Morning Mumble: Mundane Iron Ore, Spot Supply (A Hedgies heyday!), Oxus (no news) & Woodstock & could Atlas be a buy!

Good Morning, 

The analysts and reporters are of the opinion stockpiles at ports are 'yet again' too low and there's a sudden need for restocking. One would be wise to consider how China have managed their supplies, rather than the inaccuracies that are cited. With spot supply in limited demand, China are a lot better at managing their orders than what the markets are giving credit for. 

The steelhome china iron ore total ports inventory reports a circa 84Mts at ports. This should perhaps be considered within the normal range, with slowing demand. Remembering it’s a float for the steel economy and should run between 5 and 7 weeks of total demand. Admittedly yesterday's figures suggest it’s dropped below 5 weeks demand. There's a simple explanation for the spike, one that was pointed out awhile back, that being the hedgies have realised that a lot of commodities have limited physical spot supply. 

China has the additional woes for short supply, not only a reduced number of smaller privately owned iron ore operators coming back online post their winter break in the north. The supplies that would have naturally be replenished by internal production are now being sourced on the market via spot supply (the spike). Amazingly some state owned mines with costs at $70/t+ have been refused permission to close and source on the international market. The Chinese government may feel security of supply is required, in addition to contracts with steel mills and avoiding a massive spike in unemployment. 

The Chinese of course may do something about their northern mines (perhaps 'development' Grants) to avoid a growing discontent within the entire mining sector. With proposals being considered for subsidies in hardest hit coal and iron ore operators to at least maintain a 'sort of production.' (Direct quote from a Chinese iron ore trader there! 

Thankfully it’s made it very easy to make some decent gains in weeks rather than months, with spot prices moving 8.5% in 6 trading days at circa $62.5-63.10/t. There's a risk of limited upside so expect those able to supply the demand to take some healthy profits! 

With Xinchuang Li, (president of China Metallurgical Industry Planning and Research Institute, & Deputy Secretary General, China Iron and Steel Association), believes the range will be $55-65/t, implying that the peak seen on Weds/Thurs of $63/t+0.9% is towards the top of the Chinese industry consensus (read as wanting acceptable price). One would be wise to have a confirmed change in direction before speculating. 

The hope factors are reliant on the Chinese government increasing spending in "infrastructure" projects to motivate the economy. This may be a little optimistic with a shift from manufacturing, property (commercial and residential) and infrastructure towards service-based industries. Remembering of course the long-term averages (4-5 years) for iron ore stocks at ports is a smidge under 90mts it’s not the panic some would have you think it is. One could argue its almost like the Chinese are fracturing the market!

The positive is Atlas Iron is back in production, even coming out with resources upgrades, a modest "non-cash impairment charge on assets, a royalty relief period and a deal on costs including capital raising. It’s almost as though Atlas is an entirely different company! With mining restarting and Mt Webber likely to help reduce operating costs further. Post reorganisation, it could almost be worth a punt! 

With gossip about Fortescue Metals Group (FMG) in Australia, could they have a very sizeable Chinese partner at operating level or a take-out; surely Baosteel have been approved for 43B RMB overseas investment (imply 25% upside if there was a take-out on FMG). With limited competition in the market for such assets don't get too over-expectant about the price of a deal, or any deal for that matter, so being without intelligence it was rude not to speculate on the stock! 

Oxus Plc (OXS) final results in summary they cannot tell us (shareholders) anything, they remain confident "of fair compensation" for their claim, and they've put in a facility just in case it continues for a longer period of time. Quite what the panel have been doing since May 2014 is anyone's guess. With clarity on the actions of the Uzbekistan Government, it’s not difficult to assess the quantum surely! Even as a range, perhaps one would be wise to consider there's some 'behind' the scenes discussions or cattle trading is going on that 'may' have delayed the outcome! 

Having not "bothered" much with Minco (MIO) for some time (EMC: July 2014) the Q1 Results aren't really anything to get too excited about. The currency gains should have been expected and the cash on hand and value of investments is a plus for those calculator investors and giving appreciation to the SP today. 

What the market should consider is the possibly development of Woodstock being considered by a Chinese entity, with some "potential" upside. Supported in part by cash MIO has potential prospects at long last. After near a year with little price movement, the 'tide just could have turned for MIO" if they can complete on a deal. It would be an astute move by Hongxin Group in terms of a currency hedged producer outside of the Hubei province. With a deal last year in the Ukraine, it’s not beyond reason that a Canadian project could have strategic importance. 

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: Disclaimer, Scotgold Resources (SQZ), Anglo Asian Mining (AAZ)

Good Morning,

The past few days have been rather silent, for a number of reasons. It’s best if readers see the disclaimer, which is already covered by Google's "disclaimer about content." In the event parties disagree with the disclaimer either of EMC or Google then they should close the webpage and not return.

SGZ came out with a resource upgrade on their Cononish Gold Project (in Scotland not as some think Ireland or Cornwall). SGZ have increased their resources by revising their Mine Development Plan, en par to a Prefeasibility Study. One got all excited about the announcement and share price to look for the borrow to short, sadly there's zip! Even retailer spread bet firms couldn't/wouldn't! Although it was intraday greed! Purely on a belief of an unjustifiable appreciation in the SP, normality has since returned.

Anglo Asian Mining final results, continuing on from the director loan from EMC 22nd May 2015 Director Loan AAZ's going concern is a tricky statement. Its common-sense the AAZ's forecasted cash position and ability to repay debt have a number of assumptions. 

•  Achieving the forecast production of its gold production operations, principally its heap and agitation leaching; [Also an assumption about grades and recovery should be considered].

•  its gold price assumption; and [it’s difficult to validate that gold price assumptions as the all in associated costs per ounce appears absent].

• the small scale flotation plant being commissioned on time and achieving its planned performance. [Crucial].

Bold is EMC not AAZ!

With some sensible rearrangements in the debt repayment to the Bank of Azerbaijan (IBA) it is a going concern. With cash at the end of the year at less than the price of a semi in London, it’s no wonder the director loan was organised, and in hindsight, one could have argued a higher % should have been charged.

One doesn't envy AAZ if their grades drop below 3g/t as costs will increase and thus impact on cash flow. Personally, AAZ require circa $10M in capital to improve the balance sheet, and in an ideal world $20M would be welcome. The leveraged play at the current levels means they can survive as long as IBA are willing participants. 

