Sula Iron & Gold Ratings

BUY by 3Dimensional on 19 Mar 2014 13:24

Price at rating: 2.99, now:

SULA Tonkolili is a 12.8 billion tonne magnetite deposit in Sierra Leone. Rio Tinto Diversifying Iron Ore Supply To Chinar r Today, 1:23 PMr Using an in ground value for the iron ore we derive an implied valuation for Sula, which assumes completion of a Feasibility Study in 2017. Our NAV of US$241.8 million translates to a fully dilute 28.0 pence per share, which we r use as our target price, initiating coverage with a BUY recommendation.Target 40 pence.

Score: 37.50

BUY by sharing on 14 Mar 2014 11:51

Price at rating: 2.90, now:

rumoured 14p bid African Minerals who are nearby Sular r "The company's recent SRK report values Sula at £23m with a maximum value on its assets of £120m."r r "Should Sula successfully define 15Mt of high quality DSO material then the value would jump towards 5p-10p pretty quickly."r r "Sula Iron assets have turned up some pretty good results so far as they reported their banded iron ore formation (Bif) to be similar to that of the 12Bt neighbouring Tonkolili mine."r r Today's news will seal the future ramp up in both iron and gold operations, from a very modest market cap of £5m coupled to the extremely interesting gold and more importantly iron assets, Sula offer a decent binary bet. We here at ValueTheMarkets present an investment/trade case based on a decent cash to cover position with addition to strong fundamentals.r r Sierra Leone is fast becoming the emerging region of choice as the country's mining infrastructure solidity builds, its been a decade since ex-colonial powers of Great Britain stepped in with the UN to bring an end to the civil unrest. Fast forward a decade and Tewoo's $990m investment for 16.5% on the Tonkolili mine stamps the register of change.r r r African Minerals Ltd Q4 and FY 2013 Production Reportr Share On Facebook Printr Alertr TIDMAMIr r RNS Number : 5248Yr r African Minerals Ltdr r 27 January 2014r r 27 January 2014r r African Minerals Limitedr r ("African Minerals", "AML", or "the Company")r r Q4 and FY 2013 Production Report and Project Updater r African Minerals, the developer and operator of the Tonkolili iron ore mine in Sierra Leone, today reports its Q4 and FY 2013 production results for the period ended 31 December 2013, and a Project Update.r r Highlightsr r -- Q4 sales of 3.8Mt (Q3 FY 2013 : 2.8Mt); FY 2013 sales of 12.1Mt (FY 2012 : 4.1Mt) r -- Focus on the achievement of 20Mtpa sustainable production run rate during 2014, and driving cash costs down to around $30/tr r -- Tewoo Energy Development ("Tewoo") transaction continues to progress r -- Phase II expansion will commence end 2014 r -- First Phase II concentrator expected to be commissioned in 2016 r -- Review of banking arrangements: Standard Bank corporate facility intended to be r repaid and replaced in Q1 2014 with a new corporate facility of longer maturity, and ther r $250m PXF operating company facility has been syndicated in Q4 2013r r -- Preliminary Results to be announced on 31 March 2014 r Frank Timis, Executive Chairman of African Minerals, said:r r "African Minerals has made strong progress during 2013 and especially in Q4 and it is particularly pleasing to see a record nine shipments in the month of December. The Tewoo transaction is continuing to move forward and I look forward to welcoming Tewoo as a partner in the project and a shareholder in the Company during 2014."r r Bernie Pryor, Chief Executive Officer of African Minerals, said:r r "The Tonkolili project finalised its construction only in May 2013, and has been in the process of commissioning and ramping up over the last eight months. We are pleased with how that ramp up has progressed and we look forward to achieving the sustainable 20Mtpa run rate during 2014. I am delighted to confirm the Company achieved its export tonnage guidance for the year, with 12.1Mt being shipped - almost triple the 4.1Mt achieved in 2012. I am confident that during 2014 we will see the project's production stabilise at the 20Mtpa target run rate, with cash costs falling to approximately $30/t. We will provide guidance for FY 2014 production with our Preliminary Results, expected to be released on 31 March 2014.r r The success we have achieved during the past quarter forms the foundation for our next expansion. We expect to be able to achieve a near term low capital cost optimisation and expansion to our infrastructure capacity, and we intend to start the construction of the first of our Phase II saprolite plants at the end of this year, with up to 10Mtpa of final product concentrate processing capability being brought online in 2016, allowing us to extend the life of our DSO operations.r r As ever, the Board remains focused on achieving sustained targeted production rates, a reduction in costs and increased returns to our shareholders."r r SUMMARYr r r Q1 2013 Q2 2013 Q3 2013 Q4 2013 Variance r MINING r Tonnes DSO Ore Mined Mt 2.8 4.6 3.6 5.3 47% r Tonnes Saprolite Ore r Mined Mt 0.5 0.8 