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

Morming Mumble: APF's Largo Resources Royalty + ANTO's $25M Whoopsie (small change), Serco Group (D'err), Glen-shrewd, Soco (SIA), DOR, and GKPence + ASOS savvy traders!

Good Morning,

Anglo Pacific (APF) completed on the Narrabri Royalty Acquisition yesterday without updating its shareholders on the Largo Resources (TSX: LGO) refinancing. Just so those TSX: LGO holders are aware of the risks, there is a 20% coupon  bearing down on them via the Canadian $12-Million Convertible Bridge Loan. One hopes there's light at the end of the tunnel and not a train!

EMC was near as damn it on the money with the $CDN12M raised so far and a proposal to raise a further $CDN40M; with the likelihood of a little more cash being put up. Had APF waited and conducted a sensible deal, they would have got more bang for their buck, although historically speaking, it's hard to say when they have timed any purchases well, see share price. 

Antofagasta (ANTO) have resolved the Los Pelambres issue with their cheque book and proposals for desalination for any expansion at Pelambres, plus funding a few items. Rather contradicts ANTO's statements in their first protest announcement about "a small group who do not necessarily represent the valley community." ANTO's statement caused a 'ramping up' not in production, but of protesting, costing ANTO circa 3K tonnes more of lost copper production, circa $25M worth. Whoops!

ANTO didn't think through their statements treating natives that way, especially those with some degree of education and an internet connection! ANTO would be wise to appoint a local representative/diplomat to Les Pelambres to listen to concerns and establish a social fund to assist those directly affected. The desalination plant (the future of most mining ops in Chile) for expansion impacts on costs, with some estimates being near 50 cents a pound on production. One hasn't worked through this yet, but it gives an indication of the struggles. 

We need a fanfare, it appears that Glencore has conducted a decent deal with Russneft (FT), not to be confused with Rosneft, whom they have a crude supply contract (circa 2013) and a prepayment facility of $10B circa 2014. 

What next for GLEN? GLENseft? Contary to the article Russneft only produce 13.9m tons of crude oil or for the old school, multiply that by around 7.1475121 to equate to barrels (pending gravity at 99.35041819M/bbl per annum). 

The deal is very good for GLEN, even allowing for the $900M exchange of debt and current outlook. The benefit being it gives Russneft some breathing space and allows change to be conducted purposefully. One wonders who next for 'West Africa.'

Having been in dialogue with ex-employee of a gold company, I am flabbergasted to learn what lengths companies will go to manipulate assay results and production when they are looking for finance. If the statements eventually prove correct, I'll endeavour to publish in full. No underwriting required, but for those knee-tremblers, do not worry this company has already gone to the wall, the creditors might not be so pleased however.

For those novice shorters out there, where every many and his dog should have been short on Serco Group (SRP), 10 November 2014 since the update on strategy, capital structure and trading at least until January 2015 and certainly into these results for a double up. SRP have managed to get a fully-underwritten rights issue away. At one stage holding SRP shares were long for the recovery and this proved misguided, with further warnings, shorting was the only answer.  

A few more hit the Christmas card list, Soco International (SIA) preliminary results reading a a candidate for contradiction to their update in January. Having risen 20%+ on the back of their last trading update in January, there was little upside to the stock. TGT drilling programme will be scaled back and the flow rates at TGT/H5 being conservative, all has aided to kick the SP. Don't we have Enquest reporting soon? 

With absolutely NO SURPRISE, we have Doriemus Plc (DOR) have conducted a placing. A member of the Horse Hill contingent, but more importantly, one would be wise to read the RNS properly. Over to DOR to explain I've underlined the irony of the part of the statement:

This funding will be used to strengthen the Company's balance sheet and used towards further farm-ins and other potential investments within the UK conventional oil and gas sector, and in accordance with the Company's stated investment strategy."

Donald Strang, the Company's Chairman, commented:

"This new funding will be put towards general working capital, expected 2015 contributions for on-going work on the Horse Hill discovery and for assessing further acquisitions in the UK and European oil and gas sector.

For the candidates in denial of the risks with Gulf Keystone (GKP). They have called a meeting of bondholders, to remove the "Book Equity Ratio ("BER") Put Option of 0.4 in order to strengthen the Company's ability to negotiate with the interested parties regarding the Corporate Actions." 

Now if you were a bondholder...save for something promised in return, what would you do? Would you really buy the stock now or the bonds? The latter certainly has more security over it, perhaps those followers would be wise to follow the trades in the bond rather than the stock from now? Sounds like the low ball, was indeed, very low-ball!

One hopes decorum and limited profanity from a certain party will be kept after selling the last block!:-). Hat tip to the trades pilling into ASOS on the back of BOOHOO yesterday, sadly one can't be everywhere all of the time! 

ITV acquired  Talpa Media (Big Brother creators), that is good for both parties. Were ITV playing poker with Entertainment One (ETO) or looking to acquire both. If the reports/gossips of a deal with Entertainment One were correct, then its unlikely (without more debt) that they could fund any such deal in the near future, one of ETO's size anyway, over to a US Big boy! 

Atb Fraser

Any web-designers with spare time please contact! Having now been let down by three parties, despite paying, I'm after a freebie!