EMC estimated of cash costs were a little conservative at near $945/oz AAZ have come in at $971/oz. Simply put, it’s not without its risks, if one assumes they can continue with grades above 3g/t, keep cash flow positive, floatation plant on time, budget and working properly, improving recoveries, oh and the gold price remaining stable. Please remember, every Chinese person and their dog is favouring equities (no doubt leveraged) over gold and increased supply in the gold market. It doesn't sound that great, especially with net debt of $52.4 million.

Kingfisher (KGF) came out with Q1 trading statement. No change in sentiment here, one just needs the buyback to end and the realities of poor trading and conditions in France (the acquisition or lack of may have been very fortunate to KGF). 

Screwfix are still cannibalising revenue from B&Q, one wonders whether KGF would be better shrinking B&Q stores and farming space out to other providers whom don't duplicate the offering. Perhaps something for supermarkets to consider or...car sales or similar? Gyms? This would maintain Screwfix in growth and costs seem to be easier to control and traction in the market making it the shining star. 

KGF are quick to point out about margin improvements, although on the comparative period this would not be hard! UK gross margins up 90 basis points reflecting weak comparatives (-210 basis points Q1 2014/15) due to more promotionally-led showroom sales last year. 

One has to wonder whether KGF's costs focus is something they shouldn't be echoing to the market, more so maintaining efficiencies. Costs benefited from on-going productivity initiatives offset by phasing of marketing costs. Could Kingfisher benefit by cancelling their over 50's discount scheme that appears not to be abused by anyone whom can grab a granny/granddad. It does not promote loyalty, it just promotes abuse of the system! 

Its somewhat hilarious commentators and the press are suggesting the handyman is driving sales with a belief all these workmen are disappearing off to Screwfix. Having been in a Screwfix recently, its surprising the lack of trade, although Screwfix are enticing trade with free tea and coffee when picking up goods. 

Simply, the punters have realised the catalogue model is easier, you don't have to walk round a huge great bloody warehouse to then ask where such and such valve is. For heavy materials or plants there's a difference, simply put, for tools and "Screwfix's" key market, you're better off getting someone else to get locate and organise your order for no charge. 

Screwfix simply meets the three C's of Convenience, Consolidation and Conservation of time, in terms of marketing. As always, ones very foolish to bet against share buybacks. Today was merely aiding closing the longs as the market laps up the premium applied to the buyback that in reality shouldn't purchase any stock above 325 pence. 

Iofina (IOF) popped their final results out yesterday. There's a big difference between positive EBITDA and operating profits. Global iodine prices have continued to be under pressure, we'll ignore SQM (Sociedad Quimica y Minera S.A) issues as such, on the basis they have a very different balance sheet and muppets seem to think it’s relevant. So save for comparing margins or performance within sector the EBITDA figure (or lack of) is like a chocolate teapot for a developing company.

Iofina hope by 06th June they should be in a position to update fully on the Atlantis Water Depot Project. With a high probability of being granted the permit, it would be rude not to have some binary money on the possibility for high risk exposure, although IOF's downside may deter some speculators! 

We'll leave Iofina to summarise their accounts, record revenue, record loss...hmmm

Atb Fraser

Pm Bolt-On: PLUS 500 the new CPP (Corrected).

Good Bank Holiday Evening,

It wise to consider PLUS 500 (PLUS) as the new CPP. Having had a few gins with a brand consultant (whom in no way is associated with PLUS). She's of the opinion PLUS 500 are the new CPP Group and a decline in revenues is likely to impact on the bottom line. 

CPP's updated the market regarding their discussions with FSA in March 2011 and a sensible investor can tell you the outcome. PLUS have not been implied as mis-selling although with the absence of a client suitability questionnaire, clients may think they have a claim. This of course depends on where the law stands on knowing your client or not. 

What is probable is an exodus of punters, with PLUS being alleged to have removed posts of discontent customers from Facebook. More so, it does not appear to be limited to UK customers. PLUS have their AGM on Wednesday, 27 May 2015 at Liberum Capital, Ropemaker Place, 25 Ropemaker Street, London, EC2Y 9LY. Could it be a lively affair!?!?

With thanks to a reader of this blog the terms will be changing, suffice to say the latest "market abuse campaign" may have ramifications for those expressing their views that trade significantly. Simply if it requires significant cost, the savvy few will simply stop airing their views. 

Atb Fraser

PM Bolt-On: PLUS, the "mighty backlog!"

Good Afternoon,

The end of the week, with every man and his dog joining in on the woes of PLUS. The problem is the limited stock available on the borrow, so expect volatility.

A few readers are still experiencing delays in the validation of documents and paperwork, from 3 days ago. The damage to PLUS's "disruptive" tech and footprint may be bigger than first realised.

Issues being reported on the dutch ForexFox.nl +

Have a good weekend!

Atb Fraser

Morning Mumble: Anglo Asian Mining AAZ, Oh eck (Gedabek) + PayPoint Plc.

Good Morning,

Anglo Asian Mining (AAZ) have waved the flag stating "financing is becoming limited for Gedabek." The CEO has stumped up a $4M loan, amazingly unsecured. So it either means one of two things, AAZ are likely to be in a position to repay the loan by the 8 January 2016 (the term) or there's a placing on the way. 

One would be wise to err on the side of caution! Those muppets giving abuse for shorting AAZ last year need a reality check,  EMC: AAZ 28 May 2014. It was noted in April (EMC) within AAZ's Q1 2015 Operations Update that the costs guidance was totally absent. Today's raises further woes, with net debt of US$52.4 million as of 31 December 2014, things are not looking pretty. 

With a quick breakdown of the figures available (as guidance is unavailable), all in costs are likely to be around $945/oz, although this has a significant margin for error, circa 10% this excludes debt/interest repayments. Has AAZ had another hiccup? Its rather looking like $10M is needed sooner rather than later, with the loan keeping the wolf from the door in the interim. One simply cannot factor in too much benefit for the reduction in energy costs (fuel) and heap leaching agents, without more information from AAZ. 

Some gossip on PayPoint Plc (PAY) doing the rounds.

More later pending commitments.

Atb Fraser

PM Bolt-On: Just Eat (JE.), is a 43+% abstention really a vote of confidence!?!? + Iron Ore (no) Investigation + the Chinese / Australian Volte-Face

Good Evening,

Something that was planned for tomorrow, but being time limited, it was to do it now or never. 

