ARC Minerals taps further high-grade copper assays

Jamie Gordon
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ARC Minerals taps further high-grade copper assays
Copper mining company ARC Minerals Ltd (LON: ARCM) announced on Tuesday that it had discovered additional near surface, high grade copper assays from its maiden diamond drill exploration programme at its Cheyeza East project in Zambia. Today’s update followed a year of good progress for the Company, with ARC Minerals also acquiring a 5% interest in Zaco Ltd and identifying West Lunga as a drilling target. The Company reported back with the following intersection yields:

· CHDDE047 intersected 1.44% Cu over 20m from 34.50m and 1.41% Cu over 11m from 52m

· CHDDE049 intersected 1.20% Cu over 14m from 38m

· CHDDE051 intersected 0.93% Cu over 14.50m from 17.50m

· CHDDE027 intersected 0.62% Cu over 15.50m from 44.50m

· CHDDE045 intersected 0.61% Cu over 10.74m from 74.50m

The Group also posted a series of highlight high grade copper assay segments, the most impressive of which was 3.67% Cu over 5m from 34m. Elsewhere in mining, Lucara Diamond Corp (TSE: LUC) was pessimistic in its revenue guidance, MC Mining (LON: MCM) was granted a coal mining right in South Africa, KEFI Minerals PLC (LON: KEFI) said it was still waiting for a go-ahead at the Tulu Kapi Gold project and Panther Metals Plc (NEX: PALM) secured a lucrative exploration licence.

ARC Minerals comments

Nick von Schirnding, Executive Chairman, stated,

“I am pleased to report further positive drilling results from Cheyeza East. It is becoming clear that we are sitting on a potentially significant economic prospect – and one that seems to be expanding. A number of holes such as 27, 28 and 45 are to the northwest and southwest of the high grade zone already identified and bodes well for delineating a significant resource. We have commenced a study to supply the Kalaba plant with material from Cheyeza East which is very exciting. To date over 75% of holes drilled at Cheyeza have shown mineralisation.”

“In the meantime, we have commenced drilling at the Muswema and West Lunga target areas which we will report back on once we receive assays.”

Investor notes

The Company’s share price is down 1.66% or 0.049p to 2.90p per share 05/11/19 13:42 GMT. Neither a dividend yield nor p/e ratio are available, their market cap is £21.45 million.

Shell set to purchase French wind farm specialist

Ishen Patel
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Shell set to purchase French wind farm specialist
Royal Dutch Shell Plc Class B (LON: RDSB) have moved to purchase French wind farm specialist EOLFI as part of its plans to expand into the oil major’s electricity business. EOLFI have focused largely on solar and wind energy operations, including a specialism in offshore wind farms. Offshore wind is one of the fastest growing renewables markets, with floating structures the technology’s next frontier as they utilise waters that are too deep for traditional turbines. The FTSE100 (INDEXFTSE: UKX) listed firm, generate most of their revenue from Oil and Gas, however last week they reported a slump in profits in their third quarter update. This fall in profits came as no surprise as the global price of oil had dropped due to economic and political events. Shell was not the only oil giant to report falling profits after SABIC (TADAWUL: 2010) reported an impairment loss of $400 million, and Total SA (LON: TTA) profits fell 15% in the same period. Shell have big aims to diversify out of oil and gas into renewable energy, and this move is a bold statement to competitors. Shell want to become the world’s largest electricity company and expects to invest £1.6 billion to $3 billion a year — nearly 10% of its overall spending — on its power division by 2025. “We believe the union of EOLFI’s expertise and portfolio with Shell’s resources and ability to scale up will help make electricity a significant business for Shell,” Offshore Wind Shell vice president Dorine Bosman said in a statement. The financial details of the deal are yet to be formalized and released, however initial negotiations have commenced. Further details of the deal are expected to be released at the start of December. EOLFI is part of a group developing a pilot project off the coast of Brittany, France. The deal looks like a potential dime for Shell, as EOLFI have operations in renewable energy. If the acquisition formulates Shell could benefit from expertise and diversification into a new sector. Shares of Shell are trading at 2,329p having spiked 1.17% after this news hit headlines. 5/11/19 14:21BST

