Eight AIM commodity players update investors

Commodity companies set the tone on Wednesday as announcements came thick and fast from the likes of Beacon Hill and Kefi Minerals. Read our round-up of news from eight key players.

Beacon Hill Resources

Beacon Hill Resources (BHR) has published the definitive feasibility study on its Minas Moatize . It said the information confirms that the coal project in Mozambique is economically robust.

Independent consultant TWP Australia based its financial modelling on a 4 million tonne a year run of mine operation producing 2.2 million tonnes of saleable coking and thermal coal. This generated a net present value of $662 million and an internal rate of return of 79.5%.

Beacon Hill chairman Justin Lewis said that the project will support a technically and economically robust coal mine with a mine life of 11.5 years.

"The economics of the project are not only highly positive, but are also subject to improvement across a range of areas and with a net present value of $662 million, a marketable reserve of 23.45Mt of coal, of which over one third is coking coal, near term coking coal production and a proven end to end export solution, the commercial value of the Minas Moatize project is clearly apparent."

Jubilant Energy

Jubilant Energy (JUB) announced that it has spudded the Kathalchari-NE appraisal well in the southern part of the Tripura block.

The well is the second drilled to appraise the Kathachari-1 (K-1) discovery and is located four kilometres north-northeast and up-dip from K-1 and 2.6 kilometres north-west and down dip of the first appraisal well Srikantabari-1. The KL-NE will be a vertical well drilled to a total depth of 2,990 metres measured depth.

The company said it will test the Middle Bhuban equivalent sands encountered in the K-1 well, one zone of which had flowed at a rate of 5.2 mmscfd. These equivalent sands are expected to be encountered approximately 600 metres up-dip of the K-1 sands.

The well is the fifth well to be drilled on the block in which Jubilant holds a 20% participating interest and acts as operator. GAIL India Limited holds the remaining stake.

Madagascar Oil

Madagascar Oil (MOIL) had a boost as it revealed it has placed 59 million shares at 28p each, to raise $26.5 million.

The placing price represents a discount of 3.45% to the closing middle market price of 29p on 21 February, the last trading day prior to the announcement of the placing.

The shares placed included Touradji Capital's entire shareholding of 24.95 million shares. The funds from the placing will largely go towards the development of the firm's Tsimiroro asset in the Morondava Basin of Madagascar.

Kefi Minerals

Saudi Arabia-focused Kefi Minerals (KEFI) has completed a placing and raised £1,850,000, before expenses.

The company said the placing of 61,666,667 ordinary shares at 3p apiece was significantly over-subscribed.

Funds raised will be used to progress the next stages of the current exploration programme including 18 exploration licence applications which have been lodged and three which have been granted.  All are at various stages regulatory processing and a number are expected to be granted this year.

Kefi said the licences are targeting both gold and copper-gold mineralisation and are all in areas which contain ancient workings, some have visible gold in quartz veins. Two are within 50kms of two operating gold mines.

Rambler Metals and Mining

Rambler Metals and Mining (RMM) said gold production in the second quarter of them miner's financial year was 4,022 ounces at its wholly-owned Ming gold and copper mine in Newfoundland.

The average daily gold throughput for January was 600 metric tons per day (mtpd) with the highest one day throughput being 695 mtpd. This production rate confirms the projected tonnage rate determined by the company's feasibility study.

Independent Resources

Italian-focused gas company Independent Resources (IRG) said that both the Ministry of Environment and Ministry of Cultural Assets and Activities have executed by decree the environmental compatibility authorisation for the next phase of the company's Rivara underground gas storage project in Northern Italy.

The company said it “hopes that Italy's Ministry of Economic Development can now work cooperatively alongside the Region of Emilia-Romagna to reach the required agreements for a mineral title that would then allow the company to drill its planned appraisal wells.

Shares in the company moved higher on the news.

Strategic Minerals

Strategic Mineral (SML)s said its shares are being traded as American Deposite Receipts (ADRs) on the over the counter (OTC) market in the US from 21 February.

The magnetite focused iron ore producer and exploration company confirmed that each ADR represents 100 ordinary shares and no more than 25% of the company's issued ordinary share capital can be represented by ADRs at any given time.

The ticker symbol of the ADRs is SMCDY and the CUSIP is 86277J103.

ADRs allow US investors to buy shares in foreign companies without the need for cross-border or cross-currency transactions. They are priced and pay any dividends in dollars and can be traded like the shares of US-based companies.

Strategic Minerals retains its primary listing on AIM.

Stellar Diamonds

Stellar Diamonds (STEL) had positive news on the results of the phase-1 bulk sampling programme at its Droujba kimberlite pipe in Guinea.

"The first two bulk sample results are very encouraging, with an initial grade of 60cpht being realised from initial processing, which is consistent with the expectation of high grade,” noted chief executive Karl Smithson.

"Additionally, the recovery of a number of large stones, including a 13.8 carat and a 6.06 carat stone, from a relatively small parcel of 268 carats of diamonds, suggests a coarse size distribution to the diamond population.”

He added: "Sample processing is progressing well and we expect to have the full results available during March. We remain on track for delivery of the maiden resource statement for the Droujba pipe by the end of March and I look forward to updating shareholders as we progress."

For an understanding of what to look for when considering exposure to the sector, read: Analysing... Miners.