In just before the final bell today, Just Eat (JE.) complete the bookbuild at 425 pence, but the biggest issue being 43.67% of the stockholders have declined to take part. Namely JE.'s main three pre-IPO investors, The Sara Marron Discretionary Settlement, Index Ventures and Vitruvian Partners. So far all three have indicated they do not intend to take part in the placing or open offer. One certainly to watch, this vote of confidence is far from positive. 

The Australian Government walks away from an iron ore investigation that appears to have kicked up a storm (perhaps in a tea cup). Witch-hunt or common-sense? Australia may have just inadvertently kicked their currency in the proverbial. With wisdom, yet again closing out longs on GBP vs. AUD earlier than planned, as it approaches a key support level. In fact closing all GBP Vs, out on the basis of an unprecedented run which has little reason or substance.  

With Rio Tinto and BHP Billiton having their plans scuppered by the Chinese deal with Vale. It is a true and perfect bi-volte-face of deals. Not only taking the control away from Rio/BLT (read as also putting pressure on) but diversifying supply for China. Fortescue Metals (FMG) are likely to be under pressure as a result. More importantly China's about turn with Valemax suggests some very strategic deals are likely to be put in place, having previously been prohibited from ports.
Can Atlas Iron relist as a result? 

Atb Fraser

Apologies for grammar, a late one! 

Morning Mumble: The First Quantum (FQM) gloat (with humour), Bookers (BOK) Gem Diamonds, CAML's positives + The Start of where's Li from Hanergy.

Good Morning,

First Quantum (FQM) are passing the cap around for Cdn$1.25 billion (Circa £660M) to expand production whilst maintaining the same debt levels. We'll ignore the fact that FQM should have fund-raised when the Canadian Dollar was stronger, on the basis the share price has modestly improved albeit for no apparent reason. 

FQM, have been clever here, as they needed cash about 5 months ago based on the EMC view. This is contrary to one "Muppet" handsomely overpaid by a commodities firm. The EMC always loves a contrarian statement of "you simply do not know what you are talking about Fraser and should stick to those AIM tiddlers!" Well it would appear said muppet has not only been wrong about iron ore, copper, the impacts of Zambian taxation and Royalties, Lonmin and now FQM. All of course will be forgiven for a case or two of plonk and in good humour! 

FQM's Q1 results stated, the "Company remains compliant with all finance covenants under the Financing Agreements and expects to remain so in the future." What they FQM did not mention was thei the need for cash to fund expansion. The EMC's view is as always simple, investors including those muppet fund-managers and analysts, should have sold (EMC: Selling FQM). 

One of the best acquisitions by a company in a long-time, Bookers to acquire Londis and Budgens. Hat-tip to a certain savvy West-Country retailer broker whom in January spotted the crossover of Mike Baker being appointed as Budgens Brand Manager/Director. Will Mike Baker be overall Brand Director in the combined entity? With a lineage starting from Sainsbury’s, and some hard work, there aren't too many potential candidates. All the market needs now is Booker to acquire Iceland and the Big Food Group will be put back as a single entity, although Malcolm Walker might have a thing or two to say about that! 

Gem Diamonds (GEM) (See also: EMC: GEM Diamonds (February 15) seller of GEMD) give a sales and operational update. The update is now looking positive for GEMD, with prices near those of Q4 with a fractional improvement. The market has seen no further declines in pricing, with GEMD's average of US$ 2,146 per carat (first three tenders of 2015) compared to US$2,140 per carat in Q4 14. Ghaghoo is progressing well with recovery grades above resources averages (for now) and optimisation of recovery has improved recovery of all grades. 

GEMD has net cash of US$ 56.9 million at the date of this report, with financing in place, expect share price to gain some support on weakness with performance like to improve as a result of Ghaghoo. Over to GEMD to give the cautionary notes: 

Diamond Market - During the Period diamond traders continued the cautious approach they have adopted since Q3 2014. Increased liquidity constraints following the closure of the Antwerp Diamond Bank, together with tighter credit terms imposed by other diamond banks continued to put pressure on the rough diamond market. The Basel Watch and Jewellery Show which took place in March did not significantly improve sentiment in the polished market as traders wait for improved demand for polished diamonds. Notwithstanding this, prices achieved for Letšeng's high value, large rough diamond production remained resilient during the Period.

Overall it was rude not to have some on weakness, although small it may be the start of a positive headwind for the sector. Especially as some analysts have realised financial liquidity is important. 

Central Asian Mining (CAML) update on the Kounrad expansion, aiming for 13K/t's of copper for this year and 15K next, the share price movement is justified, perhaps as its got a little ahead of itself. 

Just Eat's tin is out for a modest £445 million, will give an indication of the confidence in this stock; wise to watch! With some humour, we are starting the "where is Li Hejun of Hanergy?" 

Of pertinence to Kenmare (KMR) is the update from Iluka Resources via their  AGM statement, "Needless to say, for the company to proceed to a binding offer, we need to have confidence around the financial merit and the value creation opportunity for our shareholders and our ability to manage Kenmare’s operation for the benefit of all stakeholders." 

Iluka are sounding more and more like they have KMR over a barrel. Maybe a revision in the offer? PRU? perhaps some wisdom this time? In Hindsight, the first offer from Iluka Resources was a prime example of why this companies company's SP is in the doldrums. Was it not near double the current indicated offer!?1 

Atb Fraser.

Morning Mumble: Zoopla (ZPLA) just a copy and paste! Gulf Keystone, is the market being unfair! Hanergy with perhaps some HangEnergy coverage later!

Good Morning, 

Zoopla ZPLA shall be simply covered with, "The Group has experienced UK Agency membership churn in the period due to increased competition, notably from the launch of Agents' Mutual and its restrictive 'only one-other portal' rule. However, churn levels have slowed significantly over the past few months and are returning towards normal historic levels. At the same time the Group has seen strong growth in membership numbers across its other channels including the growth in its newly established dedicated commercial property offering which had 182 members at 31 March 2015."

Are the shorts going to be honoured on Hanergy?!?!?! Surely those margined/leveraged Chinese traders have not "done" one. 

The member numbers are rather compelling, with the market laughably under-estimating the "transition" with OnTheMarket.com. The ARPA (Average Revenue per Advertiser) improves seem to buck the trend, of for how long as advertisers realise there's room for "adjustment." 

In contrast ZPLA "expect agency churn to return to normal historic levels over the coming months as we remain by far the best value digital marketing proposition available to property professionals in the UK." One assumes they're being forced to be more competitive and parties would be wise to consider the "best value" statement. Over to Rightmove (RMV), whom may have fared a little better, with a share buyback, means RMV is partially indemnified (at the moment.) RMV are purchasing circa 5% of the volume per day via the buyback authority for up to 15% of equity, some 11% further authority left (approx.)!

