Despite continued violence in Bahrain and an increase in Chinese interest rates to curb inflation, the FTSE 100 ended only marginally down at 6,083, a decline of 4 points giving a 20 point or 0.3% rise over the week. The Dow Jones Industrial Average rose 73 points, or 0.6%, to 12,391 its highest close for two and a half years.The Nasdaq rose 2, to 2,834, its highest close since October 31, 2007.
Violence is escalating in Bahrain between Sunni Muslim rulers and its Shiite majority population. Though ICE Brent for April was slightly lower at $102.52, after trading from $100.73 to $103.50. WTI U.S. crude finished at $86, down 0.2%.
Despite a strong oil price this week, the Contrarian Investor UK portfolio has suffered a second week of weakness. Its been a week of selling as I have de-leveraged on Xcite Energy (XEL) and sold my stake in Angel Mining.
Xcite Energy (XEL) - Xcite lost 29p or nearly 8% this week to finish at 353p as rumours continue to grow of a fund raising at around 350p to accompany the CPR (Competent Persons Report) which will move contingent resources to proven reserves and allow field development to begin. Though the CPR is expected to be positive, giving reserves of 225-250 million barrels of oil for the Bentley field, at least £200 million in shares is likely to be placed with institutions. With the price spiking to close to 400p last week on takeover rumours and with the likelihood of share price weakness, I took the opportunity to sell some of the holding to allow funds for acquisitions of other shares in the case of a market fall.
Bowleven (BLVN) - Bowleven dropped yet another 3.2% this week with news from the Sapele 1 side track several weeks away. At 318p, this appears bargain basement given the resources already discovered in Cameroon but sales by the BT Pension fund have helped move down the price. Frustrating given the upside potential in this share and it is now 9p below the last placing in October 2010.
Rockhopper (RKH) - Rockhopper dropped another 5% this week with the impact of the market disappointment from the 14/10-3 North Falklands basin well still being felt. The spudding of 14/10-4 which is much closer to the SeaLion discovery is due any day. On fundamentals Rockhopper now looks very cheap. Its market capitalisation of £682 million, means that with £200 million in the bank deducted, Sea Lion's 170 million barrels are valued at just over $4 a barrel with no upside whatsoever. 14/10-3 is likely to add 40 million barrels to the discovery alone. Painful to be down on this one, but I believe patience will be rewarded and buyers will return with 7 wells yet to be drilled and a high COS (probability of success) on the new well.
Angel Mining (ANGM) - I lost patience with Angel Mining after we went into the 3rd week of February with no news from their Nalulaq gold mine. In my view no news is bad news, so I sold. Good long term prospects but things are very tight on cash flow and the last thing investors need is a cash call or increase in the SEDA (equity drawdown agreement).
Weatherly International (WTI) - Good to see copper miner Weatherly bounce on Friday to 12.4p (but still 5% down on the week) on news that Blackrock Smaller Companies has built a 7% share. This doesn't surprise since the constantly widening spread seemed to indicate the the market makers were playing some sort of game to accomodate some large block buys. Its good to see Blackrock involved to a greater extent a long with Gartmore as production ramps up in this really exciting Namibian copper company. I am sure that we won't be seeing 12p for long with Copper at record highs and so much news to come from WTI in the coming months. I put a big slug into my SIPP pension plan earlier in the week because the risk/reward was excellent at less than 12p.
Showing posts with label Angel Mining. Show all posts
Showing posts with label Angel Mining. Show all posts
Saturday, February 19, 2011
Tuesday, February 15, 2011
Angel Mining sold today after 2 day rise
I took the decision today to sell Greenland gold producer, Angel Mining (ANGM), given I was expecting some confirmation of the first shipment of gold dore by now from the Nanulaq mine. The price has risen over the last 2 sessions on rumours that news is imminent but I was spooked by the fact that it could be smokescreen for a delay so I have sold. I am reluctant to invest in companies that do not keep their shareholders fully informed of events and are constantly issuing new shares to maintain operations. It may be the Angel will issue an RNS tomorrow or by the end of the week but so be it. Its a great long term play with a good story both from its gold mine but also its Black Angel zinc prospect, but I'll stay on the sidelines for a little time and see what happens.
