Morning Mumble: Bowleven, a little Lonmin, the Caterpillar & WPP (Belatedly)

Good Afternoon,  Good Evening, its been so long I forgot to click publish.

Some tiddler octane both in the board room and stocks volatility, the occasional police raid, with Global Advertising expectations easing.

Bowleven, at around the current price (c.34) there's potential, sadly the management appears to have done very little to progress things for stockholders in my view. It’s bizarre that statements appear in the FT from the likes of New Age's Steve Lowden, "who he can’t actually remember the last time he even had contact with Bowleven." See: Bowleven, the former exploration and production company. Perhaps someone should ask BLVN board about their progressive and dynamic approach to its assets, seeing as Steve Lowden's comments raise a serious question.

The management's lack of ability to monetize the project for shareholders is very difficult to measure, especially if you base the share price in comparison to the remuneration of Directors, I'd go as far to say its appalling. The board appears to have commissioned supposed independent reports, enthusiastically recommending all the resolutions are voted against. Perhaps these reports should also disclose if and what fee the company has paid them. The cost of this defence, including promoted Tweets on Twitter, is appalling and lacks the substance even smaller companies are able to achieve. A quick glance at Ascent Resources (AST) and Victoria Oil & Gas, proves this, albeit I have zero interest in the latter having taken decent profits.

Those holding for some time will be aware of the glossy promotion that has come through the door. Additional items include Institutional Shareholder Services, Inc. (ISS), the leading corporate governance and proxy advisory firm, and Pensions & Investment Research Consultants Ltd (PIRC), and further waffle from, Glass Lewis. Save for the PIRC throwing Philip Tracy under the bus for some reason or other, it's vote against every resolution.

The board had ample time to do something, with a lot of activity happening around the Etinde license, and the potential of funds getting more actively involved in the neighbourhood, to me the board are lacking any credible defence.

Simply, Crown Ocean Capital P1 Ltd (unfortunately abbreviated) are right, perhaps the cash return needs to be reconsidered, but there's potential with a new Board to establish and progress things. There may even be a few more changes post a successful change in the company!

Lonmin, (having traded it a few times) where according to the gossip out in South Africa is contradictory to the share price movements. Admittedly they have a few staff 'communication' and cost issues, but the M&A in South Africa for large projects is far from finished. Sibanye decided to acquire stillwater mining company for $2.2 billion, instead of LMI.  

Will Sibanye be back at the table having been so close? One suspects so. Plenty discussed in various papers about this and the recent public walk away by Sibanye to complete on Stillwater Mining. Perhaps they'll be back, however with a fairly decent platinum price ($990/oz.), and costs controls being worked on with a simpler mining structure, it's not for the faint hearted or impatient, at these prices, some see further downside, but likewise, orphans and fainted-hearted shouldn't apply. It shall be interesting, all the same. Tightly held at times, it is very volatile.

Not so amusing for Caterpillar, yesterday I’d decided to go short on Caterpillar (CAT), the US construction figures were off and missed even the most conservative expectation. Caterpillar has a long way to go to benefit from the ‘Trump-Tastic’ and now with serious issues relating to a raid by US federal agents as part of a tax probe, it’s a welcome benefit to the short...

In France, populism is growing behind Le Pen, could this become the start of things to come. Most certainly in Spain, discontent is growing. One shouldn't discount those that are disenfranchised or feel trapped in a proverbial corner, they just may be forced/motivated to vote a la Brexit.

The global advertising landscape is shifting, I've been doing some work looking at the real advert figures vs the unaware audience, which despite not even noticing the advert, are considered to be a viewer of the advert; in measured terms, what is the organic reach of the advertising platforms of today compared to the success of yester-year. Too much reliance put on what people perceive as value and reach, when the results are now not materialising despite the alleged success and brand awareness. If there isn't a significant change in the measured reach of an advert and acceptance of smaller targeted campaigns, there will be a reversion in trends.

WPP, are the barometer of expectation in the advertising sector and are not overly positive for 2017, preliminary results. Its not looking so rosy for the eternal acquirer WPP. Is there a goliath out there that will be impacted more by this, I think so! 

