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  Gold and Silver boost Randgold, Hochschild, Petropavlovsk and Fresnillo, FTSE 100 gains
Reported by Proactive Investors on Thursday, 29 October 2009 (on October 29, 2009)
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Overview: the Footsie rallied 1% after the US market got off to a fast start, fuelled by today’s GDP update, which showed a 3.5% increase, marking the first quarter of growth in a year and beating analysts’ expectations of a 3.3% increase. The Dow Jones industrial average and the Nasdaq composite both added more than 1%.
Partly nationalised banks Lloyds (LSE: LLOY) and Royal Bank of Scotland (LSE: RBS) emerged atop the leaderboard, recouping most of their recent losses with rallies of 7% and 8% respectively after Lloyds confirmed it was engaged in talks with the authorities about alternatives to participating in the government’s toxic asset protection scheme. Barclays (LSE: BARC) also did well, erasing yesterday’s losses with a gain of 3.4%.
However, energy stocks were lower as oil prices continued their freefall, while Shell (LSE: RDSA) weighed on with a loss of 3% after releasing disappointing quarterly results, which revealed a 73% decline in net profit with the company simultaneously announcing plans to cut 5,000 jobs. Fellow energy giant Eni (NYSE: E, BIT: ENI) said its Q3 profit was down, also slashing its production target to push the sector further down. The largest listed oil company ExxonMobil (NYSE: XOM) released its result later, reporting a 68% profit drop.
BG Group (LSE: BG) joined in with a 1.6% slide. Pharmaceutical company AstraZeneca (LSE: AZN) was the only other FTSE 100 constituent to lose more than 1%.
Commodities
Oil prices improved during the day. December Brent Crude rose to US$77.78/barrel, while US light, sweet crude for December delivery climbed to US$79.55.barrel.
Oil and gas stocks performed well with the exception of Shell (LSE: RDSA) and BG Group (LSE: BG), which declined 3% and 2% respectively.
Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) were in the lead with gains of 2.3%, while Cairn Energy (LSE: CNE) tacked on 1%.
Supermajor BP (LSE: BP) posted a marginal gain.
Most junior energy companies were on the rise.
Kazakhstan operating Max Petroleum (LSE: MXP) led the pack with a gain of almost 10%. Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) gained 7%, while Peru, Colombia and Cuba operating oil and gas explorer and producer Gold Oil (LSE: GOO) and Ukraine focused gas producer, Regal Petroleum (AIM: RPT) both added more than 6%.
Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and North American based explorer Nighthawk Energy (AIM: HAWK) rose 5%. Europe focused oil and gas developer Ascent Resources (AIM: AST) and Iraq and Algeria operating Gulf Keystone Petroleum (AIM: GKP) both climbed 4%.
Miners rise as Gold and Silver recover
Precious metals recovered with Gold and Silver climbing to US$1,044/oz and US$16.63/oz respectively. Platinum reached US$1,331/oz.
Silver miner Fresnillo (LSE: FRES) was the top performer in the sector with a 6% climb. Platinum miner Lonmin (LSE: LMI) followed with a 3.5% advance, while specialty chemicals firm Johnson Matthey (LSE: JMAT) added 2%. Gold producer Randgold Resources (LSE: RRS) tacked on 1.8%.
Yamana Gold (LSE: YAU) went against the tide, sliding 3.3%.
Midcaps also rose. Aquarius Platinum (LSE: AQP) led the pack with a 7% gain, while gold miner Petropavlovsk (LSE: POG) and silver producer Hochschild Mining (LSE: HOC) rose 5.9% and 3% respectively.
Junior miners were mixed.
South American based explorer Mariana Resources (AIM: MARL) emerged as the top performer in the market for a second day in a row, surging 26% after climbing 10% yesterday on an announcement of a gold silver discovery at its Dos Calandrias project in Argentina.
Philippines focused Metals Exploration (AIM: MML) gained 8% after its Runruno gold-molybdenum project was endorsed by Philippines President.
Uzbekistan focused gold miner Oxus Gold (AIM: OXS), Canada based junior gold developer Rambler Metals and Mining Plc (AIM: RMM) and Tajikistan operating gold miner Kryso Resources (AIM: KYS) all added almost 5%.
Kazakhstan operating gold producer and copper developer Frontier Mining (AIM: FML) and South Africa focused emerging platinum producer Platmin (AIM: PPN) went in a different direction, sliding 5.5% and 4.5% respectively.
