Rockfire Resources’ impressive few weeks

Ishen Patel
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Rockfire Resources’ impressive few weeks

Rockfire Resources (LON:ROCK) have said that it has started drilling to expand gold mineralization at its BPL025 hole in Australia.

Shares have surged this morning by 37.88% to 1p. 20/1/20 11:10BST.

The firm said that reverse circulation drilling is now being undertaken and will be completed within a 15 day period.

Geophysical anomaly will be tested by drilling two holes of 50 meters and 150 meters respectively, east of hole BPL025, with gold analyses to follow the completion of drilling.

The drilling program will aim to extend the near-surface gold resources at Plateau in north Queensland, the company noted.

David Price, Chief Executive Officer of Rockfire, commented:

“This current drill program is a very exciting one, as we are testing at depth to the east of hole BPL025, which was a very successful hole. Success with this follow-up drilling will demonstrate significant extension of this deep gold mineralisation in an east-west orientation.”

“A second aim of the current program is to expand and build greater confidence in the gold mineralisation at our near-surface JORC resource, in an effort to define an open cut resource, 80m from surface.”

“We are fortunate to get underway with drilling at this time of the year, as the usual wet season in northern Australia has not yet arrived and we intend to make the most of this window of good weather. Geological mapping, rock sampling and XRF analysis of drill samples from October 2019 drilling is in progress and the Company expects results from this analysis within the next few weeks. We will keep the market informed of our progress.”

November – where Rockfire picked up

In November, the firm reported that it had seen consistent gold assays from an operation in Australia.

The firm updated shareholders that it had returned broad consistent gold assays from a geophysical target on its Plateau gold project.

Of particular note was gold mineralisation occurring almost continuously throughout a 215 metre deep hole, including 177 metres at 0.5 grams per tonne gold.

Rockfire believes that this hole has intersected the upper levels of a large mineralised system.

“Hole BPL025 was designed to drill down a sub-vertical pipe structure into the centre of a geophysical chargeable anomaly,” David Price, chief executive of Rockfire in a statement.

“This is the first indication that Plateau has grade continuity extending at depth and supports our belief that this deposit is much larger than previously demonstrated. With consistent gold, silver and zinc being encountered close to surface, we always believed that a large mineralised system was somewhere deeper down. This hole has demonstrated that mineralisation can be followed over long intervals,” he added.

Lighting strikes twice within two weeks

At the start of December, Rockfire said that the drilling of a new Breccia zone at the Plateau Gold deposit in Queensland, Australia has discovered high-grade, near-surface gold.

The company said the central Breccia was identified from mapping and sampling by Rockfire geologists. The company believes this new mineralised zone forms part of the near-surface expression of the large gold system encountered by the BPL025 drill hole.

The newly identified zone includes an intercept of 1 meter at 21.7 grams per tonne gold, which is the highest gold grade encountered in drilling at plateau, the company said.

David Price, chief executive officer, said: “We are starting to get a better understanding of the geology of this zone and the more we learn from each drill hole, the higher our drilling success rate becomes.”

“These holes are interpreted to represent the near-surface expression of the large gold system encountered at depth in hole BPL025. Importantly, these holes extend the mineralised target zone by another 120m towards the east. It is our expectation that the geophysics recently completed at Plateau may highlight potential for a “sweet spot” with higher average grades at depth,” Price said.

Rockfire hit gold for a third time

Just one week later, the firm said that induced polarisation geophysical survey has identified multiple anomalies at the miner’s 100%-owned Plateau gold deposit in Queensland, Australia.

Rockfire said large geophysical anomaly has been detected around and beneath BPL025 target, which intersected 177 metres at 0.5 grams per ton of gold.

The anomaly is a reported 350m wide and over 200m long, has proven to host gold mineralization near surface and provides multiple strong targets for gold exploration at depth, Rockfire explained.

Rockfire said it continues to await results from the remaining 11 drill holes from October Plateau drilling campaign and intends to extend the geophysical survey towards the east to track the gold anomaly further.

Shareholders of Rockfire will be thoroughly impressed with the update and generally the last few weeks of trading.

If the fine form continues, the shareholders can be excited for Rockfire to see what 2020 brings.

BAE Systems announce two American acquisitions

Ishen Patel
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BAE Systems announce two American acquisitions

BAE Systems PLC (LON:BA) have announced to shareholders that they have acquired two American businesses on Monday.