1.1 1.1 -5% r Grade DSO Ore Mined % 57.2 57.7 57.5 57.6 0% r Total Mined Mt 3.3 5.4 4.7 6.3 35% r PROCESSING r Tonnes DSO Ore Treated Mt 2.5 4.4 4.0 5.0 26% r Grade DSO Ore Treated % 57.4 57.7 57.1 58.1 2% r Total DSO Produced Mt 2.2 4.0 3.0 3.9 31% r End of Period Product Mt at r Stockpile mine 1.8 2.4 2.3 1.8 r EXPORT r Total Exported (Wet) Mt 2.1 3.4 2.8 3.8 39% r Lump Mt - 0.2 - - r Fines Mt 1.1 0.5 0.1 1.5 r A32 Mt 1.0 1.8 - 0.4 r Blend Mt - 1.0 2.7 1.9 r r Grade % 57.9 58.2 58.0 58.0 0% r Moisture % 10.8 11.1 11.3 11.5 2% r Total Exported (Dry) Mt 1.9 3.1 2.4 3.4 39% r Number of Vessels # 12 20 16 22 38% r End of Period Product Mt at r Stockpile port 0.1 0.0 0.4 0.6 r REVENUES r Period Spot 58% $/t 125 116 111 117 6% r Freight Rate $/t 19 18 20 25 24% r FOB (dry)* $/t 88 78 73 77 6% r Balance Sheet r Group Cash $m 496 501 401 362 r Group Debt $m 780 831 832 830 r ------------------------ ------- --------------- --------------- --------------- --------------- --------- r r *Excluding final invoicing adjustments on sales which have not yet been finally pricedr r SAFETYr r The project recorded eleven lost time injuries in the quarter, up from eight in Q3, and the rolling year to date All Injury Frequency Rate remained steady at 1.45 injuries per 200,000 man hours (Q3 : 1.45).r r However, one of our contractors was involved in an incident that resulted in loss of life at the end of the year. A full formal investigation led by government authorities is underway.r r CORPORATE UPDATEr r Tewoo Transactionr r Further to the announcement dated 26 September 2013, Tewoo and AML are continuing to progress the due diligence process and contractual documentation regarding the proposed strategic investment by Tewoo.r r As part of this process, AML despatched two Cape Size cargoes of iron ore to Tewoo in September and October, and both cargoes have been received, tested and accepted by Tewoo.r r Shandong offtaker r As announced on 20 December 2013, following agreement with our partner, Shandong Iron and Steel Group ("Shandong"), to optimise the project's near term expansion plans rather than proceeding immediately to production of 35Mtpa, the partners have amended the Shandong discounted off-take entitlement so that it is directly linked to the project's annual production capacity. Under the amended terms, deliveries will be 6.5Mtpa in 2014, increasing to 7Mtpa at a project capacity of 25Mtpa and then increasing pro rata up to 10Mtpa at a project capacity of 35Mtpa.r r PRODUCTION UPDATE Q4 2013r r Productionr r The wet season can be described as average in 2013, with the last notable rainfall on 15(th) November. Total precipitation at Pepel was around 2400mm during 2013, and at Tonkolili this was 2466mm, well below the peak of 3250mm experienced at Tonkolili in 2012. However, even though the wet season was relatively benign, the fines stockpiles were not dry enough to be shipped until late November. This timing was later than had originally been expected, and the stockpiling strategy for future years will be amended accordingly.r r Mining movement continued well in Q4, with a record 6.3Mt moved, 5.3Mt of which was DSO and 1.1Mt of saprolite stockpiling for Phase II.r r The process plants together processed 5.0Mt of ore, generating 3.9Mt of product, despite the continued careful operation of the damaged 2.4km long overland conveyor belt ("CV02") on the large wet process plant that was split in Q2.r r Since exports still relied on lump production in November, it was not possible to carry out the planned CV02 belt replacement until December. The belt was successfully replaced over the New Year period, but impacted to some extent production in the last quarter as that plant continued to operate with the damaged belt for longer than previously expected at lower productivity. The belt is now completely replaced and plant productivity is at its expected level.r r Rail productivity continues to improve, with the achievement of seven and eight trains dumping per day, each of 8,000t, through Q4. Remedial work is continuing, principally regarding bridge strengthening and curve flattening, and is expected to allow higher productivity levels to be achieved from Q2 2014.r r Exportsr r Exports for the quarter reached an all-time high, with 22 vessels sailing, which included nine in December, a record calendar month performance to date from the integrated operations.r r The beginning of the quarter was impacted by the availability of dry fines material and, as such the first few weeks relied on exporting lump blend. Once the fines material stockpile became shippable from late November, export productivity levels rose significantly. A peak daily out-loading rate of 71,504t loaded was achieved on 22 December 2013.r r The fourth trans-shipping vessel, MV Argosy, came into operation as planned in early December.r r Salesr r In Q4, 13% of production tonnage was delivered into completing the 4.8Mt Shandong Iron and Steel Group Discounted Offtake Agreement ("DOTA"), compared to 37% of tonnage in