Amerisur Resources disappoints with reduced reserves and lower production

A disappointing update from Amerisur on operations and reserves. All are heading lower and that’s after spending roughly $50m+ in capex drilling wells. From May onwards, the drill bit starts spinning on more targets which if successul will save some blushes across the management team. The latter have over promised and under delivered. If Amerisur was a premier league football team, then you can bet your last easter egg they would have been sacked long ago. Mariposa-1 and CPO-5 (as a whole) is the jewel in the crown and thankfully that it is in the hands of ONGC’s management team which look ten times more experienced and capable than AMER. A large HNWI seller adds further woes to the share price and based on today’s RNS’s, he’s been bang on the money when it comes to selling AMER. The stock is down from 2017 highs of 26p to 13p levels this am. AMER was added to the ShareHub 2018 hotlist based on the Mariposa-1 and CPO-5 potential. Progress on this asset looks on track and the next drill target (if successful) has the potential to move resources up considerably. That asset alone is potentially worth Amerisur’s current market cap. It’s been a tough few years for investors and should a predator come forward and offer to end the misery – it might be accepted with ease. AMER has plenty to offer in a region that is seeing renewed interest of late. But management needs to change as progress is slow and cash burn is high.

News catalysts such as drilling results in June/July should at the very least see some speculators return to the stock. But a change in senior management might see much needed larger investors return. Amerisur’s AGM is normally held in May so not long for shareholders to voice their concerns as well as put pen to paper.

Today’s RNS’s can be found on the Amerisur website here

Providence Resources – delivers Barryroe farm out deal

The easter bunny has arrived early for all PVR and LOGP investors. It’s taken a few years to get to this point but finally Barryroe bags a farm out agreement. Based on timelines, it’s likely that any drilling of the 3 x wells will occur in 2019 due to seasonal weather issues in the Celtic Basin. It’s the big news that all have been waiting for and it hasn’t disappointed. As a word of caution, the chinese are well known for their time consuming diligence so be aware that the deal still needs to conclude via all the usual sign off’s.

PVR is part of TheShareHub top ten for 2018 and looks like it may have sealed a place in the 2019 picks too. Subject to deal concluding of course.

28/03/2018 7:00am
UK Regulatory (RNS & others)

Dublin and London – March 28, 2018 – Providence Resources P.l.c. (PVR LN, PRP ID), the Irish based Oil & Gas Exploration Company (“Providence” or the “Company”), today provides a commercial update on Standard Exploration Licence (“SEL”) 1/11 that contains the Barryroe oil accumulation. SEL 1/11 is operated by EXOLA DAC (“EXOLA”)(80%), a wholly-owned Providence subsidiary, on behalf of its partner Lansdowne Celtic Sea Limited (“Lansdowne”)(20%), collectively referred to as the “Barryroe Partners”. The area lies in c. 100 metre water depth in the North Celtic Sea Basin and is located c. 50 km off the south coast of Ireland.

Standard Exploration Licence (“SEL”) 1/11

Farm-Out The Company is pleased to announce that the Barryroe Partners have signed a Farm-Out Agreement (“FOA”) with APEC in relation to SEL 1/11. APEC is a privately owned Chinese company which has a strategic partnership with China Oilfield Services Co., Ltd (“COSL”) and JIC Capital Management Limited (“JIC”) for the investment and development of offshore oil and gas opportunities worldwide utilising Chinese drilling units, services and equipment. Under the terms of the FOA, in consideration for APEC being assigned a 50% working interest in SEL 1/11:

Commercial Terms — APEC will be directly responsible for paying 50% of all the cost obligations associated with the drilling of 3 vertical wells, plus any associated side-tracks and well testing (hereinafter referred to as the “Drilling Programme”); — APEC will provide a drilling unit and related operational services for the Drilling Programme; — APEC will finance, by way of a non-recourse loan facility (the “Loan”), the remaining 50% of all costs of the Barryroe Partners in respect of the Drilling Programme; — The Loan, drawable against the budget for the Drilling Programme, will incur an annual interest rate of LIBOR +5% and will be repayable from production cashflow from SEL 1/11 with APEC being entitled to 80% of production cashflow from SEL 1/11 until the Loan is repaid in full; — Following repayment of the Loan, APEC will be entitled to 50% of production cashflow from SEL 1/11 with EXOLA and Lansdowne being entitled to 40% and 10% of production cashflow, respectively. Operational Terms — EXOLA will act as Operator for the Drilling Programme with technical assistance being provided by the APEC Consortium; and, — After the completion of the Drilling Programme, APEC will have the right to become Operator for the development/production phase. Issuance of Warrants to APEC — Upon completion of the Drilling Programme, APEC will be able to subscribe for warrants over 59.2 million shares in Providence at a strike price of GBP0.12 per share (the “Warrants”). — The Warrants, representing circa 9.9% of the current issued share capital of Providence, are exercisable for a period of 6 months following the completion of the Drilling Programme.


