PROACTIVE NEWS SUMMARY: Condor Resources, Barclays, Rubicon Diversified Investments, Pura Vida, Next, Greene King, William HillReported by Proactive Investors on Tuesday, 3 July 2012 (on July 3, 2012)
One of today’s MAIN storIes by Proactive Investors covered today’s news from *Condor Resources (LON:CNR)*, which was the top performer in London markets today.
Shares in the mining group rose more than 40 per cent after the latest drilling results appeared to support the potential for open pit mining at the La India project in Nicaragua.
Chief executive Mark Child described the data from the latest 2,613-metre tranche of the fully-funded 7,000-metre programme as “excellent”.
Investors and analysts appeared to agree, with shares hitting 81.37 pence at 1.10 pm for a rise of 43 per cent.
The latest work returned 12.2 metres at almost 35 grams per tonne of gold at a depth of 173 metres and 6.65 metres at 32 grams.
As interesting as these bonanza grades is the fact that drilling uncovered a 28 metre section at 1.63 grams per tonne that starts less than 50 metres below surface. This points to the open-pit potential of La India.
“The company seems to be on course to deliver on both its objectives for the current 7,000 metres drilling programme, firstly to prove the open pit potential of the project and secondly to push the La India project overall resource to 1.75 million ounces, and double the Indicated resource to 500,000 ounces,” said analyst Kurt Budge at City firm Merchant Securities.
So far 4,665 metres of a 7,000 metres have been drilled on the La India Vein Set.
They provide further evidence that the La India and California veins coalesce not only at depth but at surface along a 600 metre strike length.
They lie almost parallel to each other in the same valley and have strike lengths of 2,000 and 1,300 metres respectively.
In the meantime,* Barclays (LON:BARC)* lost two top executives today as both chief executive Bob Diamond and COO Jerry del Missier quit in the wake of the Libor rate rigging scandal.
It leaves the banking group in a perilously unstable position.
And if it hadn’t been for chairman Marcus Aguis’ decision to stay on to find a successor for Diamond, Barclays might have lost its three most influential figures in the space of a day and a half.
Agius said: "Jerry played a pivotal role in many of Barclays standout successes during the last 15 years, including his extraordinary contributions as part of the leadership team that built the investment bank.
“His many contributions to the firm were critical to why Barclays was able to weather the extreme market turbulence of the credit crisis as well as we did. His colleagues, clients and other stakeholders hold him in the highest regard."
Earlier in a tumultuous day Diamond bowed to mounting pressure political pressure and resigned as chief executive.
The American, who has been with the group for 16 years, said he was stepping down because the pressure placed on Barclays had reached a level that “risks damaging the franchise”.
His exit follows Barclays’ record fine for attempting to manipulate the interest rate market, which has widened to implicate other City institutions including the Bank of England and has prompted a parliamentary probe.
Diamond said: “I am deeply disappointed that the impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth.
“I know that each and every one of the people atBarclays works hard every day to serve our customers and clients.
“That is how we support economic growth and the communities in which we live and work.”
He was due to appear in front of the Treasury Select Committee in the wake of the revelation and signaled he will still attend, saying “I look forward to fulfilling my obligation”.
Last week, Barclays was fined £290 million by regulators in the UK and US for attempting to rig Libor and Euribor, the interest rates at which banks lend to each other.
The Serious Fraud Office is also considering whether to bring criminal charges.
In other news, *Rubicon Diversified Investments (LON:RUBI)* announced this morning it has chosen the Airbus A319 to be the backbone of its new Africa-focused low-cost carrier, FastJet.
*Lonrho (LON:LONR)* has teamed up with Sir Stelios Haji-Ioannou to create the airline and will use Lonrho’s Fly540 as the platform for the new business.
Fly540 has been flying in the region for around six years now, has 10 planes (seven turbo-props and three regional jets) and, significantly, holds licences to operate from hubs in Ghana, Kenya, Tanzania and Angola.
It carried around 750,000 passengers last year.
FastJet’s aim is to eventually ferry 12 million passengers between cities in Africa using the low-cost blueprint patented in Europe – an undertaking that would require a 40 strong fleet, but which would create a US$1 billion turnover business.
Picking the Airbus passenger jet instead of the popular Boeing 737-700 series serves a major statement of intent.