Q3.r r Furthermore, 60% of our export tonnage was sold as Lump Blend or A32 in Q4, carrying an additional reprocessing charge. Together, these sales represented the lowest percentage of discounted tonnes that have been sold on a quarterly basis during the year and resulted in better average price realisation.r r The weighted average 58% IODEX Platts index price for the period was $117/t (dry), up slightly from $111/t in the previous quarter, while freight rates increased slightly in the period from an average of $20/t in Q3 to $25/t in Q4.r r The FOB price in Sierra Leone was $77/t (dry), up from $73/t in the previous quarter, as a combined result of the increase in the benchmark price from $111/t to $117/t and a lower proportion of sales into the DOTA (13% vs 37%), principally offset by the rise in freight rate from $20/t to $25/t.r r PROJECT UPDATEr r Infrastructure Capacityr r The optimisation review of the infrastructure capacity and expansion options of the Pepel port and associated rail is in the process of being completed.r r Marine and rail simulations have generated a number of attractive options that require further study. Those options include establishing a Cape anchorage in the shelter of Freetown Harbour near Kissy, the commissioning of new purpose built high capacity trans-shipping vessels, as well as various shiploader upgrade options.r r While the near term expanded infrastructure capacity is currently being finalised, the Company is confident that a medium term integrated export capability increase can be achieved in parallel with the Phase II expansion. The Company expects to commence its Phase II expansion during H2 2014.r r The increase in infrastructure capacity, together with the additional processing capability of the new 9Mtpa A32 1G plant (which will be delivered, constructed, commissioned and ramped up during H1 2014), will allow the Tonkolili project to initially increase exports at low capital cost, with concentrate processing capability being brought online in stages from 2016 as extended life DSO operations are wound down over time.r r This strategy maintains optionality for further expansion while minimising immediate capital requirements and improving free cash flow.r r The Company will shortly be selecting the consultants to carry out the Front End Engineering Design in order to progress the Phase II planning to allow the start of construction at the end of this current year, in line with previous guidance.r r The construction of the pilot plant that will be used to refine the concentrator flowsheet design, with an expected output capacity of up to 10Mtpa, has been completed. That plant is now in operation with an expectation that flowsheet parameters will be decided upon during H1 2014.r r Further detail regarding the scope, capital requirements and schedule of the Phase II expansion will be made available towards the end of the year.r r It is expected that all capital requirements for both the infrastructure and processing expansions will be met by existing restricted project level cash and new project debt facilities.r r Technological Innovationsr r Polymer test workr r Technical innovations are proving successful, and the results to date of polymer tests are positive. We are pleased with the performance to date of polymer tests, and are moving to implement a polymer dosing circuit by mid-year, and the onset of the wet season. This additive increases the Flow Moisture Point of the fines material, allowing the Transportable Moisture Limit to be raised, and thus making it possible to export fines material deeper into the wet season, significantly simplifying wet season planning.r r Intermediate Lump Productr r AML is also evaluating a re-screening strategy that will allow the coarser size fraction (2mm) of the current fines material to be classified as a Group C cargo, which will allow it to be shipped irrespective of moisture content, and once more provide further flexibility for wet season operations.r r FINANCIALr r Corporate Level Debtr r After a review of its corporate debt facilities, AML intends to retire the remaining $37.5m corporate level debt owing to Standard Bank during Q1 2014. AML is in advanced negotiations with another financial institution to arrange a new corporate level debt facility of longer maturity, also in Q1 2014.r r Operating Company Debtr r During Q4 2013 the operating companies drew the remaining $49m remaining of the $250m PXF facility. Standard Bank has now additionally syndicated that loan to a consortium of banks comprising Standard Chartered Bank, Citi, ECOWAS Bank for Investment and Development, British Arab Commercial Bank plc, and BMCE Bank International plc. The successful syndication, and the widening of the lender group, is a positive both for the Company and more broadly for Sierra Leone.r r Balance Sheetr r As at the end of December the Group had drawn principal debt of $830m, and had cash of $362mr r The Company expects that its Preliminary Results will be published on 31 March 2014.

