Morning Mumble: Gemfields' results lacking sparkling, Allied Minds, Tullow. Savannah Resources, Thorntons and BCN, with SRX (one hopes not the new AMI).

Good Morning,

Brief today as have a number of meetings then a school trip!

Gemfields's Singapore auction closed yesterday with an average of $617.42 per carat down a near 10% on the December 14 higher quality stones auction ($688.64/carat). In the absence of a decent marketing push, the decline in number of lots and sales revenue from these higher quality stones is going to continue. Not only were the lots sold a paltry 61% of those offered (46), but also was the price achieved. Over to GEM to find a way forward.

For those that didn't top slice, sell or trade Allied Minds (ALM), today brings news of their joint venture, ABLS (Allied-Bristol Life Sciences, LLC) acquiring licenses from Harvard. ABLS is a jointly owned entity between Allied Minds and Bristol-Myers Squibb Co.

Tullow Oil (TLW) have got off a little lighter tax bill than the Ugandan Government had hoped for. Both parties have agreed to a full and final figure of $250M, near $273M below what was claimed at $473M. TLW also have got an instalment plan put in place. After consideration of the $142 million already paid TLW have a mere $36M ($108 million in total).

Providence Resources (PVR), yet again gives news that is pretty much academic in the absence of the lack of a farm out for Barryroe. The Technical Update, Newgrange Prospect, although "good news" isn't what the market is looking for. In the absence of such a deal for Barryroe, one has to wonder how long Tony O' Reilly's position remains acceptable to the shareholders. 

Surely there are not rumblings of disgruntled and 'impatient' shareholders at PVR. Or worse, has the soon to be partner realised PVR are over a barrel and hard ball is being played out.

Savannah Resources (SAV), appears to being pushed in the press, with a deal where SAV can earn up to 51% Mutamba/Jangamo with the formation of Joint Venture with Rio Tinto of all companies. There's a number of woes here, firstly investors would be wise to consider the woes of this deal. Why Rio would want to be a minority partner in any business it conducts raises significant questions about Heavy Mineral Sands. This is guaranteed to be revisited in due course, expect a fund raising in due course on the back of the "significance." 

Ormonde Mining (ORM) will be grateful of the Oaktree financing as their final results out last Wednesday, show they had around 200K ish left in the kitty. Had investors paid attention to the EMC (EMC: ORM February 2015) they'd have saved themselves near 40% and some 70% longer-term. After today's update, one would be wise to consider how the financing assists with working capital requirements, same as SAV, this will be revisited. 

Shareholders in Thornton's (THT) have been saved, with an offer from Ferrero at 145 pence. In the absence of additional interest, it’s wise to take the cash and run, especially those in more recently over the past 3 months. Hat-tip Richard S and CwC for some decent research there, have conducted none of it myself it was a pleasure free-loading for once, although very small! 

Its noted that a certain small brokerage should get more commendation for their work especially after 3 kills in near as many days! Perhaps Charles Stanley can save themselves considerable time reviewing their targets and just put 145 pence! 

With a chance of Director at Bacanora Minerals (BCN), maybe the company forgot to thank him for his services? Of significance is the change at Sierra Rutile (SRX) whom has appointed a chap associated previously with African Minerals. A brave appointment in light of SRX's recent share price recovery. 

Atb Fraser

Morning Mumble: Talvivaara (TALV) do holders have a case? The Hedge Fund's speculation, AQP soon to be RIP?

Good Morning, 

Talvivaara investigate their own disclosures between 2011-2013, where it is alleged the market wasn't informed of significant changes in production volumes and the impact on the forecasts. 

Readers of FTML will know TALV was a favoured short for a considerable time. Apart from the obvious, what more did investors need in assessing what a crap investment is? Even at significantly higher Nickel prices, TALV could not make money. Simply put, "its technological model" is/wasn't suited to an environment of prices any less than twice the current market (EMC view). (Source regarding investigations: Taloussanomat). 

The Hedge Funds have spotted what the EMC realised with an iron ore price spike, when two small buyers were in the market, with the physical (almost immediate delivery) being in short supply. Its common, when prices tank for companies to slow the immediate supply to market, in the hope prices pick up or a premium, as such the speculators are going to make those in need pay. Even the "tin" market (Indonesian woes) may benefit by the categorical absence of decent supply. So with commodity traders betting on a short-term appreciation, expect some decent, yet predictable volatility. 

Fortescue Metals Group (ASX: FMG) refinancing, was the kick-start the stock needed to recover some of its losses. Albeit the profit-taking is now in full flow, damn those traders. FMG's refinancing on a simple level was needed, but was far from cheap, or was it acknowledging the risks of things to come. So with some breathing space and the Chinese determined not to let the native producers go to wall, the swallows are departing quickly!

