Outlook this week through the eyes of publications

After whats been a busy week in work and publications, We look towards the healthier gold price and general sentiment.

Are miners and natural resource stocks feeling less painful or is this just a feeling I'm getting?

This week I caught up with David Lenigas executive chairman of Afriag you can find the story here:
http://www.shareprophets.com/views/1108/afriag-something-brewing

This led to a really interesting Q&A which reveals some staggering facts about the company's Bod, Lenigas link here: http://www.shareprophets.com/views/1137/afriag-qa-with-its-chairman-david-lenigas

After a brief chat to a few associates i respect within the retail i was drawn to Lekoil which I believe to be a early life play with some bumper figures and high profile joint ventures link and piece below

Shares in AIM listed oil junior Lekoil (LEK) are currently trading just off year lows of 35p. You may say that this is not unusual in the current climate but hang on, let’s review what is actually going on here for the company which is now capitalised at £84 million.

The company has just raised funds at 39p - £13.2 million. That announcement last week comes not long after the company raised£32 million on its 17^th at 2013 AIM admission at 40p.

The net proceeds of the latest placing will be used to fund the drilling and testing of the sidetrack well: Ogo-1 ST, on the OPL310 licence offshore Nigeria, as referenced in the announcement dated 26 June 2013, as well as for general working capital purposes.

The Placing will be conducted in two stages, with the First Placing Shares being placed using the Directors' existing authority to allot shares for cash on a non pre-emptive basis, as granted at Lekoil's most recent EGM, and the Second Placing Shares being placed conditionally upon, inter alia, the passing of the Resolutions at the Extraordinary General Meeting to be held on 7 August 2013.

Since the IPO Lekoil has already delivered some pretty cracking drilling news from Ogo-1 where it has drilled to a total measured depth of 10,518ft (10,402ft true vertical depth subsea ("TVDSS")), and has encountered a gross hydrocarbon section of 524ft, with 216ft of apparent stacked, net pay. Lekoil has a 30% economic interest.

Afren, the operator, said that the well was targeting 78 million barrels of oil equivalents (mmboe) of gross P50 (50% chance of recovery) prospective resources, "but based on evidence to date, targeted resources are likely to be significantly in excess of previous estimates".

Lekoil also has a c6.5% interest in another block which is set to commence production in 2015 and where its unrisked reserve is c25 million barrels of oil equivalent.

It strikes me that the asset base, the exploration upside and the strong balance sheet are not discounted in the current share price. It has to be worth a flutter.

- See more at: http://www.shareprophets.com/views/1134/lekoil-a-speculative-buy-at-385p#sthash.DLiIXpIB.dpuf

This was followed up by ADVFN Ofst.com here: http://uk.advfn.com/one-free-share-tip/speculative-buy-lekoil-at-38-5p-says-doc-holiday/662

Having seemingly favoured natural resource this week against last weeks gold my quid buys on Medusa were stopped out tight at 130p. The company seems to be making the noise as is the sector that the down turn in gold is finished and the eventual bull run on gold looking closer by the day.

I'll be looking to collect more gold stocks with tight business stratgies with good production figures and cash costs.

Medusa to me fits the bill so won't be out to long, Keep eyes on VGM,SHG,ORE,NMG,AVM,POG and MML to name a few.

In actual fact I believe that NMG are at a real pivotal point to either slide back or push onwards into a breakout. Eyes on the 21Dsma X 50Dsma and the 50Dsma X 200Dsma golden cross - Buy signal, Rsi still in tact, should that fail then a trip back to 50's is in order for the lesser push towards a bullish trend reversal and confirmation.

You have my usual reminder on Zanaga Iron Ore (Zioc) potential multibagger. Buy today @11p

I'll be writing more over the weekend but to complete this weeks publications we have Aim listed New World Oil - The company has dicked P.I's but the worm had to turn slightly and here is the coverage from 0.55p: http://www.shareprophets.com/views/1115/new-world-oil-speculative-buy-at-055p

As always folks ' Stay grounded and lock in gains ' We are not in the bull market yet...