The firm said that they have purchased the military global positioning system from United Technologies Corp (NYSE:UTX) unit and Raytheon Co’s (NYSE:RTN) Airborne Tactical Radios business.

BAE also announced that they would be buying US based Raytheon’s Airborne Tactical Radios business for $275 million in a cash only deal.

The deals are still subject to clearance, however BAE shareholders have seen their shares in green.

Charles Woodburn, Chief Executive of BAE Systems said:

“These proposed acquisitions present a unique opportunity to add high quality, technology focused businesses to our Electronics Systems sector. It’s rare that two businesses of this quality, with such strong growth prospects and close fit to our portfolio, become available. The strategic and financial rationale is strong and these proposed acquisitions, which are focused on areas of highest priority defence spending, will further enhance the Group’s opportunity for continued growth in Electronic Systems. We look forward to welcoming the employees of the two businesses to the Company, as we work together to help drive our business forward successfully.”

BAE move following other merger deals in the industry

In November, the UK Government gave the green light for the planned purchase of Cobham (LON:COB) by US private equity group Advent.

The deal is set to cost Advent $5 billion, and the deal won clearance after the group offered a number of commitments to address national security concerns.

The deal was put on hold after British business minister Andrea Leadsom spoke to government departments about the risk of the deal.

“We have worked closely with the Ministry of Defence to construct undertakings that would adequately mitigate against any potential national security risks,” Shonnel Malani, partner at Advent, said.

Advent will also have to give prior notice to the Ministry of Defense, if arrangements are made to sell Cobham’s business are made whilst government contracts are still to be fulfilled.

“No decision will be taken on whether to accept the undertakings until the consultation has closed and the representations have been carefully considered,” Leadsom said in a statement.

Following the movements in the market, BAE have made an impressive start to 2020. With these two acquisitions, this is a great opportunity to develop and expand operations whilst using US knowledge and expertise.

Shares in BAE Systems trade at 641p (+2.66%). 20/1/20 11:00BST.

Update: Anglo American Sirius Minerals deal gets the green light

Ishen Patel
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Update: Anglo American Sirius Minerals deal gets the green light

Anglo American PLC (LON:AAL) have announced that the proposed merger deal with Sirius Minerals (LON:SXX) has been completed.

Anglo said that they will offer 5.5p per shares for Sirius, which shows a 34% rise to the closing price of Sirius on Friday which was 4.1p.

Sirius Minerals itself said its directors consider the acquisition to be “fair and reasonable”, and have recommended that shareholders vote in approval of the offer.

The offer is conditional on whether 75% of Sirius shareholders decide to vote in favor for the merger deal, which will be done at an upcoming court meeting.

Anglo American have remained confident about the acquisition and have said that they expect this to be formally completed by the end of March.

The share price offer values Sirius at £404.9 million, and is a deal which Anglo American will be thoroughly excited with.

Commenting on the Acquisition, Mark Cutifani, Chief Executive of Anglo American, said:

“Anglo American’s recommended offer provides greater certainty for Sirius’ Shareholders, employees and wider stakeholders, while bringing the prospects for the development of this potential Tier 1 Project closer to reality. We intend to bring Anglo American’s financial, technical and product marketing resources and capabilities to the development of the Project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area.

“The addition of the Project supports our ongoing transition towards supplying those essential metals and minerals that will meet the world’s evolving needs – in terms of the undoubted need for cleaner energy and transport, and providing infrastructure and food for the world’s fast-growing and urbanising population. Our development of the Project in the years ahead reinforces the quality of our portfolio and our long-term growth profile, further enhancing our ability to deliver leading returns on a sustainable basis and enduring value for all stakeholders.”

Sirius find need to merge with Anglo American

Commenting on the Acquisition, Russell Scrimshaw, Chairman of Sirius, said:

“Four months ago, following the setbacks in the bond market, we took the difficult decision to slow the pace of development of our project and initiate a strategic review to reassess how best to unlock the long term value for our Shareholders, the community, the UK, and our customers all around the world.

“The scope of the strategic review was to consider and incorporate optimisations to the Project development plan and to explore alternative funding solutions, including looking for a strategic partner to acquire a minority interest in the Project to provide those funds and support the senior debt financing required to complete the Project.