The Closing of the Farm-Out (“Closing”), which is expected to occur in Q3 2018, is conditional on completion of all ancillary legal documentation required to implement the terms of the FOA, and is subject to the approval of the Minister of State at the Department of Communications, Climate Action and Environment and the approval of the Chinese government. In addition, the details of and schedule for the Drilling Programme are subject to further ongoing technical discussions between the Consortium, Exola and Lansdowne. Subject to Closing, the revised equity in SEL 1/11 will be EXOLA (Operator, 40%), APEC (50%) & Lansdowne (10%). Further announcements on the transaction will be made in due course.

Speaking today, Tony O’Reilly, Chief Executive of Providence said: “This is a significant transaction for Providence and Lansdowne which will deliver multiple new penetrations of the areally extensive Barryroe field. In addition, it also provides for the acquisition of modern dynamic well test data that should assist in advancing the field to production. Over the coming months, we will be working with the APEC Consortium to close the transaction and finalise the specific timeline and the precise details of the drilling programme. We are very pleased to have agreed this deal, which will allow us to avail of ‘state of the art’ drilling units and technical capabilities in order to advance Barryroe to first oil.”

Mr. Colin Lui , Chairman of APEC Energy Enterprise Limited commented: “APEC, supported by Jianyin Investment Company and China Offshore Services Ltd, are very pleased to have strategically joined forces with Providence and Lansdowne to develop the Barryroe field. This field has significant recoverable resources and we look forward to jointly developing this opportunity. Whilst the Farm-Out Agreement has been agreed specifically for Barryroe, the parties have also agreed to jointly investigate further opportunities in other licensed blocks offshore Ireland in the future.”

CERP Q&A available on website

Useful media channel for communicating with shareholders. The share price has drifted of late due to the news voids but should bounce back strongly assuming the business continues to make the production growth progress set out in the core strategy presentation for 2018. Retail investors really should try and get away from short termism and focus on the reasons why they invested in the first place rather than watching the share price on a daily basis. That said, waiting 3 months for news quarter upon quarter certainly would play to the ‘sell on news’ brigade. It would not surprise me to see CERP delivering news in the future which goes beyond the quarterly production updates as the company has quite a lot to get through in 2018 and none of that has been RNS’d yet. It looks like a 10p stock trading at 4.75p at present which presents risk on buyers with a great opportunity. Schroders appear to have eased up on their recent buying which previously would have supported the share price. Roll on next update.

See link below for Q&A.

W Resources confirm Funding Package

Great news for W Resources shareholders. It’s been a longtime coming but at last Mr Masterman has delivered. It’s quite a feat to discuss a $35m funding package (nevermind secure one) when your company market cap is less than $30m. It could have been another painful dilutive ‘AIM’ story for investors. Hence today’s confirmation should not be underestimated. The terms look a little hefty in interest rate terms and the 5% warrants have not been disclosed as yet but my guess is that BlackRock will have wanted these sub 0.5p which might explain the small drop pre initial funding news RNS in January 2018. That all said, I would take this deal over equity dilution everytime. Today… the market cap is almost double the pre-funding discussion level at $57m. Roll on production in 2019!

W Resources is currently the best performer across TheShareHub top ten picks with a near 70% increase in just 6 weeks. It looks odds to be the first multibagger of the hotlist picks and needs a test of 0.77p to get a mutibagger trophy.

Current Share Price 0.64p


RNS Number : 0734F
16 February 2018
W Resources Plc

US$35m Loan Facility Finalised with BlackRock to Fund La Parrilla

W Resources Plc (AIM:WRES), the tungsten, copper and gold exploration and development company with assets in Spain and Portugal, is delighted to announce that the Company has signed a Credit and Guaranty Agreement (the “Agreement”) with the lenders thereunder (the “Lenders”), including one or more funds managed by BlackRock Financial Management Inc. (“BlackRock”) to provide a US$35 million secured term loan facility to W Resources to fund the La Parrilla mine development (the “Loan”).

The first US$13.125 million is expected to be drawn this week after satisfaction of the conditions precedent applicable to such funding, with the balance of US$21.875 million expected to be committed and funded in Q2 2018, after the satisfaction of a number of conditions precedent, including those typical for this type of term loan.

The key terms of the Loan are as follows:

— The Loan is for a scheduled term of five years, with a two year non call period. The Company has the right to repay the Loan after two years for a premium of 5%, after three years for a premium of 3%, and after four years for no premium;

— Subject to any early repayment permitted or required under the Agreement, repayment will made by way of a cash flow sweep, utilising free cash to repay the loan;

— The Loan is subject to an average 5 year interest rate of 12.6%, being 14% in the first year, 13% in the second year and 12% thereafter;

— First year interest is Payable in Kind (“PIK”) and added to the principal, while 50% of the second year interest is PIK and 50% is payable in cash;

— Lenders will receive a non-refundable upfront fee of 3% of the face value of each of the respective Loan disbursements;

— Lenders will receive warrants totalling 5% of W’s fully diluted equity.