All the best Doc

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(These are but opinions derived from my own experiences and thoughts and do not adopted as statement of fact)

Patagonia Gold

The Patagonia Gold (PGD) story is not an unusual one in the small cap gold mining sector, however with some mild relief coming from the near $1300 oz price gold stocks have had a minor lift so far. With Patagonia there could be a lot more to come.

Patagonia is something of a mystery to the broker that repeatedly reiterates its 70p target price. In my  humble opinion ( I am not a City broker) the company has performed dreadfully over the past 12 months with the delisting from the TSX, a  stagnant market in juniors, the weaker gold price and the grotesque repricing of options by directors all playing their part.

That options repricing is a total disgrace and exercise in naked greed by a porcine board as you can read here

So why my interest?

Find out here: http://www.shareprophets.com/views/1064/patagonia-gold-a-golden-punt

http://seanbenn.wordpress.com/2013/07/18/patagonia-gold-punt-or-front/


All the best Doc

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Weekend Chatter Vol. V

Good Afternoon folks,

Looking back at the previous weeks bearish remarks towards the gold price it would appear we have some relief and steady stay at $1300 (Ish) Following some dreadful drops in gold stocks it is still my belief that the listed vehicles with a clear strategy,good tangible value and competitive cash cost will perform well.

After a chat to a number of companies on Silvermere Energy its clear that things can't possibly have been as steady going as one would of thought looking at the news flow and quick demise of its project and no doubt soon to be board. I asked Mr Morrison would he like to partake in a Q&A to explain the problems faced by SLME however the jury is still out as to whether he agrees or not as the case maybe.

Sound Oil Announced it had reached TD and the Q&A I did with James can be found here at the shareprophets.com: http://www.shareprophets.com/views/1071/qa-with-james-parsons-of-sound-oil

Initial Buy Rec here (65days ago) - http://www.shareprophets.com/views/377/buy-sound-oil-at-7875p-writes-doc-holiday

The volumes in the aim market are representative of a dull weekend in Blackpool and whilst many grow tied the tenacious of experienced investor/traders are looking to identify the last slap down to the market before the turn in trend. We have no clear signs this has started but general market activity/volume is usually a good laymen rule of thumb.

GKP have jumped up as bottom feeders secured more cheap stock and shorters run a muck from retail investors speculating and conveying their unhappiness towards the BOD and CEO word. Selling 10m shares was never going to go down well.

'' If you smell a turd then usually you see it '' - Re: GKP Sp after the news.

Micro cap - Paternoster Resource pull the trigger again as it went oversold with a rise from 0.28p- 0.4p late last week, Still no firm news although NAV update is due, I don't see any significant reason for it to rise or fall.

Scancell was stupidly over cooked and whilst the news has not been clear to its P.I's its eventual bounce back to 30-40p will fall in line with the minor dilution to support advances in its pipelines toward sale early 2014.

Piri - Are due accounts and from my making they have a bunch of cash and a investment in a shale play, Is this IGAS or NOP (It looks good news either way) Maybe worth a very small speculative punt. (Watch out)

Zioc - The company I have been harping on about for what seems an age! (Potential 10 bagger) watch the media pick up on this over the coming months

Thats it for today but as always back tomorrow (Hopefully with reasoned opinion to validate some of the brief touches on the weekends chatter, Please share, thanks for reading)

All the best Doc

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Sound Oil Q&A with CEO James Parsons

 




Q. 6) James Clearly the Nervesa result pegs Sound Oil on the map now in Italy, Do you have any further comments in regards to the future of Sound Oil and its likely hood to harness its investors with tangible value to couple to its significant upside in Badile,Laura, Zibido and Strombone etc.

So far we have demonstrated that we can deliver at the drillbit – and that is critical for any small cap oil company and will expose our investors to significant upside in Italy. However our strategy is broader than that and includes growth outside of Italy and consolidation with our competitors locally. We are looking to build a European / Mediterranean business of some scale and have a team to deliver that which is a blend of commercial, technical, operational and financial capability. The recipe for success here is a mix of a strong portfolio and a capable team with a clear strategy and high energy action orientation.