Monday, February 14, 2011
Bad day at the office for Contrarian portfolio
Hmmm i've had better days! Every stock is down in the Contrarian Investor UK portfolio apart from Rockhopper (after a shocker on Friday) and Angel Mining, so its a case of taking the pain for today. Xcite is recovering from a sharp dive this morning that made no sense at all but it's still down 4%. Bowleven can't stop falling and Sirius has a 10% fall after its poor RNS regarding its Chinese Adavale project partnership.
It's sometimes about courage in your convictions when the portfolio takes a tumble. I have faith that research is correct on all my holdings and that they are all worth much more than today's share price action indicates. Its about taking the rough with the smooth in this game! This is what being a true Contarian investor is about and on some days it can be uncomfortable! Sometimes it takes more than a few days for a trade to come good, but inevitably they will with patience - this game is not about luck or gambling its about "buy and research" then do even more research (and don't believe everything you read on a bulletin board or even a blog!!).
It's sometimes about courage in your convictions when the portfolio takes a tumble. I have faith that research is correct on all my holdings and that they are all worth much more than today's share price action indicates. Its about taking the rough with the smooth in this game! This is what being a true Contarian investor is about and on some days it can be uncomfortable! Sometimes it takes more than a few days for a trade to come good, but inevitably they will with patience - this game is not about luck or gambling its about "buy and research" then do even more research (and don't believe everything you read on a bulletin board or even a blog!!).
Saturday, February 5, 2011
Portfolio review of the week - 5th February 2011
The Dow Jones Industrials ended the week up 2.3% after a 30 point rise on Friday to 12,092 and the FTSE 100 closed the week at 5,997, a rise of 2% for the week.
A mixed non-farm payroll jobs report yesterday gave the markets confidence that the U.S. Federal Reserve would not move quickly to raise interest rate or curtail the quantitative easing programme where it creates money to buy government bonds and other financial assets, in order to increase the supply of money in the economy. Since early 2009 the U.S. government has spent or committed $2.3 trillion dollars to this programme. The theory is that by buying bonds and taking them off the market, the Federal Reserve pushes up their prices and push down their yields which mean lower interest rates for borrowers and encourages spending. In addition, it encourages investors into stocks and corporate bonds which offer higher returns than government bonds and hence it is generally good for investors. The downside of the programme is that it creates inflationary pressure in the economy since in effect the central bank is printing money. The Bank of England has also spent £200 billion on quantitative easing.
On the Contrarian Investor UK portfolio front its been a relatively stable week with just a couple of small additional purchases in Rockhopper Exploration (RKH).
Xcite Energy (XEL) - Xcite finished at £3.62, after a 6p rise on Friday but down 8p for the week. The revised rig deadline of February 11th is now the focus with the speculation behind the delays in signing with British American offshore for the Rowan Norway Jack-up rig intensifying. I agree with the view that it is strange that that the contract signing has been delayed for the second time when the cost and specification of Rowan Norway have been known for so long. I am sure there is something underlying this further postponement - either waiting for early visibility of the CPR (Competent persons report) which will move oil resources to official reserves which is due for publication late February or early March, or a farm in deal or even takeover with a third party. It would be very surprising if the weeks of extra delays are just due to lawyers bickering about contractual terms. t is also interesting that Xcite called on the SEDA (Standby equity drawdown agreement) for an additional £5 million this week, is this drawdown needed for the rig? With February 11th not aware, all will become clearer this week.
Bowleven (BLVN) - Cameroon oil explorer Bowleven had a better day yesterday with a 2.3% rise to £3.57 giving a flat week. No news to report on this one but the Sapele 1 drill update cannot be far away.
Rockhopper (RKH) - A 5% rise on the week but no leaks at all from the progress of the 14/10-3 North Falklands basin well. It's a case of watch and wait.
Weatherly International (WTI), Sirius Minerals, (SXX) Angel Mining (ANGM) -Again nothing to report but I am surprised that an update on gold shipping has not been forthcoming from Angel given it was expected in January. A reasonable 4% rise on WTI as we await further news on the listing of CAR (China Africa Resources) on AIM which is due in April and which WTI shareholders will get an automatic holding.
Next step should be more interesting on the RNS front, potentially we have - Xcite Energy (rig news), Angel (gold shipment update), Bowleven (Sapele 1 update) and most importantly Rockhopper (14/10-3 well update). Hopefully more to write about next week!