Atb Fraser

Please remember the views are my own, etc...it pays to do your own due diligence. Common-Sense Rules apply!

Morning Mumble: Iofina (IOF), Beowulf (BEM), Victoria Oil & Gas (VOG) and Foxton's (FOXT) the commission debacle.

Good Morning,

If Iofina's (IOF) water project is such a "non-core asset", why is the share price reacting the way it is? When investors learn to read accounts there's a difference between positive EBITDA and being cashflow positive. The company admittedly has a decent patent, the problem is there's an unrealistic belief in the profits (and or cashflow) that can be made in the current Iodine market. 

SQM gave a good indication of their intention at the last conference call on the 20th May 2015. Those thinking it’s despicable to short a stock that has now removed the potential revenue prospects for the foreseeable future, it’s wise to consider the facts. There's a global strategy in the absence of higher prices to increase volume (akin to the iron ore story). 

When considering SQM's (Sociedad Química y Minera) (+ Chile's) approach including those of the Japanese, China, Turkmenistan, Azerbaijan, Russian and Indonesia (we'll exclude America's production) all aiming to produce the same if not more, the price isn't likely to recover any time soon. With Iodine demand set to increase circa 3.5% globally, most producers are aiming for 5+% production growth

Over to SQM to give IOF the realities of their cashflow situation (more important than EBITDA in this case). From SQM's conference call statement, Revenue reported for the first quarter was in line with expectations given our current strategy; lower average prices have helped stimulate demand, and this, along with a more aggressive volume strategy have aided in higher sales volumes during the first quarter. Prices, which were down 30% compared to the first quarter of last year, were anticipated, and are also in line with this strategy. Going forward, we expect iodine volumes in 2015 to exceed volumes seen during 2014 by around 5%.

With Beowulf (BEM) test work delivering 'super' high grade concentrate over 71 per cent iron. Normally one would get excited about such results had it been anywhere nearer production and without a suspicion of tin rattling. EMC: Beowulf 1st June 15. With 68% prices varying, the average quote this morning ranged between $70-100/t. It’s certainly going to make Kallak more enticing as the costs per tonne mean anything below $90/t due to location and wage costs is unlikely to provide any cashflow. It'll add value to Kallak, but wise to consider how far away such a project is!

Victoria Oil & Gas (VOG) gave a decent new thermal gas connections and production update. In the past, VOG have set some targets that in hindsight may have been unrealistic. Their target of "10.5mmscf/d target for the calendar year 2015," was conversely as poor for being on the low side. Today Kevin Foo, has implied they're going to exceed the 10.5mmscf a day." This is on the back of gaining 3 new c customers, Dangote, New Foods and Sic Cacaos. 

VOG are now focussing on additional customers in the Bonaberi industrial area across the Wouri River. VOG's monthly average gas consumption is triple the February average and they expect to exceed the 10.5mmscf/d target for the calendar year 2015. As always never rate the management here, things are changing positively but the management is as much a risk as the geopolitical issues. Target price revised towards the £1.15, having derisk it’s a long-term hold. 

As often is the case, utility companies suffer with leaks and supply constraints, it would appear if the "gossip" is correct that VOG's biggest leak appears to be a contractor. If so, the near 18 scuffs a day peak recently achieved but not in the public domain will not have happened. If parties, whether investors/speculators or gamblers wish to rely on this information, they would be wise to consider the legalities of such info. 

Finally, Foxton's (FOXT) is being punished this morning with a nervous silence from the company. Foxton's appear to have been charging "some" customers a commission on top of work completed. This in addition to the alleged fee/commission that they charge the supplier/contractor whom resolves the issue. I thought landlords knew about these practices. Having expanded into managing the neighbouring properties of rentals near mine recently, some are pleasantly surprised

Irrespective of the legal bill involved in this, the damage is setting in on the Foxton's letting department practices. Anyone whom owns UK property and utilises a letting agent is simply throwing money away, save for a few exception i.e. living abroad or more than 250 miles away from the property. Credit references and employer checks are between £50-100, advertising for tenants circa £40 a void (empty property) and/or even getting on Zoopla and Rightmove + Prime Location for around £60 a property for 3 month periods. Far outweighing the costs associated with an agent. They merely pick up the phone and speak to yourself about the issues...money for old rope. 