Copper and nickel recover
Copper and Nickel built on earlier gains, advancing to US$2.98/pound and US$8.36/pound respectively. Zinc recaptured the US$1/poound mark.
Base metals focused miners were on the rise on Thursday. Xstrata (LSE: XTA) led with a 6.7% climb, while Kazakhmys (LSE: KAZ) and Anglo American (LSE: AAL) followed, advancing 5.5%. Antofagasta (LSE: ANTO), Rio Tinto (LSE: RIO) and Vedanta Resources (LSE: VED) added 4%, as did Eurasian Natural Resources (LSE: ENRC).
The world’s largest miner BHP Billiton (LSE: BLT) gained 2.5%.
London's only listed pure iron ore producer and FTSE 250 constituent, Ferrexpo (LSE: FXPO) also was in demand, tacking on more than 4%.
Juniors mostly fell.
South American focused junior miner Herencia Resources (AIM: HER) was at the bottom of the pile with a 16% loss, while specialty minerals exploration and development company Thor Mining (AIM: THR) came close with a 12.5% slide.
Botswana operating nickel and copper miner Discovery Metals (AIM: DME) lost 7%, while cement operator Prosperity Mineral Holdings (AIM: PMHL), Tunisia focused metal miner Maghreb Minerals (AIM: MMS) and Laterite nickel specialist European Nickel (AIM: ENK) shed more than 5%.
Banks, insurance, private equity
Lloyds (LSE: LLOY) and RBS (LSE: RBS) were in the lead with gains of 7% and 8% respectively. Barclays (LSE: BARC) tacked on 4%.
Standard Chartered (LSE: STAN) advanced 2.8%, while HSBC (LSE: HSBA) gained 1.5%.
Insurers also were on the rise. Prudential (LSE: PRU) led the way with a 5% climb, while Old Mutual (LSE: OML) and Legal & General (LSE: LGEN) followed with gains of 4% and 2% respectively. RSA Insurance Group (LSE: RSA) improved 1.5%, as did Friends Provident (LSE: FP).
Aviva (LSE: AV) went against the tide, posting marginal losses. Standard Life (LSE: SL) also fell slightly. Private equity group 3i (LSE: III) rose marginally.
Large and Mid Cap News
Yellow pages directory publisher and FTSE 250 constituent Yell Group (LSE: YELL) has decided to further extend the deadline for its lenders to respond to its restructuring proposals by another day to 5 PM Thursday, which is the third extension.
Royal Dutch Shell (LSE: RDSB) reported this morning that third quarter profitability had fallen sharply compared to 2008 when oil prices were significantly higher. Shell’s earnings were reduced by around 70% on a current cost of supplies (CCS) basis, to US$3 billion compared to US$10.9 billion a year ago. Net capital investment for the quarter was $7.4 billion. Total dividends paid to shareholders during Q3 were $2.7bn. Gearing was 13.7% at the end of the quarter and Cash flow from operating activities for Q3 was $7.3bn.
National Express (LSE: NEX) said this morning that it does not intend to explore the possibility of a combination with Stagecoach Group (‘Stagecoach’)(LSE: SCG). The company has been subject to several protracted discussions with several parties in recent months as it has explored options to reduce debt and maintain compliance with its banking covenants beyond December 2009.
Small Cap News
Norcon PLC (AIM: NCON), a specialist in project management and outsourcing in the telecommunications, defence and IT sectors, said it has signed a two year contract extension with the UAE Armed Forces.
Shares in wireless technology specialist CSR (LSE: CSR) jumped 6% this morning after the Company reported third quarter results which showed a return to profitability. During the period CSR achieved revenues of $210 million and an 86% improvement in operating profits to $10.6 million, compared to a $26.3 million loss last quarter. The performance included strong revenues from both the Bluetooth and GPS division of $150.4m and $59.5m respectively.
Metals Exploration PLC (AIM: MTL) said the Financial and Technical Assistance Agreement (FTAA) for the Runruno gold-molybdenum project on the island of Luzon in the northern Philippines has been signed by order of President Macapagal-Arroyo, thus upgrading the project from its previous exploration permit status.
Electronic components manufacturer Acal (LSE: ACL) has agreed to acquire specialist distributor of electronic and photonic components BFi OPTiLAS for €10 in cash and 2 million ordinary shares.