Michael Masterman, Chairman of W Resources commented: “We are delighted to have partnered with BlackRock to obtain this US$35 million secured term loan facility. The Loan provides full funding for La Parrilla and now it is full steam ahead.

“Engineering and planning at La Parrilla is advanced and the three primary construction contracts have been awarded. As outlined, the timetable to deliver the project is 12 months from the close of financing which moves the Company into production in Q1 2019.”

David Trucano, Portfolio Manager, BlackRock Global Credit team commented: “We are pleased to provide funding on behalf of our clients to restart operations at La Parrilla, one of the most efficient mines in Europe. We believe the current dynamics of the tungsten market present a unique opportunity for W and our clients.”

Short Term Loans

In order to provide interim funding, each of, Beronia Investments Pty Ltd ATF Duke Trust, of which Dr Byron Pirola (a director of the Company) is both a beneficiary and trustee and Symmall Pty Limited, of which Mr Michael Masterman (a director of the Company) is both a beneficiary and trustee, have lent the Company short term loans of EUR100,000 each. The loans are unsecured and carry an interest rate of 10% per annum. Each of the loans will be repaid using the first draw down of US$13.125 million under the Agreement.

By virtue of their size, the loans constitute related party transactions under Rule 13 of the AIM Rules for Companies. The independent director of W, having consulted with the Company’s nominated adviser, considers that the terms of the transactions are fair and reasonable insofar as the Company’s shareholders are concerned.

Hummingbird is buzzin

Friday morning RNS’s (or late afternoon) are normally deployed by companies to tuck away ugly news in hope the weekend’s activities and 2 days away from market will cleanse the mind. Equally, there is an argument to say that a ‘good news’ story can travel further when there is an entire weekend to discuss and absorb it.

Hummingbird have decided on the latter and delivered a very bullish RNS this morning. Often after a period of excitement and anticipation as development projects finally hit commercial phase, investors are hit with a period of news voids as companies get their heads down and deliver on Sales. Well, Hummingbird are not content with just knocking out Gold Sales… they want more. Exploration has kicked off already and any success should be seen in the share price swiftly. Unlike other small Gold explorers, Hummingbird already have a fully operational mine which to date has a 6 to 7 year mine life. The key objective now is to discover more resources to feed the mine for more years to come – extending to 10 years or 12 years in effect extends the p/e ratios potential. If Hummingbird can get Yanfolila to 10 year mine life minimum, then a p/e of 8 to 9 is more than fair. At that level and based on circa $70m net cash flow to the business per year, a market cap of circa $500m should be doable with ease assuming Gold is above $1300oz.

That’s not far off £1 a share. At current price of 34.5p, that’s almost 3 bagger territory.

Long way to go of course and no guarantees, but Hummingbird are buzzing and thus far they haven’t put a wing wrong.

Hummingbird Resources is part of TheShareHub’s top ten picks for 2018.


RNS: 16/02/2018

Hummingbird Resources plc (“Hummingbird” or “the Company”) 

Ramp-up On Track and Exploration Programme Commenced At
Yanfolila Gold Mine, Mali

Hummingbird Resources (AIM: HUM) is pleased to announce an update on operations at the Yanfolila Gold Mine in Mali (“Yanfolila”), which commenced gold production in December 2017.

Production Update

Since first gold was poured on 19 December 2017, Yanfolila has steadily been ramping up towards full production in line with the Company’s planned schedule.  Over the past ten days the plant has been operating at an average of ~90% of design throughput capacity.  The plant has been achieving ~96% gold recoveries1, higher than design specification, consistently since the start of operations.

Total gold recovered to date is 10,737 ounces of which 5,483 ounces has been shipped to refiners.

In this first period of operations the plant was processing ore from the lower-grade stockpiles, in order to ensure plant performance and gold recovery were satisfactory before increasing the head grade.  Now that the plant is running close to name-plate capacity and recoveries remain consistently high; higher-grade ore is increasingly being introduced to the plant.

Exploration Update

The 2018 exploration programme at Yanfolila has commenced with the focus being on the conversion of indicated and inferred resources to mineable reserves.  The Company has over 1 million ounces of resources outside the mine plan which the Company is targeting for conversion into reserves.  It is the Company’s intention to spend in the region of US$8-10 million on exploration this year, but not more than 15% of Hummingbird’s operating cashflows from Yanfolila.  The Company aims to pursue an aggressive exploration strategy to extend the mine life, which will be controlled by strict financial discipline.

His Excellency Mr. Ibrahim Boubacar Keita, the President of the Republic of Mali, has postponed his visit to Yanfolila due to other business, however, the official opening ceremony is expected to take place with the President in attendance at a later date in 2018.

Dan Betts, CEO of Hummingbird, commented:

“I am pleased that activity on site is steadily progressing as per the ramp-up schedule and we are on track to achieve name plate capacity from the plant by the end of Q1 2018.

“I am particularly happy to report on the technical performance of the plant, with recoveries over 95% already and a solid performance of the milling circuit. This stands us in good stead as we continue to ramp up the performance of the operation.”