Atb Fraser

PM Bolt-On: EMED the issue of 2 Billion shares (See what I've done there), should shareholders vote for it? Hmm..

Good Evening,

A last minute update from EMED today appears to mean most holders will be diluted on a fair value case. Had the open offer had an element of 'equality' about it, then all stakeholders would have/should have been pleased. 

Assuming the maths is correct, 2,060,520,685 shares in EMED are hitting the register (please note the term) on the 24 June 2015 (subject to approval) in to the long only camp. EMED infer they can achieve the expansion from 5mtpa to 7.5mpta in Phase 1 ramp up, 2.5mtpa above the previous projections. 

With a soon to be 72.5% of the capital to be in the hands of four shareholders, one would be wise to ascribe a certain element risk to this. Its acknowledged the articles protect shareholders to a degree*, had they all been offered "openly" for the capital raising it would not have been an issue. The terms could have been better, but unsurprisingly it was rather obvious, EMC: EMED strong arm. 

Perhaps the punters should formalise a shareholders group, there's near 14% of them on the register (currently but not for long)! Yes you stale holders, get savvy and start protecting your investment. 

Avoiding going into the analysis over the mine plan, costs should reduce per lb to near 1.87-1.94/lbs (EMC's estimates) all in (not C1 costs but around 11%+leeway). The numbers appear to stack up well for ramp up in production and the long-term prognosis for 'Rio Tinto.' 

With such a capital raising, removal of convertible loan issues and offtake agreements for an expected 100% production, the project is de-risked for any (possible) finance needing to be inked. 

Offtake agreements are now revised upwards from the previous 51% ish, with Orion receiving 31.54%, Trafigura Pte Limited 19.34%, XGC 49.12% Liberty Mines and Metals holding zero%, but potentially seeing value by their investment. 

All the above assuming one has an understanding of the copper outlook, belief in the EMED suggested copper outlook consensus from the March presentation and Chinese market demand. Simply put, if one envisions a perfect market, there's no reason why EMED cannot be a longer-term hold, with hopes of ten pence+ some. 

Alternatively, current shareholders can propose an different options for the financing. Brave call, but all the same perhaps do’able if one was well organised. Assuming one’s average is below 7 pence, you could be handsomely rewarded, "if" the potential majority holders play nicely, with a register looking like.........HKX 767,655,838 (21.9%), Liberty Metals & Mining 489,473,684 (14.0%), Orion 509,598,282 (14.6%) and Urion 770,530,339 (22.0%) is it possible? 

Trafigura's dispute by its subsidiary Impala Warehousing and Logistics with Wanxiang Resources is unlikely to impact on EMED even as a forced seller. Over to Decheng Mining, apologies for the humour here!

Atb Fraser

Disclaimer

Notes: Urion, Urion Holdings (Malta) Limited, a wholly owned indirect subsidiary of Trafigura, XGC, Yanggu Xiangguang Copper Co. Ltd, Orion, Orion Mine Finance (Master) Fund and LIberty, Liberty Metals & Mining Holdings, LLC.

*On 7 May 2015, the Company entered into the Concert Party Determination Letter with Liberty Metals & Mining, Orion, Trafigura and XGC, whereby the Board made a determination for the purposes of a restriction contained in the Company's Articles which prevents any shareholder (whether by himself, or with persons determined by the Board to be acting in concert with him) from acquiring shares which (when taken together with shares held or acquired by persons determined by the Board to be acting in concert with him) carry 20 per cent. or more of the voting rights attributable to the shares of the Company.  In reliance on certain confirmations given by Liberty Metals & Mining, Orion, Trafigura and XGC to the Company in the Concert Party Determination Letter, the Board determined that none of Liberty Metals & Mining, Orion, Trafigura and XGC shall be deemed to be "acting in concert" with one another (or any of their respective affiliates) by virtue of carrying out or undertaking any potential activities in connection with the Proposals.  In addition, the Board has also determined that the subscription of the Subscription Shares and the Capitalisation Issue Shares by the Investors constitutes a permitted acquisition for the purposes of the Company's Articles.

