Tuesday 12 May 2015

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! 

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