Apart from the obvious elements and basic trading on ASX for iron ore where the price dropped, so "the obvious candidates" made trading easy, save for Mount Gibson that seems to be in a world of its own! WSJ article pretty much covers it. 

Maybe more later, including Gulf Keystone (GKP), where the market reaction are perhaps being a little harsh! Time for some homework there, although before people get upset, its obviously got risks. Plus some Sound Oil, where the market appears have capped the price out pending more news! 

Atb Fraser

Morning Mumble: PLUS (Again), CEY's expectations in the future despite lower grades & more gold + Copper via TRQ +++Peppa Pig's owners...

Good Morning,

Yesterday's debacle has more repercussions than PLUS I think thought possible. One thing that "punters" should consider is the not so obvious "suitability questionnaire." As its common to kick a dog when it’s down, although things may not appear as bad as they first appear, there are questions that have been raised about Plus500's business model.

Having opened an account with PLUS with little more than a couple of clicks and trading was available. The notable difference was the lack of "proof of identity including the suitability" of product questionnaires. Somewhat of a large requirement and perhaps the main reason for the average revenue per user (ARPU) and no doubt the need for an increase in Average User Acquisition Cost (AUAC). Irrespective, thinking outside the box, if one has not completed a suitability questionnaire and has taken a loss, could this be misselling or similar? Perhaps even a fine. 

PLUS is something to watch as it unravels, both from a trading perspective but more so, if you held long, one assumes you a) trialled the product b) understood their procedures and c) were aware of the "Anti-Money Laundering (AML)" issues that were signalled on FTML and via Dan McCrum (if memory serves me correctly) last year. In addition to all the issues raised over the past 6-12 months. 

Two funds are clearly much better informed than us bears or they would not have been acquiring whilst the AML process was commenced a week ago, advertised on Facebook (yes no joke) and Twitter. 

Centamin (CEY), it would be wise for holders to catch up with the coverage today via a live webcast from 12:30pm 19th May 2015 for Capital Markets. The gist of it can be found, webcast slide presentation. With grades currently being below reserve average, one wonders how costs can be reduced! Perhaps CEY can enlighten us this afternoon. The sell is on mine life, but with limited cash returns at these levels its hard to get excited, unless of course another project starts to bear fruit. With limited exploration of the underground mining, its very hard to be confident with the 6g/t. If one was sceptical it looks more like a copy and paste job, 2016-19. See Page 26 onwards. 

We have another webcast in near 5 hours (3pm our time) from Turquoise Hill (TSX:TRQ & NYSE:TRQ) with an update on Oyu Tolgoi Underground Mine Development and Financing Plan. Up near 50% in 5 months it was wise to take all capital out on the rally. As the EMC covered in April, EMC: TRQ (Had investors paid attention to TRP as well they'd have saved around 90% of their monies!). 

As if by magic just a few days after their Q1 (& EMC: CMCL resource commentary), Caledonia Mining (CMCL) come out with a  resource upgrade, adding 491,000 tonnes from the Inferred to Indicated Resource categories and to add 47,000 tonnes of new inventory to Indicated Resource. With the price movement somewhat justified today, although please note its at depth its better than nothing! Obviously with Zimbabwean geo-political risks including the change from Chamber of Mines to the fidelity agreement. its not without its cons including grades. It wouldn't be a display of over-confidence for the small fry analysts to turn bullish (over the longer-term), although one eye needs to be kept on the Zimbabwean leadership! 

No time sadly for Entertainment One (ETO) full year Results, although disappointing film revenues that were rescued by Peppa and Co. Whether ETO can rescue the declines in film revenue is yet to be scene with four films in production, and some disappointment, the upside is there within family (read as kids) entertainment, where Peppa is "in America and soon to be in China."  Although its hard to find any justification for a share price above 360.

Atb Fraser

PM Bolt-On: Plus500 (PLUS)

Good Afternoon,

Like event risk, PLUS had limited upside in comparison to its peers, so today it was rude not to take advantage of the woes. PLUS not do not have the "plug and play" (not quite but you get the idea) to trading recruitment ease it previously had, save for a very basic offering, its now got limited advantages over its competitors. One has to wonder what issues the money laundering checks will have. Is this where people start to realise the difference between fully compliant and best practice. Many thanks for Twitter and Facebook (+ Plus) for advising on their own woes last week! 

PLUS came out with a statement, in full below!

Plus500 Ltd. 

("Plus500" or "the Company") 

Statement regarding recent speculation

Plus500, a leading online service provider for retail customers to trade CFDs internationally, notes the recent fall in its share price and the market speculation that it has not paid its recent dividend. Plus500 can confirm that it paid its final and special dividend of $65 million in full on Friday 15 May as previously notified to the market. Plus500 currently has in excess of $88 million in cash reserves (excluding that held in client segregated accounts).

In addition, shareholders should note that Plus500's UK subsidiary, Plus500UK Limited ("Plus500UK"), has in recent weeks been implementing certain enhanced client on boarding and Anti-Money Laundering (AML) processes which have resulted in additional documentation checks being required on existing and new Plus500UK customer accounts.

This has led to an increased volume of documentation being reviewed by our client onboarding team, and some Plus500UK customers are currently experiencing delays in receiving the necessary approval to open new accounts, and new trades on their existing accounts and / or withdraw monies. 

Only the Plus500UK regulated business is impacted, and the Company will continue to offer its services to new and existing customers through its other regulated subsidiaries in Cyprus and Australia.  Currently c.50% of Plus500's revenue is derived from Plus500UK, and c.45% of Plus500UK's customers have passed Plus500's electronic verification process and are therefore allowed to trade.

Those customers who are impacted are not able to open new positions until they are approved by the client on boarding team, however they are still able to freely close out open positions and to service these existing positions with additional Margin.   As usual, under AML regulations, existing customers (whether electronically verified or not) are unable to make withdrawals from their accounts until they have provided Plus500UK with fully compliant AML documents.    All Plus500 customer funds are held within segregated client accounts, held with major financial institutions, until further withdrawals are permitted.

Plus500UK has notified and is in close dialogue with the FCA in respect of these changes to its AML processes.

*Bold is addition not added by the company! 

Christmas cards to all at PLUS! Expect some volatility with the potential for ODEY and JPM to be in the market. Very unfortunate timing on purchases. 