Morning Mumble: Victoria Oil & Gas (another EMC Amendment to their RNS) & Iron Ore (on my Christmas list), any old iron (Fortescue Metals Group)

Good Morning,

Continuing on from my theme in March, EMC: VOG March 2015, today Victoria Oil & Gas update the market on Logbaba Power Station Online. Excuse the sarcasm, but if the power output has increased then surely ones production has also. VOG are in danger of achieving what they say, this is a rare event, as long-term followers should know well.

The EMC does not change the view that the management are the risk to any VOG holding, the asset and developments are good, the power generation means VOG should have a utility premium applied, subject of course to geo-political and management discounts. Today confirms, average gas production since the 50MW has been online is 14.5mmscf/d with a daily peak of 15.3mmscf/d, all good for the bottom line. With that in mind, a review is required, expect a re-rating. 

The market belated realised that BLT (EMC yesterday) were slowing production growth, so with the closure of shorts globally, the prices motored near 5-6%. However, overnight we've had Vale, doing the exact opposite, with a record quarter! Vale's Q1 figures, N4WS expansion plans are likely to have an impact and make up the shortfall that BLT had aided the market with. 

With limited time, analysts may be wise to consider issue that producers even in China are assessing the viability of expanding production/operations to compete at these prices. Certainly, Rio, BLT and Vale's positions are not assured, viable yes. The issue the market has, or should have, is the closures of mines are not happening quick enough to reduce supply. Perhaps the forecasts will need revisiting on price. 

Staying in sector, Fortescue Metals Group (ASX: FMG) have finalised the 'refinancing', where every man, woman and Wonga loan specialist jumped on the bandwagon. Quite clearly showing FMG's management have panicked, with an interest offering of 9.75% per annum, uplifted from the original (USD) $1.5B offering to $2.3B. When there is such an increase, save for income hunters realising the benefits, questions should be raised about the pricing. 

Over to FMG, “We’ve seen strong demand from the market which will result in repayment of our 2017 and 2018 debt in full, refinancing of US$450m of our 2019 debt and an additional US$350m to further strengthen our balance sheet.” They only achieved such an uplift because of a mispricing on the interest rate, admittedly it removes a few obstacles, but all the same, the % is laughable, admittedly it gives FMG fresh 'hope,' One suspects they board would be wise not to beg for production cuts from the majors again...any time soon.

Sirius Minerals (SXX) should be congratulated for requesting the suspension of their stock. Those naughty traders whom planned to travel up had all their plans thwarted at the last minute. One hopes they obtain refunds on their accommodation!

On the Anglo Pacific (APF) news front, APF have only gone and given some guidance on Kestrel. EMC's view this should be shortly after Rio's rather than two days later. Its positive, APF estimate that Rio Tinto will mine between 60% and 65% of total production within Anglo Pacific's royalty lands during 2016. Being a buyer of APF (not without risks), the amount of investments and financing sunk into royalties, one would have liked to see APF be more proactive about their investments. This is the third time now!

Little time to summarise the Gemfields (GEM), (not Gem Diamonds as one confused analyst got today), the auction results were crap, albeit allegedly at a profit even at $4 a carat. We'll avoid sugar-coating, so it’s wise to read the auction results. One has a suspicion there's plenty of 'lower' quality stones heading to eBay at a large premium. Those cheapskates should set up alerts now! 

What GEM are doing utilising a decent grading system to enable bidders to have confidence (or not) as has been evidenced from the previous auctions. Expect some positives in the short-term, especially after a few analysts were on a jolly to visit operations. 

With a positive Montepuez maiden resource due in H2 (need to check), it’s likely to enable a clarity on the valuation of the company. With limited debt ($20M last time it was checked for Kagem), cash at the bank, there's a lot worse out there. With an improvement in sector financing and a sensible approach to improving production, GEM are benefiting, out-performing the sector near 40%, contrary to the view of EMC. One has to wonder whether the 'share options" granted 7 days ago is taking the proverbial somewhat. 

Atb Fraser

Morning Mumble: Victoria Oil & Gas and...