Score: 86.25

BUY by sharing on 03 Mar 2014 13:51

Price at rating: 3.08, now:

Gold miner shares spiked sharply higher as investors scrambled to find safe havens as the crisis in Ukraine worsened.r r Russia’s seizure of Crimea over the weekend and deployment of thousands of troops to the Ukraine province has led to fears of a possible war in the country after the new government in Ukraine’s capital Kiev mobilised its armed forces in responser r Western governments have condemned the Russians and its president Vladimir Putin, but markets are waiting to see what action they take to try both to support the new Ukraine government and also to force the Russians to withdraw.r r Spot gold price jumped US$22 to US$1,344 despite gains for US dollar, which traditionally moves in an opposite direction to the price of the metal.r r Stocks were hit, however, with the Russian stock market dropping 10% at its open and London and other European bourses shedding about 2%.r r The exceptions were the gold miners, with all of the London-listed majors registering good gains with the exception of Russia-focused Petropavlosk (LON:POG).r r The miner was already under pressure from the gold price weakness last year and is seen as exposed to risk the of economic sanctions being introduced on Russia.r r POG shares fell 9% to 84.63p while fellow Russia miner Polyus (LON:POLY) shed 8%.r r The best of the performers were those with operations far way from the Ukraine, where sector leader and FTSE 100 member Randgold Resources (LON:RRS) added 3.8% to 4,922p.r r Mexican silver and gold miner Fresnillo (LON:FRES) edged higher to 955p while African Barrick (LON:ABG), like Randgold also focused on Africa, gained 4.5% to 294p.r r Among the smaller caps, producers fared the best with Philippines-based Medusa (LON:MML) a stand-out with a 12% rise to 125p.r r Greatland Gold plc (LON:GGP) was flat despite analysts talk of a major company update was very close.r Sula Iron & Gold plc ( LON:SULA ) Rose on low volume despite a rumoured funding loan agreement at 5p with an update imminent.r Centamin (LON:CEY) rose by 2% to 56p while Metals Exploration (LON:MTL), also in the Philippines, was 11% higher though it announced a writ against the company had been dismissed.

Score: 22.50

BUY by 3Dimensional on 03 Mar 2014 09:44

Price at rating: 2.90, now:

RUMOURED PLACING 5P

Score: 93.75

BUY by BuyBAO on 02 Mar 2014 22:18

Price at rating: 3.05, now:

Chart looks good

Score: 51.25