors to suspect Tangara had become the proverbial ‘dead duck’, but that may not be the case. Tangara has multiple target areas and Troy seem keen to push ahead; not least because their Andorhinas Gold plant nearby will be hungry for new feed sources over the years to come and Tangara is perfectly placed to provide. Moreover before Troy took over, Tangara had produced positive results for Horizonte highlighting the prospectivity of the area, something which many are forgetting!

Falcao Gold Project (Brazil)

Like Tangara, Falcao was one of the three flagship prospects that the company identified on listing in 2006, the third being El Aquila (see below). Falcao is 175km away from Tangara and was the subject of a 1998 limited drilling campaign by BHP. They found interesting intersections including 9 metres from surface at 4.8 g/t gold.

Horizonte have recently undertaken extensive geochemical sampling and a mapping programme which means they are now are drill ready and according to the annual report have a number of third party companies who have expressed an interest in the project.

Falcao seems to be an exciting project and one that will hopefully secure yet another JV partner in the coming months who, in line with the final results, will help undertake a 3,000metre drill programme. It’s a good job then that the concession licences have recently been extended for another three years.

Anglogold Ashanti (New Exploration)

What would you say when the third largest gold producing mining company in the world, Anglo Gold wants to give you $5.3million (£3.3million) for new prospect identification and exploration...

Well the answer would be yes I suppose, which is exactly what happened to Horizonte in September this year. The amounts are staged with $900,000 in year one, $1.4million in year two and $3million in year three, subject to reasonable acceleration or post year one withdrawal terms and conditions.

Targets identified become 51% owned by Anglogold or 70% if further expenditure is incurred to take a target area through a pre-feasibility study.

This is an exploration war chest and partner many small cap exploration companies would love to secure; and Horizonte have done just that. There will no doubt be much more news to come from this partnership in the coming months and years.

El Aquila Silver/Zinc (Peru)

Located in the Cerro de Pasco mining district El Aquila is a JV ready silver zinc prospect. The final results released in April 2009 noted a resource estimate undertaken by external consultants SAMSA, based on a high 100 g/t Ag equivalent cut-off, showing the presence of 1.17 Mt grading 148.7 g/t Ag equivalent.

Horizonte also noted however the key to exploring El Aquila is at depth and requires a serious drill commitment. So the search for JV partners continues and the recent resurgence in the price of silver should help the company achieve that objective. Not to mention the presence of a number of other mines in the area together with an established infrastructure.

Pararapa (Peru JV with Barrick Gold)

Signed in July 2008 this JV will provide Horizonte with a 100% interest in the Pararapa gold and silver project subject to the completion of certain exploration milestones. Per the interim results released in September a drilling programme is scheduled to commence at Pararapa shortly and the initial exploration work including soil grids and detailed mapping has recently been completed.

Here’s the interesting part; Pararapa is located in an historic mining district where AIM listed Hochschild currently operate two mines.

Lontra Nickel (Brazil JV with LGA Mineraco)

Should the exploration drilling prove up the resource, Lontra Nickel’s could conservatively be worth in the region of $60million to Horizonte (about 62p per share after currency translation at current rates). That’s according to comments from the CEO in an article last September when the ‘discovery’ was first announced.

Lontra is lateritic nickel, which traditionally has been second place to Nickel Sulphide resources which are easier and less costly to process. Yet, the consumption of resources around the world now make lateritic nickel the majority of remaining global resource; so lateritic deposits are coming into vogue.

There is work to do, including infill drilling to prove up to JORC resource standard in Q1 2010 and investigation of extraction/processing methods. But Lontra looks exciting especially with grades of up to 1.6% identified to date from drilling and the recent successful metallurgical tests.

Next step is a Lontra JORC in 2010 year when things could get very interesting as Lontra is situated close by Xstrata’s Serra da Tapa project.

Tucuma Nickel (Brazil JV with LGA Mineraco)

Complementing the Lateritic Nickel at Lontra, Horizonte last week announced a new Nickel Sulphide project located a short distance from Vale’s Onca Puma project.

This new project emerged from the grassroots exploration JV agreement with Horizonte’s Brazilian partner LGA Mineraco (LGA). This JV provides LGA funding to undertake grassroots exploration on Horizonte prospects and, from the Tucuma evidence, this JV is working as intended.

Horizonte are not hanging around here, and are currently developing drill targets for a programme to commence early next year. Another – “watch this space” development.

So summarising then........

- Bursting at the seams with projects in gold, silver and base metals;
- Well funded, low cash burn & JV partners funding majority of exploration work;
- JV partners that would be on any small cap explorers ‘Blue Chip’ hit list;
- Market cap of just £4.3 million if you deduct estimated cash of £1.7m, enterprise value £2.6m

Example Risks

- Exploration work fails to identify economic deposits;
- Country/Regulatory risk;
- Financial risk (sufficiency and stewardship of working cap & investment cap in particular);
- Commodity price exposure;
- Key person exposure (risk of losing key members of the team).

Company information:

Website: http://www.horizonteminerals.com/

AIM Rule 26 Information

Horizonte Minerals: (AIM:HZM).

Shares in issue - 59,019,096.
Market cap (17.12.09) - £4.3million.

© miningmaven 2009

Note: this summary represents the views and opinions of miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation to buy, sell or hold shares.Readers are advised to do their own extensive research before buying any shares and small cap exploration stocks, should always be viewed as high risk.Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.

The author owns shares in Horizonte Minerals plc.