Lucara Diamond revenue guidance at lower end following mixed Q3

Jamie Gordon
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Lucara Diamond revenue guidance at lower end following mixed Q3
Diamond exploration and mining company Lucara Diamond Corp (TSE: LUC) posted a mixed set of results during Q3, and subsequently revised its revenue outlook towards the lower end of its full-year guidance. During Q3, the Company accrued $45.3 million of revenue, down marginally from $45.7 million year-on-year. Further, Lucara Diamond Corp’s year-to-date EBITDA was also down to $50.2 million, from $55.7 million on-year. However, the Group sold 14% more carats during the quarter, from 101,600 to 116,200 carats. Also, the Company’s revenues for the first three quarters stood at $136.5 million, up from $135.6 million, due to three tenders and sales through its Clara platform. Its cash flow during the third quarter also stood at $13.8 million, jumping from $3.7 million a year earlier.

The Company paid a quarterly dividend of CA$0.025 per share. It said that it had made a change in its revenue guidance, down to between $170 to $180 million.

Elsewhere in mining, MC Mining (LON: MCM) was granted a coal mining right in South Africa, KEFI Minerals PLC (LON: KEFI) said it was still waiting for a go-ahead at the Tulu Kapi Gold project and Panther Metals Plc (NEX: PALM) secured a lucrative exploration licence.

Lucara Diamonds comments

Eira Thomas, President and CEO stated, “Lucara continues to deliver solid results and strong margins on the back of strong operational performance at Karowe in Q3. With operating margins at Karowe approaching 60%, and no long-term debt, Lucara is well positioned to continue to weather the difficult diamond pricing environment that has prevailed since the beginning of the year. Moreover, this continued strong performance combined with the encouraging results reported in our recently completed feasibility study (see news release “Lucara Announces Positive Feasibility Study For Karowe Underground”), provides a compelling rationale for investing in an underground expansion at Karowe, potentially adding 13+ years of mine life and generating an after-tax NPV (@5%) of US$718 million and in excess of US$5.0 billion in gross revenue. Our latest special stone recoveries, which include a 9.7 carat blue diamond, a 4.1 carat pink diamond, a top white 123 carat diamond and most recently, a top white 106 carat diamond continue to bode well for our final sale of the year, and we remain on track to meet or exceed our guidance in every respect. We continue to see positive progress with Clara, reaching $6 million of total value transacted on the platform since sales began in December 2018.”

Investor notes

The Company’s shares stand at 1.06 CAD per share 04/11/19 15:59. Their market cap is 420.67 million CAD, their dividend yield is inviting at 9.43%.

IWG report revenue against after business expansion

Ishen Patel
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IWG report revenue against after business expansion
IWG PLC (LON: IWG) have reported revenue gains after opportunities for business expansion in its franchise department came to bloom. The office space provider built momentum with its expansion plans and international franchise business, after a period of volatility in share price and a bid from Terra Firma (CVE: TII). IWG reported a 9.4% increase in revenue to £692.3m in the three months to 30 September, driven by the Europe, Middle East and Africa (EMEA) and US markets. This comes after the news that IWG had sold its Swiss business in a £94 million deal, to a joint entity owned by private banking group J. Safra Group and real estate investor P. Peress Group. During the third quarter, IWG reported that company added 66 new organic locations to its network with net growth capital investment of £64.4 million. “Where it makes strategic sense, we are ready to use our strong financial position to undertake such activity,” the company said. IWG said: “We remain very confident in the structural, long-term growth in the flexible workspace market and IWG’s leading position within it, which we continue to extend. “ IWG added “We believe our transition to a franchising model by partnering with a growing and diverse range of third parties will deliver a quicker and more asset light approach to growth, which benefits all stakeholders” “We are making excellent progress in shaping the business to benefit from this significant growth opportunity. We continue to invest in our leading global platform and management to support our strategy and look forward to the rest of the year with confidence.” Additionally, IWG boss Mark Dixon set an example to the industry about WeWork’s hectic year warning other businesses about potential problems. Dixon said: “There is a possibility some WeWork tenants could be concerned about the headlines and worried about potential disruption to their businesses.” The FTSE 250 (INDEXFTSE: MCX) firm reduced debt to £301.2 million from £433.9 million. Shares of IWG are trading at 396p per share. 5/11/19 14:05BST.

