Morning Mumble: Afren (AFR) favourable weather & Taylor Wimpey (TW.) almost a copy & paste job! Anyone for Yellowcake...

Taylor Wimpey PLC InterimManagement Statement comes across exactly as thought. With such a predictable level of trading it was a credit to Pete Redfern, Chief Executive of TW. to find new terminology from normalisation and normal levels to moderated "but remained" positive. Over to Pete from the RNS, "We are encouraged that conditions have moderated but remained positive. Today we are operating in a UK housing market which is growing steadily and sustainably."

You'd be a fool not to like land especially in the UK where its limited for obvious reasons, building land and the land bank if sensibly optioned/bought is always going to be in demand. The problems will occur during the cuts. Its not rocket science to know the UK Government must balance their chequebook so more cuts on the way as the FT et al have all been covering Britainand the cuts: Election winner faces unfinished business. 

These cuts are likely to make people consider the value of their housing £. This doesn't mean there's an abyss for new home purchasers, more its likely to drive the existing housing stock sales (volume), not the prices. Expect some margin pressures on the house builders within the cycle, which all the house builders have been uncannily absent on commentating on. The market will price in the positives, because they aren't a negative...when should house developers be a premium or discount to NAV!?!? There is a common-sense answer.

The MOD is dealing with cuts (and potential cuts) and has some issues that its suppliers as they have always benefited from in terms of cost controls. This, I am reliably led to believe, delayed the Royal Navy’s new Type 26 frigate (do not fret I'm not getting in to boat spotting) where cost controls could not be agreed. So with one astute chap kindly pointing out that a recent discussion and visit to consider the French and Italian FREMM Frigate, is another bargaining tool being used against BAE in the negotiation process (expect news January 2015). 

Could the UK Government be giving Frenchies and I-ties the work...oh yes there's a real risk, oops possibility. It is however something Ministers are keen to see built on the Clyde in BAE's docks as an offset for the Scottish vote, more so if Labour get in. 

Afren (AFR) today announced that they had a decent weather window with an update on their NigerianOperations. In the news, AFR inform holders of the upside with spudding the Ameena East well on OML 115 and the Ebok Deep exploration tail targeting 50 mmbbls of gross unrisked resources. The deeper Qua Iboe and Biafra reservoirs is expected to commence in Q4 2014 following the completion of the third new producer at the NFB (North Fault Block). The cashflow for AFR is likely to improve significantly at the latter end of 2015. The sensible money would be post any Ameena East news...or to add.

Today's the day for Anglo Pacific (APF) to finally fez up about its write-down on the London Mining (LOND) with a £15M (GBP) impairment charge in Q3 Interim Management Statement (APF). For the savvy (quite a few readers here) they noted the connection with LOND and the lack of prospects for Isua license. What is surprising is despite the positives coming forward in terms of royalty, the royalty related income in the third quarter was a derisory of £0.5m. There's first production at and sales achieved at Maracás (Largo Resources) which APF expect a positive contribution to their balance sheet via royalty income during 2015. APF maintain their divi which is circa 7% and there's a reason for that. The jam of a high royalty transactions over producing bulk material and base metals is getting a little thin.

However Four Mile (The Uranium Mine in Oz operated by Quasar Resources (General Atomics Subsidiary) and Alliance Craton Explorer (ACE) isn't going as well with the threat of litigation already mucking things up. Production at Four Mile is expected to be 2.6Mlbs of uranium ore concentrate (2015), but as APF rightly point out royalty income deferred until 2016 due to Four Mile stockpiling production. 

With Four Mile production replacing that of their neighbouring Beverley plant (no royalty for APF) its surprising they're even bothering with production. If one is quick to assess Four Mile (& Partners) they need a Uranium price of +$41/lb (approx.) to even break-even. With stock piling being considered the best option, which questions the viability or perhaps evidences the issues within the JV.

Over to AllianceResources to upset the apple cart whom want the cashflow funding expansion. In September, Four Mile's cash costs per lb of UOC were $33.23per lb now circa $40.81per lb UOC (uranium ore concentrate(s)). Quite why Alliance Resources had not dealt with the sales issue within their contracts with the operator beggar’s belief, so voting against any budgets is immaterial to the outcome as they're the minority holder at 25%, the budgets will always be approved according to Quasar's requirements/demands (75% stake). 

There's rumours of a large seller (with relief) of yellowcake whom needed $39/lb well played...!

We welcome what will become a very illiquid stock almost from day one, Mortgage Advice Bureau (Holdings) plc. Please do not confuse this with the Citizen's Advice Bureau. 

No time to cover the trading in Gold and Silver today, but it would be wise to note the volume and slippage that occurred in Asia nor the Central Rand update (CRND). With the current cash costs, $150M is a hefy premium, alas they're saved thanks to the principles of a non-binding agreement. Amara Mining (AMA) or CRND, I know which I'd rather pony up $150M for!

Atb Fraser