Good Morning,

Why the need for so much, VOG's RNS today should have read:

GDC-ENEO Pipeline Installation and Genset Update, Cameroon:

• Gaz du Cameroun completes all pipeline and metering installation to Bassa and Logbaba power plants ahead of schedule, meeting all contractual obligations

• Pipeline now "gassed up" and completion certificates issued

• Twenty two Gensets with a combined capacity of 28.6MW arrived at Douala port and cleared customs - sixteen of these (20.8 MW) now onsite at Bassa power station and six (7.8MW) at Logbaba power station

• Seventeen Gensets (22.1 MW) scheduled to arrive in Douala on March 15 2015

• Combined total 50.7MW.

• Target date for commissioning of both plants (50MW) remains end March 2015

Instead you can read the full announcement here. The EMC view on VOG is unchanged, VOG's asset is good, the management needs overhauling including investor relations and market updates.

Antofagasta (ANTO) have protests at Los Pelambres by the locals (doesn't bode well for sentiment). The drought in Chile (the alleged caused of the protect) has been significant, impacting not only on the locals, but also mining with no exceptions to sector including Copper and Iodine (Inc, Sociedad Quimica y Minera (SQM)). 

Los Pelambres production is not insignificant (2013 figures), but has suffered grade declines (industry issues for larger operators). One assumes ANTO have got a plan B if air travel is impacted. With the corruption in Chile being far from exclusive to petroleum, expect more discontent. See: SQM announcement. 

With GLEN's confidence in copper already being shown to be wrong, on Friday (afternoon there's a surprise) with POET's day in full swing GLEN's William Macaulay flogged 53,756,571 shares at a price per share of GBP2.8174. Confidence? With that in mind short-term traders have elected to punish the stock. 

Sylvania Platinum (SLP), the once upon a dog of mine until I woke up to the realities of shorting has been awarded the PGM Mining Rights and Iron ore rights. Save for the former, SLP transfer all of the iron, vanadium and heavy minerals to Ironveld (IRON). Long short-term and long-term on both, there's a finance update from IRON and a dividend announcement anticipated on SLP. One won't get too excited. The dividend announcement by the PGM mining rights already risk the dividend. Will save the other commentary on this for another day.

The common-sense question of the day goes to Alecto (ALO) and Desert Gold Ventures Inc. (TSX.V: DAU) whom have entered a Co-operation Agreement between their two assets. Why the two entities don't just merge and remove an entire level of corporate admin and expenses it beyond me! Small beer, but a combined entity has a better chance...

This morning various analysts picking up on the thermal coal issues, it would be wise to start considering a floor to pricing, at least in the short-term. Over to South Africa to fire the first shot. 

Both WTI and Brent Crude slipped just below a vital level of support, $49.56/bbl. and $59.39/bbl. respectively, expect some balancing around these levels and ignore the support levels for now. There's a healthy level of demand around these price with modest fluctuations not likely to see too much pain (read as downside) for the producers. 

There's some more reliable gossip around about Ithaca Energy (IAE) and Gulf Keystone (GKP), the former getting some coverage of being a good recovery play with lesser risks and the latter having some serious interest. GKP's price I'm led to believe is the sticking point with the management 'unable to recommend or back the alleged offer price.' Sounds like a very low ball offer, one hopes GKP haven't been got by the short and curlies! 

With various items afoot at the moment, it’s a short one! 

Atb Fraser

Morning Mumble: Was the PM Add of 23/02/15: LGO predictable including the debt ++Plus the de-constructed hopes of the BLT Sandwich

Good Morning,

Many thanks for the enquiries why there has not been comments but it’s simply put, work is very busy with some work for those entities looking to profit from shorters, the white knights. Fear not, there were no cuts or bruises and thank you to certain parties for those mad enough to allow the Ninja known as my daughter tearing up your office whilst in meetings. 

LGO Energy (LGO) had the appointment of a joint broker on 5 January 2015, EMC: LGO Energy. Although not much of a short its always nice to pick on these eventualities that are more certain such as certain entities companies contradict contradicting their "cashflow" forecasts and debt arrangements and whilst raising and raising, and...You get the idea. Today, there is the issue of equity and oil swap arrangement with BNP. Today's news makes it wise to close the shorts on LGO.