Atb Fraser

Morning Mumble: LMI (Lonmin), PGM's via GFMS, Serabi Gold, Tribal Group + Otto and Capital Drilling!

Good Morning,

The share price of Lonmin (LMI) is rather telling that Glencore (GLEN) shareholders do/did not value or rate LMI. We shall keep this simple, in the absence of an improving outlook, reduced costs and CAPEX and OPEX clarity LMI is on a path of dilution (rights issue). With GLEN now ex-dividend as of yesterday, LMI is being punished, opps the correct term is "managed sales."

Perhaps the value of LMI for some funds will be ignored and held until an improvement or corporate action involving the Republic of South Africa (RSA) Government. The thought for the day goes to those analysts thinking the furnaces have "exceptional or one off costs", that shouldn't be factored into longer-term workings. One assumes they're new to the chrome issues within the PGM industry?!?!?!

LMI will not be assisted by GFMS annual survey is out on the poor man's Reuters Eikon that platinum has the potential to test $1K/oz. It’s not beyond the realms of possibility, with LMI needing to "dump" rather than manage the sale of near 200K with a growing differential between supply and demand. 

With the improvements and an expanding market in recycling  of catalysts, limited growth and even with a shortfall in supply PGM's failed to respond. One could be minded to think the speculators are locked in to Jo'burg ETF's at a loss so are unwilling to apply further capital, same for the Chinese and hedgies focusing on bottlenecking.  SO GFMS put the range to $1K/oz. to $1290/oz. 

Someone popped a BRR media discussion on Serabi Gold (SRB) into my box this morning on the back of the Unaudited Financial Results for the First Quarter 2015. SRB's suggestion there's the potential for M&A in the sector are of concern. SRB are another company that should focus on their current assets, get their start-up at Palito running efficiently and prove up their resources, rather than spinning a plate they can ill-afford to diversify on.

There is little margin on the balance sheet for M&A, save for the issue of confetti. Currently the Brazilian Real (BRL) is favouring their cost base in reporting terms, and with the downgrades in banks, the issues in the economy is unlikely to change. The USD/BRL of 1:3 should perhaps be considered the key support/potential floor. 

With the last placing just over a year ago, the FX losses kitchen sinked and ramp up progressing well, SRB is now looking more positive than the past 4 years. A producer (at a profit) and potential to return monies to shareholders over the longer-term, SRB should not be ignored. Likewise their liabilities, if there was a hiccup in their plans or a significant movement in BRL terms could hurt them. 

Tribal Group (TRB) gave an update into the AGM. With timelines going out further, one would be wise not to ascribe too much value in light of a second warning about the timing of and Keith Evan's departing, the warning signs were there! Having missed the previous year’s targets, the terminology is far from positive, but with a new 'man soon to be at the wheel' there's some hope. 

It was interesting to hear some excitement in the Oz about SC55 operated by Otto Energy. Tiddler watch, Red Emperor (RMP) Resources have a 15% working interest (WI) on a capped cost basis USD5.625m. If costs exceed RMP cap they have the right to reduce their WI!

RMP, a small cap with near £5M in cash (and most of it spoken for, if not all), there's no room for failure. As Ian put it a binary bet on the outcome of drilling in Q3. SC55 was originally farmed out to BHP, time will tell whether they were prudent to have walked away. Widows and orphans need not apply! 

For those with a memory of RMP, they used to be a shareholder in Highfield Resources (ASX: HFR) whom recently raised AU$101M. RMP sold all their stock at circa 80 cents a share (only 4 months or so ago). With little sign of the ASX: HFR ending its bull run at the time, RMP's timing was should be considered poor, or should it be worded as desperate for cash? 

Had Aureus Mining (AUE) been able to release a sensible RNS about their Q1 progress and Management Discussion and Analysis (MD&A), there would have been time to speed through it rather than the snakes and ladders approach to RNS’ing! You can read it here. Their IR best shape up, or investors (including small funds simply won't bother!), first pour expect end of the month! 

No time for the gold speculation in Asia/NYSE (also arbitrage), with investors hoovering up physical ETF's, nor WTI/ struggling to maintain it's $60/bbl support and the Brent GAP expanding again. The analyst who reads the papers two days ago after best have a whip round to speed up coverage.

Thought for the weekend, is the worst over for Capital Drilling (CAPD), compared to those leveraged operators! Good piece in LEX PGM Plunge with Alan Livsey and Richard Stovin-Bradford. Missing some very important indicators but all the same thought provoking. 

Atb Fraser

Morning Mumble: Some waffle, but maybe useful, Iron Ore Comedy or Tragedy the big dipper + Gold risk aversion retail therapy!

Good Morning,

Significant learning curves over lunch yesterday, many thanks DC (now armed with a reading list)! 

Time this morning has been spent working through trading costs and taxation! Over the next week or so things are changing, with a more balance level of CFDs and spread bets (not fully decided). Having spent time looking at the difference between DMA CFD and spread bet, there's no obvious conclusion. They both have their benefits. 

Using CFD for a small 22 ish trades a month its got its pros including arbitrage between two separate providers based on differing prices (E.g. IB/IG/City Index). Hugo has kindly been working on the difference in returns between CFD and Spreadbet. Having initially thought there was a loss of profits/greater losses as a result of the spread compared to the benefits of CFD DMA, it's actually contrary including return on capital invested! 

The returns from spread bet were near 8% higher than CFD for longer term positions, and 11% lower when trading on tighter/small (immediate) margins or moves on a stock/market. Some CFD positions would have cost more even allowing for 5-6bps on the spread. Limiting speculation / investing for decent gains rather than tighter/marginal fluctuations is the benefit of spread betting. In essence, whatever your trading platform, get on the blower and demand a better deal, or move (sometimes the latter is even better than the pros of staying)! Alternatively, if you have never made money at it, give up. It needs to be explored in-depth.

For the likes of the Leggie there's limited alternative but those with a short-term view rather than hell-freezing over, it might just be wise to consider other options. Then again, if you're a fund manager, perhaps there's just a need to get the position right? Well that would be a start for most, especially on AIM or in commodities.

The bigger dipper of iron ore is now smacking of a sense of desperation (Cheers AG & a sensible analyst TB). We are not saving whales, but our iron ore (Aussie perspective). With blame being thrown towards those appearing to be winning the war on production costs. Of course this has nothing to do with Andrew 'Twiggy' Forrest's belief that Australia's AAA rating is under threat, nor the reliance on revenues from commodity exports/mining. 