James can I take the opportunity to thank you on behalf of myself, Shareprophets.com and the Investors for taking the time out in a busy schedule by projecting a clear vision to your retail shareholders.

Q1-5 subscribe here free: http://www.shareprophets.com/views/1071/qa-with-james-parsons-of-sound-oil



Regards Doc

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Silvermere Energy

What happened to Silvermere Energy?

I must say that I have no axe to grind with any investor,adviser or board member.
I myself invest my own hard earned cash into the market and accept that high risk does what it says on the tin, thankfully i have been around long enough to know when things are looking grim. 

To the retail who are lagging behind let this be a lesson.

Today I had a chat with various associated parties with Silvermere and these are my findings.

Silvermere Energy had a loan note with mineral financial - Mafl announced that it had written the debt down to a 88% loss.

Mafl announced they have a strategy in place to try and recover what value it can for its shareholders.

Dominion announced that it would auction off the asset if silvermere could not stump up the cash to fulfil their financial commitment.

So now we have a default on loan note and also not the cash to fulfil financial commitment to dominion.

So in a few months where did it go wrong?

As previously reported, the flow-test conducted on 15 October 2012 showed flow rates of 155 bopd plus 700,000 scfpd of associated gas, and no water. With the well clean-up still on-going, the optimum commercial flow rates have still to be determined but encouraging operating pressures recorded in the well suggest that commercial production could match or exceed the levels obtained in the flow test

Where is the Oil and Gas?

The company claim that some gas was sold but the rest was used to pressure the network in order to get the oil ashore however due to unforeseen circumstances a technical issue had the oil stuck in the pipeline.

Silvermere seemed to be going well until the extensive clean up dragged on and on and on...         (time to be cautious in my experience)

Silvermere seemed to have put all its eggs in one basket however the company remained optimistic until Q2 2013 at which point Mafl is now trying to recover their loan, Dominion looking for silvermere to fulfil their financial commitments.... '' Use the £5m equity facility i here you say? '' 

Andy Morrison said this on 3rd December - "The SEDA facility is an enabling action that will help to ensure that we have access to future development funding that will put the Company in a stronger position to take advantage of organic and inorganic growth 

Recap Here:

8th January 2013 - With production re-established, the clean-up of the I-1 well will continue and an indication of likely sustainable commercial flow rates is expected to be available after a few weeks of continuous production.

All is looking rosy in the garden of silvermere energy right?

11th January 2013 - "We are grateful for the support from our existing and new shareholders which enables us to continue to build our interests in the Mustang Island field. With the I-1 well now in production and with these new funds in place, the Company is positioned ready for further development".

4th Febuary - Following the previously announced re-opening of the third party transmission line on 07 January 2013, total production and sales of gas recorded during the month were 8,680,000 standard cubic feet (scf). Total production of oil was 1,780 barrels. It is expected that the oil charge of the pipeline will be completed within the next month so that sales and production numbers for oil will begin to converge.

5th March - Total production and sales of gas recorded during the month were 11,477,000 standard cubic feet (scf), an increase of 32% month to month and total production of oil was 1,845 barrels, an increase of 4% month to month (1,912,068 scf and 308 barrels, respectively, net to Silvermere). The well was flowing for 73% of the time in February, representing a significant improvement on the previous month.

15th April - Total production and sales of gas recorded during the month were 883,000 standard cubic feet (scf), and total production of oil was 127 barrels.

Up until the previous update on 5 March 2013 the well continued to experience restricted flow rates due to obstructions in the well-bore. Pipeline operating pressure from platform to shore was reduced in an attempt to improve pressure differentials and flow conditions, but this did not resolve the matter. It was therefore agreed by the partners that a simple work-over should be conducted in order to investigate and remedy the blockages that have extended the clean-up period longer than had been expected.

OKAY A SIMPLE WORK OVER - This would have been around a $100,000 with Slme responsible for around $20,000 costs. All along the foot notes on each Rns stated we are pleased to be, We are encouraged, We are grateful, We are pleased to note etc etc etc....