AB Foods Owner confidence drives shares up

Ishen Patel
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2
AB Foods Owner confidence drives shares up
Associated British Foods plc (LON: ABF) have given investors renewed confidence about future trading, driving share prices up. AB Foods have forecasted strong growth figures in their next trading update, alluding to progress in its sugar and grocery businesses supplementing the further expansion of its Primark fashion chain. Earlier in the year, AB Foods maintained expectations for their full year outlook. Following this renewed confidence, seniority at AB may even look to exceed expectations to beat analyst and market predictions. The main factor which has driven AB Food’s success in financial 2019 has been the expansion in sugar sales. Profit from the division slumped 79% to £26 million in 2018-19. However, it is set to benefit materially from increases in European Union sugar prices and from further cost reductions. “We had forecast the sugar decline, it’s now behind us, and the group still made progress despite it,” Chief Executive George Weston told Reuters. “Prices in Europe are significantly ahead of where they were a year ago,” he said. The group are expecting another strong year of trading, with emphasis on the Twining’s Ovaltine brand expanding from more efficient tea supply chains. Primark, which generates about half of group revenue and profit, plans to add a net 1 million square feet of additional selling space in the new year. A small reduction in margin is expected, reflecting currency moves. Weston said he was pleased with Primark’s trading so far in the 2019-20 year, highlighting the UK performance as “solid” in a tough overall market. “We’re not completely immune from it, but we think we are winning,” he said, adding: “We’re well set up for Christmas.” For the financial year ending September 14, overall sales at Primark came in at £7.79 billion – a 4.2% year-on-year uptick at actual exchange rates. AB Foods said Primark performed well in the UK, with a “significant gain” in market share and sales growth of 2.5 per cent driven by the opening of four new stores – such as Birmingham High Street, which is now Primark’s biggest store worldwide. Sales in the Eurozone were 4.8 per cent ahead of last year at constant currency, boosted by growth in Spain and France and strong performances in Italy and Belgium, despite tough political outlook with the EU. AB Foods said “the positive reception by US consumers to Primark, combined with our profitable store model, gives us confidence for further expansion in the US market”. Weston concluded by saying “Next year the group is well-positioned for further progress, with the continued expansion of Primark, a material improvement in our sugar profit and strong profit growth in grocery.” AB Foods will be pleased with the current state of the supermarket industry, with firms such as Tesco (LON: TSCO), Marks and Spencer (LON: MKS) and Sainsbury’s (LON: SBRY) all setting up new initiatives to stimulate consumer demand. Shares have spiked 5.62% as a result of this confident outlook, AB Food shares are trading at 2,375p per share. 5/11/19 13:47BST.

Topps Tiles CEO leaves, replaced by CFO

Dina Caruso
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Topps Tiles CEO leaves, replaced by CFO
Topps Tiles (LON:TPT) announced on Tuesday that its Group Chief Executive had decided to step down. Shares in the UK’s largest tile specialist were down during trading on Tuesday. The company revealed that Group Chief Executive Matt Williams has decided to leave his position with effect from 29th November 2019. Meanwhile, the current Chief Financial Officer, Rob Parker, will take over as Group CEO on the same date. Topps Tiles added that Matt Williams will remain as an advisor to the business until the end of May 2020 to ensure a smooth handover. The company has begun to search for a new Chief Financial Officer, it added. Matt Williams said that he will leave the business in order to “pursue a new challenge”. “Topps is, and will always remain, a very special company to both me and my family. It is a quality business with enormous strength in its specialism which it derives from its people and culture. It has been an honour and privilege to lead and work alongside everybody within the Topps family and I wish them all well for the future,” Matt Williams continued. At the beginning of October, the company announced that like-for-like sales declined during its fourth quarter, and were impacted by a difficult economic climate. It blamed the “more challenging economic backdrop”, with uncertainty hitting consumer sentiment. Rob Parker is “delighted to be offered this opportunity to lead the organisation”. “Topps is an exceptional business in so many ways and I am very proud of the part I have played in our journey so far. I look forward to the future with energy and excitement as we continue to refine our market leading retail offer and to further our expansion into the commercial tile market,” Rob Parker said. Shares in Topps Tiles Plc (LON:TPT) were down trading at -2.19% as of 13:35 GMT Tuesday.