Imagination Tech (IMG) - Unfortunately this fell through a stop loss and position closed.
A mixed non-farm payroll jobs report yesterday gave the markets confidence that the U.S. Federal Reserve would not move quickly to raise interest rate or curtail the quantitative easing programme where it creates money to buy government bonds and other financial assets, in order to increase the supply of money in the economy. Since early 2009 the U.S. government has spent or committed $2.3 trillion dollars to this programme. The theory is that by buying bonds and taking them off the market, the Federal Reserve pushes up their prices and push down their yields which mean lower interest rates for borrowers and encourages spending. In addition, it encourages investors into stocks and corporate bonds which offer higher returns than government bonds and hence it is generally good for investors. The downside of the programme is that it creates inflationary pressure in the economy since in effect the central bank is printing money. The Bank of England has also spent £200 billion on quantitative easing.
On the Contrarian Investor UK portfolio front its been a relatively stable week with just a couple of small additional purchases in Rockhopper Exploration (RKH).
Xcite Energy (XEL) - Xcite finished at £3.62, after a 6p rise on Friday but down 8p for the week. The revised rig deadline of February 11th is now the focus with the speculation behind the delays in signing with British American offshore for the Rowan Norway Jack-up rig intensifying. I agree with the view that it is strange that that the contract signing has been delayed for the second time when the cost and specification of Rowan Norway have been known for so long. I am sure there is something underlying this further postponement - either waiting for early visibility of the CPR (Competent persons report) which will move oil resources to official reserves which is due for publication late February or early March, or a farm in deal or even takeover with a third party. It would be very surprising if the weeks of extra delays are just due to lawyers bickering about contractual terms. t is also interesting that Xcite called on the SEDA (Standby equity drawdown agreement) for an additional £5 million this week, is this drawdown needed for the rig? With February 11th not aware, all will become clearer this week.
Bowleven (BLVN) - Cameroon oil explorer Bowleven had a better day yesterday with a 2.3% rise to £3.57 giving a flat week. No news to report on this one but the Sapele 1 drill update cannot be far away.
Rockhopper (RKH) - A 5% rise on the week but no leaks at all from the progress of the 14/10-3 North Falklands basin well. It's a case of watch and wait.
Weatherly International (WTI), Sirius Minerals, (SXX) Angel Mining (ANGM) -Again nothing to report but I am surprised that an update on gold shipping has not been forthcoming from Angel given it was expected in January. A reasonable 4% rise on WTI as we await further news on the listing of CAR (China Africa Resources) on AIM which is due in April and which WTI shareholders will get an automatic holding.
Next step should be more interesting on the RNS front, potentially we have - Xcite Energy (rig news), Angel (gold shipment update), Bowleven (Sapele 1 update) and most importantly Rockhopper (14/10-3 well update). Hopefully more to write about next week!
Imagination Tech (IMG) - Unfortunately this fell through a stop loss and position closed.
Sunday, January 30, 2011
Portfolio review of the week - 30th January 2011
Rioting in Egypt over the rule of President Hosni Mubarek sent shares down on Friday with the Dow Jones Industrial Average down 166 points, or 1.39%, to 11,823 (the biggest drop since November 16th 2010) The Dow fell 0.4% on the week, its first weekly drop in nine weeks. The FTSE 100 index dropped 1.4% to end at 5,88, a 0.25% drop on the week.
The issues in Egypt drove up oil by 5% to $89 (see previous post: http://contrarianinvestoruk.blogspot.com/2011/01/oil-surges-on-egypt-issues.html) and sentiment in the U.K. wasn't helped by news that a U.K. consumer confidence index dropped eight points in January to -29, the lowest figure since March 2009 and only the sixth time in 35 years it has dropped by so much. Despite the oil price surge, oil stocks were mainly in the red.
The fall in the markets was overdue since after 8 weeks of rises on the U.S. markets, a correction was to be expected and the Egyptian situation was the catalyst for a sell off and profit taking. Further volatility can be expected this week and at times like this opportunities for buying can be excellent as uncertainty and the bears take hold of sentiment. 2011 will be a volatile year in the markets.