If the Australian nation haven't noticed the lopsided nature of their economy. There's the formation of a property bubble, stimulus (via interest rate cuts) and the raft of tax measures to stimulate the economy. It all might not be enough for Australia (as represented by depreciation of the Aussie Dollar). With the AUD range bound circa GBP1: AUD1.90-2.00 there's the possibility for a break out above £1:AU$2, pending Chinese risks of QE (see below). 

With near a full month since an adjustment in the tick size on the DCE (Dalian Commodity Exchange) for iron ore, coal and coking coal. The main beneficiaries appear to be the hedgies rather than the intended liquidity increase. Sector confidence has been misguided as a result of all commodities bouncing since recent lows (albeit for the wrong/right reasons (pending your view). 

With the markets acknowledging that China has 'yet again' fired the gun via the China Iron & Steel Association (CISA) comments about over capacity (Bloomberg: Iron ore over capacity) and steel production tailing off! Ironically the having an echo of March 2014's warnings (EMC: Chinese Iron Ore & the Glut of over capacity...price sunk to $114 (circa). 

Supply is limited for immediate delivery (justifying the modest premium) its certainly supported the price in Rio, BLT and Vale's favour + the higher cost producers ticking over with lower fuel costs and 'just surviving.' With peak demand for steel over, the market is grasping a reality, where speculation has warped the realities (in the short-term). See: Monthly crude steel production in the 65 countries included in the report, in thousands of tonnes & World Steel

With March figures of steel production down, the commodity price rises are looking unjustified and any bull would be well justified to consider the risks. With capital outflows, reduced mortgage and second home deposit requirements, lower steel production, deflationary pressure on factory gate prices, do China have any choice but outright QE? China are likely to have to considering outright bond purchases (or similar (remember its an amateur here).With China LG (Local Government) debt simply untenable and swelling as loans are recognised on paper via bond issuance, there is a need to deal with the issues especially light of their main revenues not recovering as expected. . 

Limited time to cover the abysmal Vedanta preliminary results. Some analysts might need to revisit "accountancy" for dummies, with impairments of a modest $6,744.2 billion. Somewhat different to the full year results 2015 all those days ago (15). Its wise to have a look at debt and equity levels, after the write-downs, net debt on the up and credit downgrades. VED might just need a knight in shining armour! (Chinese development bank?). Costs are dire and increased...the market reaction is pathetic! 

No time for the Sirius Minerals (SXX) planning officers tactics in what appears to avoid their duty/responsibility...Anglo Pacific (APF) interim management statement is 'half' decent but needs some more work. Amara Mining might be wise to consider the term robust in their PFS for Yaoure, the market reaction, AMA simply need to prove up the indicated resources and rework their models. The current returns on today's news/model are not as enticing, sensible, but not outstanding (need to listen to the conference call when its available, having missed it this morning. Gold supply contracted a fraction, investment purchases increased and risk aversion after US Data gave it a decent jump for some small profits.

Atb Fraser

Morning Mumble: Centamin (CEY), Caledonia Mining (CMCL) and...Asian High Yield Bonds (Chinese Property)

Good Morning,

Some tangents this morning and very limited time. With Centamin Egypt (CEY) unaudited results for the Q1 2015 are identical to Q1 2015 Preliminary Production Results. With a dire ROE (Return on Equity) of a smidge under 10% (annualised around 38%) which is dire! With the warped nature of CEY not paying tax, simply put there's a requirement for a write-down.

Today's results certainly do not justify the uptick in the price, without more news 'on other developments' and expansion, CEY is about the money. We'll ignore the number of shares in issue being wrong and distorting performance slightly, but even so a performance improvement. CEY at the current gold price and likely outlook, is likely to be range bound. 

Staying in gold, Caledonia Mining (CMCL) Q1 are about the mark, costs a fraction up, profits down but dividend maintained. A positive for CMCL is the management have concluded that its best way forward is to focus on 'what's working at the moment.' To quote CMCL, Caledonia has increased its strategic and operational focus on the Blanket Mine and intends to close and dispose of non-core operations in Zambia and South Africa and to reduce operating and administrative expenses. Shareholders should be thankful the management realise this, often there is a tendency to spin too many plates. 

With a focus on costs, CMCL 'appear' to know what they need to do, one hopes there's not a raft of options or salary/bonus awards as a result of their likely successes in saving monies! Pending the success of the expansion plans for the Blanket Mine, expect some rewards going forward in 6-9 months. Other than a gold price improvement do not expect the stock to appreciate too much (in trend/range). With the absence of an indicated resource statement as defined in the PEA December 2014, confidence should be limited until the resources are measured with confidence, rather than "inferred currently. 

Sabmiller (SAB) will find it hard to justify any form of independence with results that are below the management forecasts. As a result of flat sales (poor I known) and the strength in the dollar SAB's bottom line has been impacted. Any strength, save for speculation of M&A is yet another justification to sell the stock. Its ironic soft drinks are performing better, perhaps as the trend suggests, SAB will have to work harder to maintain beer sales. The best hope for SAB is a take-out, over to Anheuser-Busch InBev whom today had a good justification to limit any premium if it were "going to make a move at the end of the month." 

There's a growing trend on the price of the "Asian High Yield Bonds", certainly for Chinese Property developers isn't looking good. With the Asian equities on a bull run, those higher leveraged companies would be wise to take advantage and raise cash to reduce debt. It’s always of concern when the Chinese Government (via State owned media) promotes speculation on the markets. The Shanghai Stock Exchange Composite Index (SHCOMP), has ironically mirrored the growth in speculation (margined trading). 

With second-home down-payment percentages becoming "flexible" it’s envisaged that there will be an uptick in down-payments and completions figures for the next set of data. As a result of the imbalance of supply, it’s likely those speculating will be knife catching to a degree. Over to Kaisa to look to sort its debt woes out, its certainly at the price for their bonds, save for Sunac interventions. Zhang Zhiron's majority shareholder in Glorious Property is at risk of being reduced. Zhang should thank his lucky starts a privatisation motion he made previously was rejected! 

Limited time,

Atb Fraser

Morning Mumble: LMI shorts (via Glencore), Robertson's Jam or is it Marble, W Resources, Kefi and...SAT

Good Morning,

Glencore have put in place a managed sale for Lonmin (LMI) holders having less than 30K LMI shares post GLEN distribution. One cannot imagine how they are going to manage this, are there so many buyers for the stock they have willing gift aiders? Could there be a squeeze? Possibly but all the same the fundamentals have not radically changed to warrant going long. 