Then this come the following day 16th April 2013

On 11 January 2013, the Company announced a subscription to raise £371,000. An existing shareholder who subscribed for £80,000 worth of shares has subsequently failed to honour his irrevocable commitment to pay for them despite repeated verbal and written assurances to both the Company and its advisers that such funds were being or had been remitted directly or indirectly to the Company. That subscriber's 1,200,001 subscription shares in the capital of the Company have, however, already been admitted to trading on AIM. Silvermere has accordingly now instructed its lawyers to pursue the defaulting subscriber for the amount owed.

The unpaid subscription commitment has a material effect on the Company's available cash resources such that in the absence of a refinancing it is dependent upon the support of it s directors and creditors. The Company also has an unsecured convertible loan (the "Loan") of £750,000, repayment of which is due by the Company on 1 July 2013. It is now in default of significant outstanding financial commitments on its I-1 Well which could prejudice the Company's interest in the Well, in respect of which it has received a notice of default.

What the hell has happened the company appeared to me selling gas and transferring oil down the pipeline to shore, This pipeline is not like the road to perdition however ended up that way.

When asked the company suggest '' The oil is stuck in the pipe. Now the fiances are in the shit and all the great work of diversifying and securing the financial future whilst going into commercial production was hog wash as the fall from grace become a quick one.

9th May 2013 -  The Company announced on 16 April 2013 that in the absence of a refinancing it was dependent on the support of its directors and creditors. In recent weeks the Board has pursued a number of different funding proposals but the Company has not been able to procure the necessary funding it requires. As such, given the uncertainty around the Company's short term working capital position, the Board has requested that trading in the Company's Ordinary Shares is suspended while it considers the next steps

18th June 2013 - Further to the announcement made on 16 April 2013 with respect to the Company being in default of significant outstanding financial commitments on its I-1 Well, Silvermere announces that it has received a demand notice from Dominion Production Company LLC, the operator of the I-1 Well, for full payment of amounts outstanding to them totalling $229,445.29 on or before 15 July 2013. The demand notice states that if these payment terms are not met then Silvermere's interest in the 818-L Field will be sold by way of a public auction to the highest bidder on 6 August 2013.

The Company remains in discussions with various parties with respect to refinancing the Company and a further announcement will be made as soon as practicable.

Now lets review the initial start of the post, Mineral financial (was Athol) have written down their loan note, coupon and outstanding balance to £40,000 from £600,000 which is a clear indicator that they don't see how the company can continue in its current format or pay its outstanding balance.

Whilst Private Investors are looking to find some resolve by contacting the relevant PR,Coms,Broker,Nomad and Company the universal story is we are still discussing. 

'' Personally I would say that the game is up, However wait in anticipation ''

Why not use the financing facility? Well this facility is a package which is often used on Aim and is based loosely around pre-arranged funding shipped into the market... Clearly the Seda didn't see enough liquidity or the company has another reason why this so called deal ''which enables us to continue to build our interests in the Mustang Island field. With the I-1 well now in production and with these new funds in place, the Company is positioned ready for further development". 

Something wasn't so cut and dry now was it as the asset is up for auction on the 6th, Mafl have wrote down the debt and the company don't seem to have a strategy out of the current position under the current regime.

I have personally asked Andy would he offer some explanation when and if the dreaded event should take place! Stay tuned.......

I don't expect Andy to be involved in the future and I don't expect investors can believe how quickly this has gone from 30p to 1.75p when its actual value now appears to be 5-10% of its current net worth if you take Malf figure of 88% loss on outstanding debt. 

High risk- retailers remember this is high risk speculative stock and this could come to a stock like you should the story not hold up in a troubled arena....

I anticipate broker/nomad and corporate advisers were all paid in full although can't confirm yet. I also quote Lse poster pablo2 here:

Scott Mathieson of Sanlam told me negotiations are still ongoing. It is obviously in all parties' interests for these to come to a useful conclusion. These discussions involve Silvermere with Dominion, MAFL and Other parties. He doesn't see the passing of Dominion's deadline of 15th July as terminal and again stated that as soon as the company has anything definite to announce, it will. -------------------------------------------------- So, it's really 'as you were' and keep everything crossed. July 15th does not mean it's all over.