“We were successful in reducing the initial funding needs of our Project to map out a way to develop the Project in a way that better aligned risk to capital providers but, despite an extensive global search for a strategic investor, we have to date not received a firm proposal for a partial Project stake. The only viable proposal was received from Anglo American in early January, who were only interested in pursuing a 100% control transaction.

“Alternative financing solutions have also been pursued in parallel to the strategic partner process, which resulted initially in a non-binding proposal being received in December 2019 and subsequently a revised proposal being received on 9 January 2020. However, in the opinion of the Sirius Board and its advisers, the terms of the proposal received and the conditions attached are not acceptable in their current form. It is highly unlikely that acceptable revisions to this financing proposal can be delivered and implemented by the end of March 2020.

“We acknowledge that to many Shareholders our decision as a board to recommend this offer will have come as a shock. Your board deeply regrets that we could not deliver the complete stage two financing in 2019 despite a very broad and thorough process. Going into the strategic review the Sirius Board’s strong preference was a solution that allowed current Shareholders to participate as fully as possible in the future development of the Project. Following the strategic review process it is clear that no such options are currently available to us and in that context Anglo American’s offer is the only feasible option.

“We also recognise the returns that this offer would represent are not what either our shareholders or the Sirius Board had previously hoped for. We regret that we are not able to deliver on our long-term goal of Sirius being able to deliver the Project into production, although we assure all stakeholders that the team has worked tirelessly and diligently over the last nine years to try and achieve that. However, given the current cash constraints of Sirius, and lack of realistic and deliverable alternative financing and development options, we believe this to be a fair approach from Anglo American, a company committed to approaching the Project in the right way, and with the resources to complete the job.

“We now face a stark choice. If the Acquisition is not approved by Shareholders and does not complete there is a high probability that the business could be placed into administration or liquidation within weeks thereafter. This outcome would most likely result in Shareholders losing all of their investment, as well as put the future of the entire Project, and its associated benefits for the local area and the UK, at risk.

“This is the context in which your board must assess the offer for your company and, having given due consideration, your board believes the Acquisition to be in the best interests of Sirius and all of its stakeholders, providing Shareholders with some financial return.”

UK Household Finance Index up in January

Dina Caruso
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UK Household Finance Index up in January
The UK Household Finance Index rose to a 12-month high on Monday, new data revealed. Indeed, the IHS Markit UK Household Finance Index rose to 44.6 in January, up from 43.2 recorded in December and the highest it’s been in 12 months. The survey measures households’ views on financial wellbeing. The figure is “indicative of an easing of pressure on UK household finances,” the report said. The new year has begun with some form of political stability, following the chaotic nature of the UK’s political landscape last year. Indeed, 2019 saw several extensions to the Brexit deadline, an attempt to prorogue parliament and a general election, with political and economic uncertainty hitting various sectors. The UK retail sector was one of the many to be hit by uncertainty. Data revealed in January that UK retail experienced its worst year in 2019. “Latest survey data certainly show some post-election bounce for UK households, with the headline index up to a one-year high and house price expectations at their strongest since October 2018,” Joe Hayes, Economist at IHS Markit, which compiles the survey, provided a comment. “That said, cooling inflation was most likely the real driving force, propping up real earnings and disposable incomes,” Joe Hayes continued. “A rising proportion of UK households showed that they are in tune with the downbeat message from several monetary policymakers in the last couple of weeks, with almost one-in-four now expecting the Bank of England to cut interest rates as their next move.” Joe Hayes said: “It therefore seems the case that, while falling living cost pressures are stimulating purchasing power, UK households are aware that weak economic conditions have led to an increased likelihood of lower interest rates. How this will impact consumer spending behaviour will be crucial to the UK’s growth prospects.”

Coca-Cola set to transition to a circular economy and invest heavily into France

Ishen Patel
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0
Coca-Cola set to transition to a circular economy and invest heavily into France

Coca-Cola HBC AG (LON:CCH) have announced that they will be heavily investing into France to support sustainable development.

The firm said that alongside Coca-Cola European Partners PLC (LON:CCEP) they will invest as much as €1 billion over the next five years.

At the Choose France Summit, Coca-Cola’s chair and chief executive in James Quincey announced a new “major investment plan” which expanded on the next five years.

Quincey and the French authors are set to discuss the deal on Monday, which will be pleasing for the French president.