What is becoming a bit like a Robertson's Jam Company, with small time deals that really aren't going to give any decent returns to shareholders at the current level, Fox Marble raised £2M placing. It’s an indication that without decent sized orders (market place traction), FOX are unable to turn interest and orders into sensible levels of cash flow and as such shareholders get a return on their funds. EMC: FOX Marble coverage. The stock, despite consistent below par performance seems well supported, for now! Without decent news-flow, this placing could put a cap on the SP.

Kefi Minerals financing update yesterday shows they have not extended the deal with Goldfields (for now) and have raised cash from elsewhere. However, at this price, the wider development funding plan for Tulu Kapi gold might actually be worth a punt to the news. KEFI suggest the financing for the project remains on track for approximately $120 million of development expenditure to be required over an 18-month period commencing in Q4 2015. 

Today, we have the listing of Satellite Solutions Worldwide Group PLC (SAT), with them raising cash much needed cash. One finds it hard to justify any investment in this type of company, save for acquisition and expansion (consolidation of the fractured sector of small operators). 

The concept is positive for those limited with broadband infrastructure, and those whom are will have little choice. Perhaps SAT will diversify into Microwave Broadband with greater penetration, lower costs and better returns. At the current pricing levels costs could be prohibitive and a last resort for some. One to watch in how the management can delivery, it’s not going to be easy! 

In tiddler watch, W Resources (WRES) announce some decent grades intersections in CAA / Portalegre Drilling Campaign that may underpin the SP. The appreciation post the exit from the Bergen facility should have been an opportunity to assist holders in taking some cream of the table, with patience required for the cherry! 

An update for WRES on La Parrilla Mine + tailings would have been viable. It’s ironic some analysts of this tiddler perceive farming out CAA / Portalegre is 'only' an option. No option here, WRES have to do it, too many plates spinning doesn't bode well with limited/restricted cash (the risk).

Those shrewd EasyJet traders positions themselves 4+ weeks ago, have been rewarded today, with an admittance in the half yearly that the French Air Traffic Controllers strike has hit the bottom line. Hat tips all round! 

Atb Fraser

No time for the rig count obsession/increase and drop in oil! 

Morning Mumble: Lonmin, Aureus Mining (AUE) and Orogen Gold.

Good Morning,

Has the market lost its mind, Lonmin results are dire. 

We'll ignore the electricity issues (likely 13%+ appreciation over 4 years) as this makes up a modest 7% of production costs and focus on the costs. As LMI kindly outline, unit cost of production per PGM ounce rose from R13,058/oz. to R10,516/oz. Using LMI's average exchange rate, South African Rand (ZAR/R) to US Dollar, R/$ 11.48, costs were $916/oz, before associated costs. 

Average prices achieved on the key metal PGM basket (excluding by-product revenue) $916/Oz. (2014: $999/oz.) PGM basket (including by-product revenue) $988/oz (2014: $1,056/oz). Simply put, why are LMI bothering. If any expectant Glencore LMI holders are planning on retaining their stock, it would be interesting to hear why. Maybe they like gift-aid, keeping construction workers in employment with the forth bridge of furnaces? 

With the market pricing in Platinum at $1135/oz today, LMI believe their 200K ounces locked up due to Furnace One & Two being shut down for maintenance and repairs would have reduced their debt. Indeed it would, but there's a trend occurring, so any debt reduction is going to be short lived.

Production backlog will unwound in the second half. So will global prices by the looks of things if they haven't appreciated with 200K ounces being "locked in." The question is will the sales be at a profit, loss or break-even, there's two probabilities and it certainly isn't a profit. 

It would be wise not to get too excited by the 70+% increases in production as the comparative period had a strike on! So LMI would perhaps be wise to consider their inventories 200K ounces higher and drip into market, over 24 months.

For those long-standing readers of EMC, you'll note the positives of Aureus Mining (AUE), with the company declaring Liberia is Ebola free, well for 42 days so far. They update its Bea Mountain Mining Licence has been enlarged to include the Leopard Rock gold target. With first production due in 3 weeks (or perhaps sooner, the share price should respond. (EMC: Aureus Mining).

Highfield Resources (ASX: HFR) come out with a 10% discounted placing for $101M below the targeted amount but enough to raise the debt for their Muga Potash Mine, expect news of a $166M debt facility in due course. 

A rare earth miner may just have a significant haircut...no time either for Orogen Gold (ORE), had those punters listened...EMC: ORE and the no news award goes to AFC Energy AFC Energy.

Atb Fraser

Morning Mumble: What a week, a quick recap!

Good Morning,

What a week, with most pre-election polls being a joke. Having thought that the UK would have ended up with a Labour SNP coalition, the UK should be pleased. A slim majority means that nothing too drastic is likely to happen (yet) but more so, Labour's financial record isn't put to the test again. Expect European issues to be a proverbial echo of will they won't they. 

There is a plus to this election, Ed Balls is out of politics (for now), whether you agree or not, its certainly my Christmas and I suspect one Sharon Shoesmith will be pleased with. So as a thank you for all Ed did whilst in Government and in opposition, Good Bye! (BBC).

Despite the dollar being in good form, the hedge funds and Chinese are betting on their own recovery, for most it'll be a positive. For Weatherly International (WTI), the price has to travel significantly before they're in the money. WTI's trading update is dire, and if they cannot get costs under control this placing will look expensive with cash costs per tonne of $7,763. For old money that's around $3.50/lb ish.

The bet is whether WTI can ramp up and reduce their costs, with guidance slipping back. The market may have some relief after their shining knight (Orion Mine Finance) didn't have them over a barrel and instead anted up (USD) $5.2 million at 2 pence. Why the cost overrun facility wasn't used is another question, perhaps an indicator of things to come! 

Laden with debt and debt payments due from November, what's the odds more cash is needed. WTI should now praying for a large bull run to near $3.75/lb or their costs reducing 20%, both are a challenge, with constrained production its not looking pretty. CEO out, COO in, over to Orion to dictate the show. 

On the 21st May those Glencore (GLEN) holders can look forward to receiving their Lonmin (LMI) stock (AGM approval). With a slight recovery in the price, as the shorts closed, it’s not looking pretty for LMI. With their discussions to reduce costs, it’s all too little too late. Simply put, LMI's figures don't stack up and after the last debacle where muppets gift-aided $817m (09 November 2012). Time now to pass the cap around again, or conduct some drastic cuts. If the latter doesn’t work, at least they’ve got a few more willing muppets in the form of post-Glencore holders. The time is now for more cash psychologically, a fully under-written gift-aider at 85 pence should entice most.