Commenting today, Rubicon chief executive Ed Winter said: “The decision to launch FastJet with the Airbus A319 enables us to expand rapidly with each aircraft potentially carrying around 250,000 passengers a year.
“Rubicon expects passenger numbers to double from current levels within six months of the introduction of the A319 fleet.
“We plan to add at least five leased Airbus A319 aircraft to the fleet within six months of launch and up to 15 within a year.”
Winter talked recently about his plans to “democratise” air travel in Africa, which means offering tickets for as little as US$20 before taxes one-way. While low by European standards, it might easily be a week’s wages in Ghana.
That said fares compare favourably with the alternative – bus – where journeys are arduous and dangerous. FastJet is pledging to work to European standards of safety security and customer service. “Neither Stelios nor I would be involved in an airline that didn’t”, said the FasJet CEO.
If Winter and his team get the offering correct then the prize is potentially huge.
Another in-depth report took a closer look at Morocco focussed group* Pura Vida (ASX:PVD)*, which expects to complete its work programme on the Mazagan permit in September, which is more than 15 months earlier than expected.
The pending deployment of the Geoexplorer vessel to test the sea bed for oil seeps will be one of the last elements of the programme – along with the completion of desk-top work reprocessing 3D seismic gathered over 3,000 square kilometres.
With the early completion of the work programme it is now expected that a formal farm-out process will be begin in October.
This is significant because it comes at a time when industry interest in the area is high.
“There has been an unprecedented level of transactional activity occurring offshore Africa recently, which suggests we are commencing this farmout process at an ideal time,” said managing director Damon Neaves.
“The recent activity in Morocco is an extension of this broader regional trend, which has seen the industry pursue major resource discoveries in Northwest Africa.
“We believe the formal farmout process will solicit strong interest from several large independents and majors.”
The Geoexplorer will be deployed to Morocco shortly, and it is expected that its work programme will get underway in August – with results in September.
Natural oil slicks have been noted on the water surface previously and Pura Vida has already carried some analysis. Now the Geoexplorer boat is being used to acquire sea bed samples that will be assessed for signs of natural oil seepage.
In all 50 samples will be taken from different locations.
Pura Vida says that this kind of analysis has been successful in identifying areas of active hydrocarbon generation and entrapment.
And in frontier areas like Mazagan, locating oil seepage can significantly improve the probability of finding reservoired hydrocarbons below the surface, it added.
Meanwhile Pura Vida is continuing its seismic reprocessing work. Initial results are expected in August and the programme will be completed in September.
We also covered a note from Deutsche Bank, which said a clutch of British firms may be poised to benefit if consumer demand in the UK turns out to be better than expected.
Equity strategist Gareth Evans says the German bank’s ‘UK to UK’ basket of stocks has outperformed the FTSE350 by more than 11 per cent in the year to date.
And he highlights that domestic stocks on the FTSE250 have outperformed the ‘globally exposed’ stocks by 30 per cent in the past year.
“We believe there is case to be made for UK domestic demand and it could prove sufficient to sustain these already strong performances from UK dependent stocks,” Evans said in a note.
He says the recent drop in oil prices, falling inflation, more QE and perhaps even a modest boost from the London Olympics will lead to improved growth in Britain.
He adds that British consumers have suffered an ‘oil shock’ that’s prevented consumer spending from following the ‘credit impulse’ – which may have otherwise been created by quantitative easing and low interest rates.
However with oil prices now waning he reckons an extra £6 billion worth of consumer spending may be freed up and spent elsewhere over the remainder of 2012.
Evans also points to further stimulus coming from the Bank of England. He believes a further £50 billion of quantities easing (QE) and maybe even a rate cut, could be announced at the next meeting of the monetary policy committee (MPC) on 5 July.
In the meantime he says that Britain’s domestic stocks are inexpensive despite the likes of* Debenhams (LON:DEB)*, *Whitbread (LON:WTB)*, *Talk Talk (LON:TALK)*, *Carpetright (LON:CPR)* and *Ted Baker (LON:TED) *all performing well in the year so far.
He picks out four of Deutsche’s ‘buy’ rated stocks to focus on - *Next (LON:NXT)*, *Barratt Developments (LON:BDEV)*,* Greene King (LON:GNK)* and *William Hill (LON:WMH)*.
Links: Full news story
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