Quincey said that the investment will be primarily used to add new products within the French market and support innovation.

The money will also go towards the expansion of Coca-Cola European Partners’ manufacturing plants, as the firm makes an active effort to promote environmentally friendly investing and sustainability.

Coca-Cola European Partners intends to “transition to a circular economy”, altering its packaging as part of this effort.

Having added a bottling line for glass bottles only in 2019, it will invest in its Socx, Dunkerque plant to add a “state-of-the-art aseptic bottling line in mid-2020” to meet higher demand for its ready-to-drink tea brand Fuze Tea and for Tropico juice.

“Additional investments across all five CCEP plants in France will enable the introduction of a higher quantity of recycled material in bottles and cans and the replacement of plastic by cardboard for secondary packaging,” said Coca-Cola.

Quincey concluded: “Coca-Cola has been part of France for a century, and our presence today includes more than 2,800 people who work for Coca-Cola in France, plus many more across our entire value chain.

“Today’s announcement shows continued commitment to France, helping to build the French economy and contributing to sustainable French communities for years to come.”

Coca-Cola steps up efforts to promote sustainability

In November, the multinational said that they will be stepping up to ensure that their practices are in line with sustainability measures.

The move comes as part of Coca-Cola’s European strategy to expand environmental friendly policies and increased use of recycled plastic.

The drinks producer announced that the switch at the Jordbro factory near Stockholm would allow the reduction of 3,500 tonnes of newly produced plastic.

“That means a 25% reduction of CO2 emissions annually compared with before the transition, when the portfolio consisted of around 40% recycled plastic,” it said, referring to its Swedish operations.

Along with Coca-Cola, rivals such as PepsiCO (NASDAQ:PEP) are attempting to promote the use of recycled plastic as firms respond to plastic waste pollution worries.

The move as the first step in ensuring that all PET bottles are produced from 100% recycled plastic by the end of 2023.

At group level, Coca-Cola’s recycled plastic ratio is 11% currently, and in western Europe, 27%, Keane said.

Last year, Coca-Cola pledged to collect and recycle a bottle or can for every one it sells globally by 2030.

Markets flat as Martin Luther King Day removes Dow Jones from play

Jamie Gordon
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Markets flat as Martin Luther King Day removes Dow Jones from play
European equities looked slow off the blocks on Monday as they mulled over the absence of their trend-setter. The Dow Jones will get to enjoy a day of reflection upon last week’s successes, alongside time to remember and heed the messages of one of the seminal figures in civil rights advocacy, Dr Martin Luther King Jr. One index which will be sad to have lost its momentum on Monday morning is the FTSE. Last Thursday was testing, with Pearson (LON:PSON) plunging nearly 9% and Whitbread (LON:WTB) falling 5%, though Primark (LON:ABF) performed well. Friday saw the British market hit a six-month high; it will hope to control any fall from grace today. Speaking on the week’s early knockings, Spreadex Financial Analyst Connor Campbell said,

“With the US off for Martin Luther King Day, it could be a quiet session, the European indices losing their de facto leader in the Dow Jones.”

“It doesn’t help that on top of its absence, the Dow ended last week by pulling back slightly from its all-time highs, the index seeming to settle at 29300. That means the momentum that seemed to be building has, for now, fizzled out, leading to a rather drab open.”

“The FTSE, which hit a 6-month peak on Friday, dipped 10 points after the bell, drifting from that high without going into a full reversal. The DAX was flat at 13500, a level it has hit its head on a few times in the last week or so. The CAC, meanwhile, slipped 0.2%, unable to keep up its assault on 6100.”

“As January 31st grows ever closer, the pound may see more and more mornings like this. Cable fell 0.3%, once again falling under $1.2985, while against the euro sterling shed the same amount, dipping below €1.1705.”

“It is probably going to take something unexpected – a rogue comment from a Davos attendee, perhaps – to prevent the session from being one to forget.”