The cuts are 'perhaps' too little too late, those firms that bought into the rights issue had a choice, good money after bad? Will there be a recovery? No doubt, but simply put, the money may just be safer under the mattress! More so, if these cuts can be imposed/implemented without an impact on production then why wasn't it conducted earlier! LMI is one for the list of management to beware of when investing, if their names pop up elsewhere. LMI should be managed as a social enterprise by the Republic of South Africa. As such, they may be able to entice the IMF to waste some monies as well, perhaps even the Chinese version?

On a brighter note, Sirius Minerals (SXX) informed us the special committee date has been set for the 30th June (Put it in your diary now). Still in sector, Highfield Resources has its cap out for $106M to build move forward their Spanish licenses. Muga being central to the licenses in Spain is key, and initial indications are there's been a positive uptake in raising the cash, albeit that has the caveat of "at what price." One ASX trader suggests its a mere 5% discount to close...

Randgold Resources (RRS), Q1 Results were out, it’s very hard to justify the valuation, save for being protectionary on the basis of if one must invest in gold, then perhaps bigger is better?!?! RRS note the supply of gold is slowing (only marginally currently), which may actually assist the price and save some of the higher cost Co's that are just about surviving. 

RRS is a traders dream currently, although as it continues so do the risks of a break out, but not yet. RRS remain silent on acquisitions. A well-placed geologist bumped into some RRS personnel in another African nation...one wonders what they could have been doing there, perhaps their Satellite Navigation went wonky coming from Mali to Côte d’Ivoire?!

Atb Fraser

Morning Mumble: Obviously the Election (or perhaps shambles) &...Blightie to Bling!

Good Morning,

The political message is simple, vote for financial prudence, it has and will reward all including future generations. There is one major political party that has at every turn destroyed any financial strengths this county has had, over to labour to cite the social benefits of a huge overdraft! 

Forget all the waffle and look how you balance your own household, the very basics of politics are at stake, and you will take the blame for placing incompetence in charge. So if you don't want to vote, do it, it’s your obligations. This is not because of the wars or suffragettes, but simply it’s important you get off your backside and get down there to make sure the majority views are heard; rather than the agendas.

The implications and closeness of this election has ramifications across the market,, whether public spending, Staffline's bet on A4E and the hope of a labour victory, G4S, Serco, Babcock (although it would be wise to consider the trends occurring in BAB), oh you get the idea...so for myself, due to the uncertainty (and potential idiocy) of voters its wise to a greater level of cash and avoid the risks most of the election risks on the market. 

The oil traders are making hay under the noses of common-sense, with the run to $70/bbl (currently $67.14/bbl Brent & $60.81/bbl WTI) in light of the shale numbers retrenching with production slowing, although modestly at the moment. So in the absence of any conviction to $70/bbl yours truly took the cash now, with greater downside risk, its wiser to wait for better indicators than currently presenting. Albeit a saviour for those higher cost producers, whom are as we drink breakfast tea, utilising this run to shore up their balance sheets or entice speculators for another 100 Billion barrels of...under Gatwick. 

Morrisons (MRW), had a worse reaction to sector trends than envisaged, causing a rush for the door as the price overshot the sellside's expectations on opening! Sadly there was not enough conviction here to go into the results short. The interim management statement is more or less guff, with a focus on improving service, the consumers best decide what they want, a) service and price or b) just price. It's likely to be the former as evidenced by the growth of independent stores, but will take significant time. Morrison's in essence is a primary candidate for PE with a decent rebranding, can they do it?

The bankers must be laughing all the way back to the office, with Petra Diamonds (PDL) $300M Notes at 8.25%. This is another example of the contradictions in the market place, Fortescue Metals Group's recent refinancing of $2.3B at 9.75%pa. PDL would have a better chance of improving shareholder funds by offering to finance diamonds, than the current level attained in operations. Holders can of course hold their bated breath for the recovery of large diamonds that aren't 'smashed' by the current crusher. Better still, with South African woes, it would have perhaps been wise to raise in USD/RUB and ZAR.

The EMC noted Highfield Resources (ASX: HFR) a couple of weeks ago (EMC HFR) and overnight they requested a trading halt. The excitement was short lived when it was realised they want to raise a significant amount of cash! Will ICL become a significant shareholder, or more interestingly, CCCC? Not long to wait! With HFR now having rights to the entire basin, there's unlikely to be any type of ransom situation, with the licenses/land in between Vipasca and Sierra del Perdon projects now being under their control. 

The Paragon Diamonds (PRG) announcement to acquire Mothae Kimberlite Diamond Project in Lesotho from Lucara did not go unnoticed. Lesotho Government have been welcoming of investment (to a degree) but one would factor in certain risks. PRG state the Lesotho Government are in favour of this deal. Perhaps the revenue is a bigger enticement than their previously held remit of one operator one mine ethos in Lesotho. A first for PRG to EMC's knowledge and a few savvy analysts, congrats PRG. 

Even allowing for the royalty arrangement in respect of 5% profit interest, the deal is on the cheap side, Lucara believe their capital is deployed better elsewhere. With Dubai stepping into the void left by the Antwerp Diamond Bank (ADB) they have via International Triangle General Trading (ITGT) also increased the debt facility for PRG. Not without risks, but capitalised at £16m ish, its gotta still be worth a punt and holding!

The Kleenex award goes to a few trades whom have been historically short on African Copper (ACU) this dire model of a listed company is to delist. What will those traders do to pay for Christmas now, save for them being shafted on the spread to close. 

Today's amusement came with the trading update on SCS, having bought into the newly listed company for some quick sentiment profits based on the DFS market valuation, we have the 'trading' update. Apparently it's general election uncertainty and warmer weather that impacted on trading. The latter may be so, but really, the general election? SCS also benefited from a significant amount of advertising pre-IPO, which will have enticed the customers in, with the trend cyclical it was only a matter of time. Over to DFS to confirm they're suffering the same woes (EMC: DFS), what with that general election uncertainty! 

For the FTML readers, you'll be enjoying the carnage at Optimal Payments (OPAY), the Skrill purchase looked overpriced, notwithstanding the fact holders are hedging with significant shorts themselves! The market is appropriately rebalancing post the rights issue from memory at 166 pence. Magnetar will hopefully offset some of their losses at TeleCity (TCY)! 

Atb Fraser