MC Mining shares dip despite Generaal Mining Right approval

Jamie Gordon
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1
MC Mining shares dip despite Generaal Mining Right approval
On Tuesday, MC Mining Ltd (LON: MCM) announced that the South African Department of Mineral Resources granted a mining right for its 74% owned Generaal coking and thermal coal project in the Limpopo province. The Generaal, Chapudi and Mopane Projects comprise the Company’s Greater Soutpansberg Project. The GSP is in close proximity to the Musina-Makhado Special Economic Zone, which is an area designated by the government to focus primarily on energy and metallurgical industries.

The Generaal Project contains more than 407 million gross tonnes of inferred coal resources, which supports the MC Mining strategy of being South Africa’s pre-eminent producer of hard coking coal.

The Group submitted its mining right applications for the three GSP projects to the South African Department of Mineral Resources in 2013. The Generaal Project mining right is the second of the applications to be granted, following the Chapudi Project being granted in December 2018. Elsewhere, KEFI Minerals PLC (LON: KEFI) said it was still waiting for a go-ahead at the Tulu Kapi Gold project and Panther Metals Plc (NEX: PALM) secured a lucrative exploration licence. Meanwhile, Shanta Gold Limited (LON: SHG) and Mining company Capital Mining Ltd (LON: CAPD) both reported impressive third quarters.

MC Mining comments

David Brown, Chief Executive Officer, stated,

“The granting of the Generaal Project mining right is a further step in unlocking value from MC Mining’s significant coking and thermal coal assets, positioning the GSP to be a potential long-term coal supplier to industrial users both local and offshore, including the planned Musina-Makhado SEZ.”

“The long-term development of the three GSP project areas is complementary to our flagship Makhado hard coking coal project, also in the Soutpansberg Coalfield. The Company has made significant progress in advancing Makhado during the last 12 months and anticipates completing the Phase 1 capital raise process in the near-term in order to facilitate the commencement of construction in Q1 CY2020. The conclusion of domestic and export Makhado Phase 1 and Phase 2 off-take agreements reflects the market appetite for hard coking coal and the significant potential of projects located in this coalfield.”

Investor notes

The Company’s shares dipped by 6.67% or 2.00p to 28.00p 05/11/19 13:25 GMT. Analysts from Peel Hunt reiterated their ‘Buy’ stance on MC Mining stock. Neither a p/e ratio nor dividend yield are available, the Group’s market cap is £42.26 million.

Suzuki report quarterly slip amid Indian market slump

Ishen Patel
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1
Suzuki report quarterly slip amid Indian market slump
Suzuki Motor Corp (TYO: 7269) have given shareholders a worrying update this morning after reporting that quarterly profit slipped by almost a third, amid crashing demand in India. As a result, the Japanese car maker slashed its full year sales outlook after the report was published, showing a gloomy future for Suzuki Indian operations. The result does not come at the best of times for the Japanese manufacturer, as it was reported that rivals Peugeot (EPA: UG) and Fiat (NYSE: FCAU) had finalized their merger move to form a new automobile titan. However, Suzuki have not been the only car manufacturer to cut their annual guidance. Renault (EPA:RNO) also experienced falling demand and as a result cut their annual guidance last month. “We no longer think that growth in India will be an uninterrupted move upwards,” President Toshihiro Suzuki told an earnings briefing. “We anticipate hills and valleys, so we need to focus on recovering from the current valley we’re in to ensure sustainable growth.” Operating profit for Suzuki tumbled 32% to £398.6 million in the July-September quarter from the same period a year earlier. Additionally, the Japanese titan saw domestic production fall due to the need to attend to a mileage scandal. Suzuki, which accounts for roughly half of India’s passenger vehicles through its majority stake in Maruti Suzuki India Ltd (NSE: MARUTI) sold just 305,000 vehicles in India in the quarter, down 32% and its lowest quarterly sales since the December 2014. Globally, Suzuki posted quarterly sales of 670,000 vehicles, seeing a 20% fall from the year prior. Seniority have forecasted total global sales totaling 2.85 million units, down 15% from an earlier forecast. Suzuki and Toyota Motor Corp (NYSE: TM) announced in August they would take stakes in each other. This was an attempt to try and leverage their combined scale to manage costs and boost development of new vehicle technologies. Shares of Suzuki jumped 1.44% despite the slowdown in sales, trading at 5,347 JPY. 5/11/19 13:06BST.