Fever-Tree shares plunge after “challenging” Christmas

Dina Caruso
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Fever-Tree shares plunge after “challenging” Christmas
Fever-Tree (LON:FEVR) shares plunged on Monday after the business said that the Christmas trading period was a “challenging” one in the UK. Shares in the producer of premium drink mixers were down over 20% during Monday morning trading. The company revealed that group revenue is expected to amount to £260.5 million. However, Fever-Tree said that this result is below what it expected and reflects the “subdued” trading over Christmas in the UK. Fever-Tree highlighted that the wider retail environment in the UK was hit by a “challenging” Christmas. It said that the mixer category was “not immune” from the weak consumer confidence and slowdown in spending. “Whilst Fever-Tree remained the clear market leader, the expected improvement in trading during this important period did not materialise with the macroeconomic uncertainty leading to a subdued end to the year across both the On and Off-Trade,” the business said in a statement. Tim Warrillow, CEO, commented on Monday’s update: “Despite the subdued end to the year in the UK, we have delivered a strong performance across many of our regions in 2019 and begin 2020 with real momentum in a number of key growth markets.” “Whilst the UK mixer category has clearly not been immune from the consumer belt tightening seen in recent months, we remain the clear category leader and have a strong platform to return to growth during 2020 and beyond,” the CEO continued. “However this is a global opportunity which remains in its relative infancy in many markets.” The CEO said: “The trend towards premium spirits and premium long mixed drinks continues to gather momentum around the world. Fever-Tree is the no1 premium mixer globally and our performance in 2019 across US, Europe and as far afield as Australia and Canada highlights the fast-growing international strength of the business.” Fever-Tree had already given some indication of what to expect. The company warned at the end of November last year that “short-term headwinds” in its UK market were set to hit its revenue for the full year. In the past, Fever-Tree has benefited from the UK’s unquenchable thirst for gin. Indeed, the business has been boosted by the nation’s gin craze as its premium tonic water is often paired with the alcohol. Shares in Fevertree Drinks plc (LON:FEVR) were down on Monday, trading at -21.56% as of 10:07 GMT.

Calisen set to be first major IPO of 2020

Andrew Hore
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Calisen set to be first major IPO of 2020

Smart meters firm Calisen is set to be the first large company to come to the Main Market this year. It wants to raise £300m and at least some of that cash will go towards reducing debt.
The business is currently owned by private equity firm KKR and some existing shares will also be sold. Calisen could be valued at up to £1.5bn.
There is a large potential market in the UK for smart meters, but that has been true for many years and companies such as Bglobal have come and gone because business did not build up as it hoped that it would.
Smart meter roll outs have been delayed more than once. The...

Metro Rod propels Franchise Brands

Andrew Hore
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Metro Rod propels Franchise Brands

Franchises owner Franchise Brands (LON: FRAN) has grown strongly in 2019 with positive contributions from all the group. Metro Rod is the main driver of growth, though.
Revenues are expected to be £40.6m, while underlying earnings per share of 4.26p are anticipated – around one-quarter higher than the previous year. The full figures for 2019 will be published on 5 March.
Franchises
Franchise Brands has a portfolio of franchise brands. It started on AIM in August 2016 with car paintwork repair business ChipsAway and domestic oven cleaner Ovenclean. Later in the year, Barking Mad, which offers ...

Rent in London soars

Dina Caruso
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Rent in London soars
Data revealed on Friday that 75% of income is required to rent in the nation’s capital. The latest research by the lettings and sales agent Benham and Reeves revealed that the amount of net income needed to pay rent has increased to 45.5% in England, and accounts for 74.8% of the average salary in London. At the start of the millennium, the average rent made up 28.7% of the average income in England, and 41.1% of income was needed to cover the cost of rent in London. The political and economic uncertainty to prevail in the UK over the past year has caused concern for the housing market. Indeed, with several extensions to the nation’s Brexit deadline, an attempt to prorogue parliament and a general election all happening in the space of one year, the UK’s political landscape has been rather chaotic, to say the least. The housebuilding company Taylor Wimpey (LON:TW) said earlier this week that it welcomes the “increased political stability” to come following last year’s events. “There’s been plenty of positive changes to the rental market in the last 20 years with better codes of practice and improvements through technology allowing for a fairer, more transparent process for both landlords and tenants,” Marc von Grundherr, Director of Benham and Reeves, said in a statement. “Unfortunately, the one thing this can’t address is the huge demand for rental properties and the resulting increase in the cost of renting as a result and with wage growth failing to keep pace, the proportion of our earnings required to cover rent has spiked notably since the turn of the millennium,” the Director of Benham and Reeves continued. Shares in Taylor Wimpey plc (LON:TW) were up on Friday, trading at +0.81% as of 09:22 GMT.
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