The issues in Egypt drove up oil by 5% to $89 (see previous post: http://contrarianinvestoruk.blogspot.com/2011/01/oil-surges-on-egypt-issues.html) and sentiment in the U.K. wasn't helped by news that a U.K. consumer confidence index dropped eight points in January to -29, the lowest figure since March 2009 and only the sixth time in 35 years it has dropped by so much. Despite the oil price surge, oil stocks were mainly in the red.
The fall in the markets was overdue since after 8 weeks of rises on the U.S. markets, a correction was to be expected and the Egyptian situation was the catalyst for a sell off and profit taking. Further volatility can be expected this week and at times like this opportunities for buying can be excellent as uncertainty and the bears take hold of sentiment. 2011 will be a volatile year in the markets.
There has only been once change in the portfolio this week with the addition of Namibian copper miner, Weatherly International (WTI) (see post - http://contrarianinvestoruk.blogspot.com/2011/01/weatherly-international-namibian-copper.html).
Xcite Energy (XEL): It was good to see Xcite rising on Thursday and Friday after drifting for some many weeks following the oilbarrel.com presentation, finishing at £3.71. Given the market environment at the tail end of last week and general negative oil company sentiment it was reassuring to see a rise. There has been lots of rumours doing the rounds about Xcite this week, with FT Alphaville claiming that it was in takeover talks. The deadline for the rig signing is tomorrow and I am surprised they have left it to the wire. Director of Business Development, Charles Lucas-Clements said at the Oilbarrel conference that investors should not be worried and that the deal would be done but why wait until the 31st? Although I have dismissed the takeover rumours as just that, rumours, it does seem strange and as Lucas-Clements said at Oilbarrel, "don't sell you will see this share double or triple". Perhaps he was referring to February 2011 not a later date on a bid? I guess we'll find out soon enough! Hopefully an RNS tomorrow morning to explain what's happening. Even if a takeover is nonsense then news that they have got the Rowan Stavanger, instead of Rowan Norway, until Talisman Norway need it would be fabulous as production timings would be accelerated. If the Competent Person's report is due in February it would also be good to get an update on progress.
Bowleven (BLVN) - Wild oscillations in the share price this week with the price dropping to 330p on Thursday before rebounding to finish at 355p. News that JP Morgan had offloaded some of their stake and a feeling that this seller was out of the way took the pressure off. I am still surprised that the share price has dropped quite so much with so much good news from Cameroon but market sentiment is not as rosy as it was a few weeks ago.
Rockhopper (RKH) - Little change as the rumour mill starts on progress at the 14/10-3 exploration well. News likely later in the week. Frankly there's so much rubbish on the bulletin boards on RKH I can't even face ploughing through them!
Sirius Exploration (SXX) - A sharp sell off this week after the news from the North Dakota exploration drill (see post - http://contrarianinvestoruk.blogspot.com/2011/01/todays-sirius-minerals-action-is-par.html). The shares dropped 17% to 17.25p. I continue to hold for the reason's cited in the post above.
Imagination technology (IMG) - A 4% drop this week to 368p on no news. I continue to hold but may be one to cull this week as now close to 10% below my buy point.
Angel Mining (ANGM) - We still await the news of the dore shipment for the Nalunaq mine which was promised in January. Time running out? - news on Monday perhaps or another delay?
Monday, January 24, 2011
Potentially exciting week of news on portfolio
Lots of potential news due any day on the Contrarian Investor portfolio. As a reminder:
1. Angel Mining (ANGM) - 1st gold pour and shipment from Greenland's Nanulaq mine
2. Xcite Energy (XEL) - Signing of agreement for Rowan Norway jack up rig
3. Rockhopper (RKH) - news from 14/10-3 well on its PL032 licence in the North Falkland Basin
4. Bowleven (BLVN) - update from Cameroon Sapele 1 well.
Plus early to mid-February
1. Xcite Energy (XEL)- upgrade of resources to reserves on Bentley (200 million Plus)
2. Sirius Minerals (SXX) - update from Queensland Australia seismics and Sino-Agri Chinese deal
3. Imagination Technology (IMG) - confirmation from Apple on IPAD2 and Iphone 5 spec
1. Angel Mining (ANGM) - 1st gold pour and shipment from Greenland's Nanulaq mine
2. Xcite Energy (XEL) - Signing of agreement for Rowan Norway jack up rig
3. Rockhopper (RKH) - news from 14/10-3 well on its PL032 licence in the North Falkland Basin
4. Bowleven (BLVN) - update from Cameroon Sapele 1 well.
Plus early to mid-February
1. Xcite Energy (XEL)- upgrade of resources to reserves on Bentley (200 million Plus)
2. Sirius Minerals (SXX) - update from Queensland Australia seismics and Sino-Agri Chinese deal
3. Imagination Technology (IMG) - confirmation from Apple on IPAD2 and Iphone 5 spec
Portfolio getting a pasting this morning
After some nice gains on Friday driven by Xcite, Bowleven and Sirius, all are down this morning. Sirius is down around 11 percent today after the North Dakota results were no more than in line with expectations and profit takers have moved in selling on the news. Profit now gone on Sirius but I've promised myself I'll avoid trading this one too much since it's more of a medium term play i.e. turn off the computer and check the price in 6 months rather than buying in and out on RNS releases. Angel Mining is up at least. At last! Still waiting on Xcite which has drifted down a couple of pence. Patience will be rewarded .
I couldn't resist buying into Rockhopper (RKH) in a small way this morning. Drilling news due in next week or so in the North Falklands basin. Was hoping for 350p, but at 360p a reasonable entry point. A gamble but only a bit on the table and nothing wrong with a bit of adrenaline!
I couldn't resist buying into Rockhopper (RKH) in a small way this morning. Drilling news due in next week or so in the North Falklands basin. Was hoping for 350p, but at 360p a reasonable entry point. A gamble but only a bit on the table and nothing wrong with a bit of adrenaline!
Saturday, January 22, 2011
Portfolio review of the week - 22nd January 2011
A great deal of volatility in the market to contend with this week but this threw up some good top-up opportunities, particularly in Bowleven (BLVN) and Sirius Minerals (SXX).
Xcite Energy (XEL): After testing 350p early in the week on low volumes, Xcite had a positive move on Thursday and Friday to finish at 368p. There seems to be a very consistent retrace pattern with this company, with the share price dropping by small amounts for several days before stabilising and then starting a move up, presumably instigated by the market makers. Still looking forward to the rig contract signing news and which one by January 31st - Rowan Norway or Rowan Stavanger. The company have signed a Letter of Intent on the Norway but given a cancellation of a contract with BP on the Stavanger which is already built (Norway would not be ready until October), this could offer great opportunities to start production far earlier in the Bentley field. All conjecture of course, but sounds like a credible alternative. Nice rumour anyway. (POST POST NOTE: See http://contrarianinvestoruk.blogspot.com/2011/01/xcite-rumour-dispelled-rowan-stavanger.html). I'm looking forward to a very profitable few weeks on Xcite - the share price should be a lot higher than £3.68 on a field of at least 200 million barrels.
Sirius Minerals (SXX): A major announcement this week with the purchase of NE England potash company, York Potash for £25 million in shares and a management restructuring with Chris Fraser (York's founder) taking over as Sirius's new CEO and MD.
A JORC Exploration Target of between 3.3 and 6 Billion tonnes of 67% to 94% polyhalite and 330 to 400 million tonnes of 35%-40% potassium chloride has been established for the currently contracted area within the York Potash Project. This estimate establishes the project as having one of the world's largest deposits of polyhalite at mineable depth.
The shares have had a good run this week, rising 4p or 24% to 20.75p on the York Potash and director buys. I took the opportunity to buy more on the fall during Thursday, since significant news from the company's North Dakota exploration project is expected mid-February which will make 20p look like a bargain. It is amazing to think that Sirius was 3p or so in August 2010.
Bowleven (BLVN) - Finally a rise in Bowleven's shares on Friday with a 3% increase to 380p. All week the shares have been drifting down as investors wait for further updates from the Sapele 1 well in Cameroon. Early Friday, with the share price down again, I took the plunge and bought more shares. With estimates of oil in place already at 65 to 430 million barrels in the Deep Omicron, mean 217 million barrels this company has great prospects for the future.
Imagination technology (IMG) - I have initiated a position this week on the rumours that the Ipad 2 and Iphone 5 will use IMG chips. Unfortunately this is showing a loss currently but Goldman Sachs issued a broker note this week with a £6 target, currently the shares are £3.84.