Aquarius Platinum (AQP) Financial and Production Results to 31 March 2015, which should have been labelled Q3 production, but AQP would be wise to stick to a non-standardised update format. Simply, the results are crap, in the absence of a turnaround in the PGM (Platinum Group Metals) sector, the company is destined for more pain. Well, not exactly, the shareholders are. 

Obviously with AQP, you can scrape the barrel by looking at the cost improvements in a "hard environment, ounces down on the previous quarter and labour costs set to rise. With a telescope to a hope of future price appreciation, AQP isn't looking pretty. Of course there's some benefits to trading, illiquid, moves on little volume, but not without risks. 

It’s hard to justify a value above the cash in AQP. How certain parties managed to get other jobs post AQP makes one wonder! In the absence of a recovery in PGM prices, don't expect anything other than pain, save for the asset sales made today. 

Allied Minds (ALM) annual results were out, which need a significant amount of time for this techno-limited mind to work through! Having banked profit at 600 and the cheeky short, there's no concern regarding any holding, the wise should have also taken some profit!

Finally, Oil has woken up to the inventory reporting, wonders will never cease. Sirius Minerals suffering the usual sell on the news...Kier Group's (KIE) rights issue to buy Mouchel will not do the SP any favours post completion of the deal.

Atb Fraser

Morning Mumble: The Drought with ANTO and SQM, Largo + APF and Allied Minds, + IGAS/INEOS

Good Morning,

With a growing discontent in Chile over the drought, the press are awakening to the idea it's not good for Chilean copper production, more so the natives. Yesterday EMC reported on the protests at Antofagasta's (ANTO) Los Pelambres. For those needing to the geographical model, Chile Copper Mines. 

It was asserted that, "The protests were triggered by a small group who do not necessarily represent the valley community and are seeking action by Pelambres and the local government to help alleviate the current drought conditions. Discussions regarding water availability have been proceeding for some time with the intention of establishing a lasting solution." Yet today, almost entirely contradicting that statement is the court ruling against Los Pelambres (ANTO subsidiary) we’re notified of issues regarding the Pupío stream flowing through Los Pelambres. 

The majority of miners in Chile are suffering, those myopic iodine speculators will still be focussed on SQM's iodine production, will be well versed in the problematic history of security of water supply. The sector is not without its issues of corruption and the legal system / prosecutors are starting to pay attention. 

A few families control 50% of all mining interests in Chile (read being perceived to be above the law), with growing resentment from the locals. Not only brought on by a perception of greed but increase belief that profit comes above all else, the 'stream' at Los Pelambres being a prime example.

With various other options available to the miners including a sea water pipeline (at cost) and not necessarily viable at the current prices, it's going to be a difficult situation to manage. The blame is placed firmly at the door of El Niño (a rather large swelling amount of warm water in the eastern tropical Pacific ocean), although the miners get the pain/blame by the locals. 

APF (Anglo Pacific) still do not appear to have updated the market on the Largo Resources (TSX: LGO) refinancing issues. If these end negatively (although unlikely) could have a material impact on the royalty.  Largo emailed out the corporate update last night in respect of its Maracás Menchen Mine and announced the appointment of Mr. Mark A. Smith as its new Chief Executive Officer. 

Basic maths suggests TSX: LGO needs $60M (CDN), with Mark at the helm financing should come easy for those old-timers of Molycorp and more recently NioCorp (Niobium at Elk Creek). Perhaps on the 25 March, Anglo Pacific (APF) will give some indication of their knowledge. Based on their share price performance since, 2011/12 it doesn't bode well.

Shorts were scambling to cover on Allied Minds (ALM) this morning. Those betting on sentiment should be more short-term, with the announcement of BridgeSat costing some profits. BridgeSat intends to develop optical connectivity system that aims to increase the speed, security and efficiency of data transmissions from low Earth orbit (LEO) satellites at a reduced cost compared with traditional radio frequency solutions. 

Igas Energy (IGAS) finally came forward with the long-awaited UK Shale Farm out Agreement with INEOS. The figures aren't bad at all for both parties, the Swiss Chemical Group (INEOS) get to fund some decent acreage with Igas getting some much needed cash, and carry. The market, perhaps, should have reacted better to a deal worth £65M, alas there's no pleasing some people. 

The news is sufficient to find even the negative of investors now reconsidering. The large bets (EMC) causing some drop as they take short-term 30% gains in six weeks, perhaps they might just leave some skin in the game. 

Leggie, Cairn Energy out today! 

Atb Fraser