Ambrian Capital issued a note on African focused nickel and gold exploration and development junior Nyota Minerals (AIM, ASX: NYO), lifting its rating on the stock to ‘BUY’ from ‘Speculative Buy’ following a site visit to the Tulu Kapi gold project in western Ethiopia this month. It has an initial price target of 11.4 pence a share, a significant upside compared to the current level of around 6.88p.
London listed Brulines Group (LSE: BRU) announced today a partnership with Greene King Pub Partners for the roll out of its real time monitoring systems for Greene’s 1,400 pubs throughout the United Kingdom beginning first quarter 2010.
Southern African resource company North River Resources (AIM: NRRP) has raised £7 million to fund the exploration and development of its assets in southern Africa, advancing towards its goal of assembling a portfolio of multi-commodity assets with mid-term production potential.
Norseman Gold (AIM & ASX: NGL) has approved the commencement of the OK Decline, the third mine at its flagship Norseman Gold Project in Western Australia, leading it to upgrade its full year production forecast to between 80,000 and 85,000 oz of gold from the previous guidance of 75,000 to 80,000 oz.
Animal feed and health products manufacturer Eco Animal Health Group (AIM: EAH) said the European Medicine Agency (EMEA) approval for a new concentrated form of its Aivlosin oral powder for pigs throughout Europe, helping it establish a footing in major pig markets such as Germany and Denmark, where oral powders are used in preference to licensed premixes.
Poundstretcher retail chain owner, Instore Plc (AIM: INST), announced first half interim results this morning, reporting a loss before taxation of £3.7 million.
Goldplat PLC (AIM: GDP) said London-based Slater Investments Ltd last week acquired 6 million shares in the company and thus holds 5.37 percent of the issued share capital.
Dubai headquartered hotel and resort acquisition and development company Kingdom Hotel Investments (LSE, NASDAQ Dubai: KHI) said revenues per available room (RevPAR) for the third quarter slid 9%, which it said was in line with general market trends.
Hightex Group plc (AIM: HTIG) announced that it has been awarded its largest contract to date - worth €18.9 million - to supply the membrane roof and cable system for the Olympic Stadium in Kiev, Ukraine. The new roof is part of the ongoing redevelopment of the Kiev stadium for the UEFA 2012 Euro football championships.
Strategic Natural Resources PLC (AIM: SNRP) reported results for the first half to August 31 2009, saying it has achieved its first revenues from sales of coal extracted under its mining right for test marketing purposes during the period which saw continuing investment in drilling and mine development.
Sinclair Pharma PLC (LSE: SPH) said it has entered into new debt facilities over £9 million plus a £3 million facility to replace Sinclair's existing facility, which means the proposed equity fundraising announced on October 12 2009 will be scaled back, as planned, to £18 million from the maximum of £25 million announced.
Financial services group and FTSE 250 constituent Evolution Group (LSE: EVG) said it expected its full year profit to exceed market forecasts as trading remained strong across all of its businesses.
Thor Mining (AIM: THR) said an independent re-optimisation in the first quarter the new financial year has marginally upgraded the resource model of its flagship molybdenum/tungsten project Molyhil, but further deterioration in the molybdenum price and the Australian dollar exchange rate against the US currency over the period renders the development of Molyhil uneconomic in the current economic climate.
Edison Investment Research said Africa focused conglomerate Lonrho (AIM: LONR) was in good position to benefit from the accelerating economic growth in Africa with investments in five different areas, however it needed to secure enough funds to support its plans in the continent, which could prove a challenge.
Lithic Metals and Energy Ltd (AIM: LMY) announced its intention to acquire all of the issued shares in privately owned Amber Petroleum Ltd. The acquisition valued at £9.48m will constitute a reverse takeover pursuant to the AIM Rules. Upon completion of the transaction the newly formed company will change its name to AfNat Resources Ltd.
Machine to machine (M2M) communications specialist Telit Communications (AIM: TCM) has no intention to reduce R&D (research and development) spending despite the current market trends, which see M2M manufacturers cut costs to remain profitable in a weakening market.
Precious and base metals group Landore Resources Ltd (AIM: LND) said it is placing 7.86 million new shares at 14 pence a share to raise approximately £1.1 million before expenses and is planning to use the money to finance working capital and exploration expenditure. Landore raised the capital without the assistance of a broker, underlying the company's strong shareholder base and contacts, and avoiding brokerage fees.
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