The arrangement may be positive for LGO longer term, but if one looks back at the placing etc. There are material risks investors should not ignore including the "revenue per barrel of the Spanish assets all those years ago". LGO is in the same basket as Victoria Oil & Gas (VOG), where the management decisions come with certain risks that can have a material impact on the value of a holding. Although the SP held up better than envisaged with every man and his dog working out the obvious. (Link relevant twice today EMC: JRG + LGO Placing (history repeating itself))

Had Anglo Pacific (APF) been proactive with their investor relations they would have announced to the market that Largo Resources (TSX: LGO) received a non-binding indicative term sheet from its consortium of lenders (Largo link). TSX: LGO are hoping, subject to committee approval, to defer its debt amortization schedule and extend the maturities for its construction debt facility and its export credit facilities for its Maracás Menchen Mine. 

TSX: LGO give an update on the progress and the asset for investors that like layman's terms. The market should now be accustomed to the poor updates as shown with Isua Project in Greenland (EMC: Isua). APF will obviously be busy hunting a transformational top quality coal royalty to be bothered about something they paid $22M only 8/9 months ago. So for those holders unable to gain anything useful you read it above in the Largo link. 

BLT (BHP Billiton), with Andrew Mackenzie (CEO) opening his 2015 Interim Results Presentation by raising his arms to demonstrate how comfortable he is with the results. The market is going to like the interims. South32 (Known here as short32) demerger remains on track to be completed in the first half of the 2015 calendar year. 

Net debt was higher than EMC considered by circa $500M but negligible in the grand scheme of things. Post a few items needed more urgently its maybe wise to revisit BLT. Returns are lousy in % terms of capital applied, but the market ignores such things, so like Rio, over to the bulls to assist the sensible in making decent intraday gains. Copper (circa 11 mins in) within BLT suffered the same woes as most of the industry with energy inc. water and grades being lower. Despite lower prices BLT have done better than expect. Iron Ore update (circa 13 mins in)...too much to cover in such a short time.

Just Retirement Group (JRG) being a trade EMC: JRG + LGO Placing (history repeating itself). Comedy on the OPEC Emergency beliefs at these prices, investors and analysts should not read too much into "news" that contradict what statements have been made in the past. 

Atb Fraser

Morning Mumble: Oil the support...and a late night Cocoa or Coffee & a telling off for certain holders.

Good Morning, Coffee! Well cheaper coffee!

Nearly 1 month ago, EMC - Morning Mumble: China Data yet again contradicting those overly bullish analysts & shorters heaven! Certainly the Christmas Cheer! See: Brent support...With Brent Crude trading at $51.33/bbl the wiser folks will be reducing shorts or hedging as the odds of greater or severe drops has been reduced but is far from disappeared.  

Yesterday the EU reported the drop in consumer prices that has only gone to assist the negative outlook (Bloomberg: consumer prices). The consequence being that it has improved the likelihood of the oil price staying lower for longer and limit the potential of a recovery above $64/bbl (Brent) (approx. and under review). Over to the EU for the stimulus.

The speculators (long) are aware of risks with a short-term drop in Brent yesterday below $51/bbl to $49.66/bbl indicating there's a good chance of another step-down, especially if speculators absent themselves. Over to OPEC and the rebel components to force an emergency meeting to cut production if anything near $43.20/bbls is seen. One could almost place a Star Wars theme to the story and we would be wise to keep a close eye on ICE Futures Europe (MarketWatch Article) for a new lows in futures.

Any positive movement circa $3.50-$6/bbl (pending who you read) in futures will create speculation within shipping, the higher figure being required due to charter rates being significantly higher. One would be very surprised if ultra-slow steaming is introduced a la 2009, save for some Chinese influence. The Chinese seem willing to bail out higher cost South American countries rather than see supply reduced Chinese, Venezuelan presidents vow enhanced financing cooperation (Xinhua Net)

Will ignore the fact that ICE Futures Europe are to start cocoa contracts in Euros from April and save it for another day. One hopes United Cacao (CHOC) will be aided by this seeing as prices have fallen to the lows of 2010. With chocolatiers (term used loosely for some companies mentioning no names) committed to higher prices, could Cocoa have the glut that Oil is seeing today in 12 months? Buyers are totally absent from immediate physical markets (cash). Price increases will obviously have to adjust to demand, thus the consumer being the price dictator will dictate the supply chain. Amazingly similar to coffee, with a drop in prices 24-27% pending supply. Who'd have thought it...see my commentary on FTML in October 2014 for more detail on coffee.