AIB shares fall despite positive update

Ishen Patel
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0
AIB shares fall despite positive update
AIB Group plc (LON: AIBG) have released a recent trading statement on Tuesday morning. Despite challenging political conditions the bank delivered a solid performance however, shares have fallen slightly. The Dublin-headquartered bank said net income “remained steady” in the nine months ended September 30. AIB’s net interest margin for the period was 2.42%, though taking a 7 basis point hit year-to-date from excess liquidity and further weakened by a drop in investment securities income and “increased MREL-related funding costs” Despite the tough market conditions, the fact that AIB have managed to deliver positive results will suffice shareholder appetite. Other competitors have found it tough to operate in the market, as we have seen the crisis at Deutsche Bank AG (ETR: DBK) continue, whilst HSBC (LON: HSBA) and Lloyd’s (LON: LLOY) have reported third quarter losses. “We continue to take management action in relation to negative deposit pricing. Due to the distortionary impact on NIM from excess euro liquidity volumes grossing up our balance sheet, we expect our full-year NIM to be marginally below 2.40%,” said AIB. AIB have made a concerned effort to cut costs within operations, expecting annual costs of around €1.5 billion. As of September 30, gross loans stood 0.3% higher at €62.7 billion versus €62.9 billion at the end of 2018. While the performing loan book was up 2.3% at €58.1 billion from €56.8 billion. Customer accounts rose 3.7% to €70.2 billion from €67.7 billion on a “strong Irish macro-economic backdrop” and the loan to deposit ratio on September 30 was 87%. Chief Executive Colin Hunt said: “Following a solid operational performance in H1, we continue to focus on controlling the controllables; non-performing exposures, quality of lending and cost discipline. Our recently announced portfolio sale brings our 2019 c. 5% NPE milestone into sight. We continue to align our business to serve our customers sustainably and look forward to updating the market in Q1 2020 with our strategic refresh and intentions for capital return.” Shares of AIB fell 1.62% during Tuesday and are trading at €3 per share. 5/11/19 12:43BST.

Kenmare Resources names new Non-Executive Director

Jamie Gordon
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Kenmare Resources names new Non-Executive Director
Titanium mining company and operator of the Moma Titanium Minerals Mine in northern Mozambique, Kenmare Resources (LON: KMR), today announced that it had appointed a new Non-Executive Director with immediate effect. The new Non-Executive Director has been named as Dr. Elaine Dorward-King. Dr Dorward-King has over thirty years’ worth of experience in mining, chemical and engineering spaces and a PhD in Analytical Chemistry from Colorado State University. Her past roles have included acting as Executive Vice President of Sustainability and External Relations for Newmont Goldcorp (NYSE: NEMP), holding roles such as Global Head of Health, Safety and Environment for Rio Tinto (LON: RIO) between 1992 and 2013, and Managing Director of Richards Bay Minerals.

In conjunction with her appointment to the Board, Dr. Dorward-King will also become a member of Kenmare Resources’s Sustainability Committee.

Elsewhere in mining, KEFI Minerals PLC (LON: KEFI) said it was still waiting for a go-ahead at the Tulu Kapi Gold project, while Panther Metals Plc (NEX: PALM) secured a lucrative exploration licence and Shanta Gold Limited (LON: SHG) reported an impressive third quarter.

Kenmare Resources comments

Steven McTiernan, Chairman, stated,

“I am delighted to welcome Elaine to Kenmare’s Board. Her significant leadership experience in both mineral sands and sustainability will complement the existing skillset of our Directors to ensure a strong balance of skills, experience and diversity.

Kenmare is focused on operating responsibly, with a progressive land rehabilitation programme, the majority of our power needs supplied by hydropower and no chemicals used in our mining or processing operations. We look forward to Elaine’s counsel as we strive to continually improve our environmental, social and governance performance.”

Investor notes

Following the update, the Company’s shares have dipped 0.41% or 1.00p to 244.00p per share. Analysts from Peel Hunt reiterated their ‘Buy’ stance on Kenmare Resources stock. The Group’s p/e ratio is 6.86 and their dividend yield stands at 0.85%.

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