I beg to differ old boy but hope the company finds some resolve, I now rate the company at 0.0001p

Word in the ear '' Mathieson wouldn't say anything other than that ''

Regards Doc

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Scancell Holdings

The other day Scancell (LSE:SCLP) saw its market value halve as it announced a conditional Firm Placing of 20,000,000 new Ordinary Shares at 22.5 pence each to raise gross funds of approximately £4.5 million. Its new backers are various EIS and VCT funds managed by Calculus Capital. In addition, and in order to provide Qualifying Shareholders with an opportunity to subscribe for new Ordinary Shares at the same price, the Company announced an Open Offer to raise up to a further £2.0 million (before expenses).
The fall looks overdone as the new issue of equity and its value should not have wiped £50m off the market cap. I concede the pricing of the offer may have soured sentiment but that should only be a short term issue.
Why raise cash now? Simple – Scancell was running on a near empty tank and needs to cushion to further validate its technology so that it can secure the best possible sale price later this year.

Continued here:

http://uk.advfn.com/one-free-share-tip/scancell-a-recovery-speculative-buy-at-27p-says-doc-holiday/643

TP 40p

http://www.shareprophets.com/views/1023/scancell-holdings-a-recovery-buy-at-24p

This week I have covered a number of company's and expressed my repelling stance towards the bear calls on gold, needless to say the news broke and the spot price rallied so doom and gloom on the back burner....

After declining the possibility of spreading my wings writing for a well known outlet this week. I still remain intrigued on the outcome of a pending meeting with a company next week that i believe are offering up the right kind of prudent content to help navigate the markets, which would be a contrast to the daily reviews over at my residence the shareprophets.com where the likes of Lucian Miers and Evil lead the charge on the short sell whilst Tom,Dan, Steve and Donald share some fundamental calls.

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All the best


Doc


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Weekend Chatter IV

Andy Murray has won the first set and challenging the second as I write my take on the week's action along with some attributing factors....

This week I wrote a piece on Bowleven, the company has all the hallmarks of a decent play which could quite frankly launch from the current share price! BLVN have upped their game by progressing in Cameroon in a tough market, Simply the company is in a better position operationally yet the share price has swung from 50p-100p-50p area once again.

The piece is here: http://www.shareprophets.com/views/934/buy-bowleven-at-5975p

Whilst speculators and bears bash gold I still remain relatively bullish and have been buying Medusa Mining at around £1 as the upside is clearly huge, Check the shareporphets.com website for opinion.

I'm also going to mention Scancell Holding (SCLP) the company seems to have a great support so would look on a bad shout stop out at 44p however the company's price action seems to suggest 60p initially SCLP have traded successfully above the 200DSMA since Feb 2013 with a brief visit below the 200DSMA as the Rsi wound down before quickly rebounding  upto current level 49.5p

 Scancell has made huge fundamental claims as they look to jockey the company into a sale position. Although speculation on the forums is obscene (Usually Jibba Jabba) I actually like what the company represents and the transparent approach they are taking. More to come on SCLP on clearer technical picture or fundamental change.

I had a great chat with Matt Lofgran of NTOG and will speak more about the company but feel the 0.40p area is a bunch of value going onwards as the company breaks even at Chisholm as they are exploring/drilling and producing.

The link is here: http://www.shareprophets.com/views/846/nostra-terra-worth-a-flutter

In general the retail seem to have pockets of opportunity out in the markets and i believe the shareprophets.com offers well constructed opinion from a robust and dogged roster of writers. (Sign up free today)

Outbound we tip toe along as the natural resource sector is labouring under the cloud of its current cyclical trend which is pointing towards an uplift towards the year end. Its not gone forever as some suggest and the good times will return. But each time there are new dynamic plays to ride like seabiscuit.

Don't be left holding an eternal hope, rather scour the market for undervalued well set up companies trumpeting a genuine tune....

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