With food pricing becoming more transparent globally, one envisages consistent pricing with greater speculation during periods of uncertainty. This has not been the case, as evidenced by the spike in coffee last year, which was unfounded (the short). We have Tesco's informing us of their trading update and plan of action. plus flogging Blinkbox and their Broadband Customers to TalkTalk. Goodbye Divi...but its a lot better than the market thought! Later perhaps get some response from Duncan as he's been on the ball so far!

As a side thought to TalkTalk, do parties join up to Tesco on price or because they don't want to be part of another network. One suspects customer loyalty was the primary focus...good luck with the margins there, albeit it would be interesting to see the acquisition costs

Caledonia Mining (CMCL) 2014 Production Update and 2015 Production Outlook does not bode well for the recovering SP with grade declines a poignant reminder of the issues facing miners on a day to day basis. Its disappointing the lack of commentary on how the recent oil price drops have impacted on CMCL energy costs and all in costs. The un-interruptible power supply agreement must be under review in light of diesel costs coming down in Zimbabwe. Is it time to review their needs and consider the stand-by generation costs once again seeing as they're paying a hefty premium for assured supply which still has interruptions (albeit the company perceive these as acceptable.) Hope/Jam placed on the revised investment plan. It will be very surprising if CMCL hit the same production as the year just gone...

Kenmare Resources (KMR) decide today's update should be related to the share price which is exactly where it should be in light of the risks associated with refinancing and Iluka Resources determined and demand approach to their Due Diligence. One can only assume Iluka Resources will know beyond doubt if KMR is for them. With a significant amount of leverage again Creditors (ransom), Iluka may just be able to structure the deal so all KMR holders debt or equity take a hair cut in the process. Not one for those whom like premium bond style investing.

The words "potential default" should not be ignored in this RNS nor should the returns to shareholders when compared to associated board costs and remuneration. Clearly I should consider another career...perhaps at the Pru? If certain parties are reading, they'll be wise to think about my thoughts once again about KMR. Forget told you so, parties would be wise to consider what justification there was in holding the stock with the outlook, the debt and management. You have been told.

Some cheer for Victoria Oil & Gas (VOG) whom are now in receipt of the $6.4m balance of $10.1m Cash Call Received from RSM. However there's gossip that as a result of Oil declining significantly certain parties wish to revisit their pricing contracts. Perhaps VOG will update the market on this if it's correct or clarify where possible the contract terms. Obviously there's more to the price than just oil, security of supply, economic and environmental benefits, however at the end of the dead, one is always wise to consider there bottom line (the client). The risk is common-sense and should not just be ignored as unlikely...

Now as a frequent traveller on trains the intention of thetrainline.com (I'm refusing to link) the RNS cannot be ignored. The deal with ATOC is viable, however one cannot help but wonder the replication of the APP and business now the value has been placed on the IPO. Those die hard IPO's of IT will be obviously queuing up, the shorts would be wise to wait post the steam and puff.

With rumours bouncing around regarding Circle Oil (COP), the director changes cannot go without a mention over the past two days, with the appointment of Susan Prior as Group Finance Director and the appointment of Mssrs Antony Maris and David MacFarlane as Non-Executive Directors of the Company. Next door to Gulfsands (GPX) whom are not without issues above and beyond the current global pricing crisis for the minnows, could we be seeing some more consolidation? With casualties starting to come thick and fast, Europa Oil & Gas (EOG) states the obvious today with an update. In the absence of any improvement in oil futures above circa 20% one has to question why you would hold any tiddler stocks save for higher risk take-out speculation nevermind the debt issues of certain companies!

With an unsurprising setback in Sirius Minerals (SXX) application process things bobble along without too many issues. Phosphate prices will be further under pressure due to declines in food prices this will only benefit SXX's marketing approach and offtake agreement process.

Atb Fraser  

Proof-reading no doubt required.