Angel Mining (ANGM): A poor week for Angel with the share price drifting down to 5.75p. News of the first gold production from the company's Nanulaq mine is due this month (and hopefully it is positive) as well as an update on progress of preparing the Black Angel zinc/lead mine also in Greenland. "To minimise transport and refining costs, the Company will only ship doré once it has produced an optimal quantity. The first shipment of doré for refining is expected to take place in January 2011" RNS 15th December. Did a couple of buys and sells on this one, but still holding a position at 5.8p.
Overall a good week for the portfolio, with Sirius being the star. I reckon Xcite should be the big mover next week, followed perhaps by Angel on some Nanulaq mine news. The Contrarian Investor UK portfolio has had a nice start to 2011, with a profit edging towards £7000 already because of gains on Bowleven and Xcite earlier in January.
Xcite Energy (XEL): After testing 350p early in the week on low volumes, Xcite had a positive move on Thursday and Friday to finish at 368p. There seems to be a very consistent retrace pattern with this company, with the share price dropping by small amounts for several days before stabilising and then starting a move up, presumably instigated by the market makers. Still looking forward to the rig contract signing news and which one by January 31st - Rowan Norway or Rowan Stavanger. The company have signed a Letter of Intent on the Norway but given a cancellation of a contract with BP on the Stavanger which is already built (Norway would not be ready until October), this could offer great opportunities to start production far earlier in the Bentley field. All conjecture of course, but sounds like a credible alternative. Nice rumour anyway. (POST POST NOTE: See http://contrarianinvestoruk.blogspot.com/2011/01/xcite-rumour-dispelled-rowan-stavanger.html). I'm looking forward to a very profitable few weeks on Xcite - the share price should be a lot higher than £3.68 on a field of at least 200 million barrels.
Sirius Minerals (SXX): A major announcement this week with the purchase of NE England potash company, York Potash for £25 million in shares and a management restructuring with Chris Fraser (York's founder) taking over as Sirius's new CEO and MD.
A JORC Exploration Target of between 3.3 and 6 Billion tonnes of 67% to 94% polyhalite and 330 to 400 million tonnes of 35%-40% potassium chloride has been established for the currently contracted area within the York Potash Project. This estimate establishes the project as having one of the world's largest deposits of polyhalite at mineable depth.
The shares have had a good run this week, rising 4p or 24% to 20.75p on the York Potash and director buys. I took the opportunity to buy more on the fall during Thursday, since significant news from the company's North Dakota exploration project is expected mid-February which will make 20p look like a bargain. It is amazing to think that Sirius was 3p or so in August 2010.
Bowleven (BLVN) - Finally a rise in Bowleven's shares on Friday with a 3% increase to 380p. All week the shares have been drifting down as investors wait for further updates from the Sapele 1 well in Cameroon. Early Friday, with the share price down again, I took the plunge and bought more shares. With estimates of oil in place already at 65 to 430 million barrels in the Deep Omicron, mean 217 million barrels this company has great prospects for the future.
Imagination technology (IMG) - I have initiated a position this week on the rumours that the Ipad 2 and Iphone 5 will use IMG chips. Unfortunately this is showing a loss currently but Goldman Sachs issued a broker note this week with a £6 target, currently the shares are £3.84.
Angel Mining (ANGM): A poor week for Angel with the share price drifting down to 5.75p. News of the first gold production from the company's Nanulaq mine is due this month (and hopefully it is positive) as well as an update on progress of preparing the Black Angel zinc/lead mine also in Greenland. "To minimise transport and refining costs, the Company will only ship doré once it has produced an optimal quantity. The first shipment of doré for refining is expected to take place in January 2011" RNS 15th December. Did a couple of buys and sells on this one, but still holding a position at 5.8p.
Overall a good week for the portfolio, with Sirius being the star. I reckon Xcite should be the big mover next week, followed perhaps by Angel on some Nanulaq mine news. The Contrarian Investor UK portfolio has had a nice start to 2011, with a profit edging towards £7000 already because of gains on Bowleven and Xcite earlier in January.
Thursday, January 20, 2011
FTSE 100 gets a good pasting after China worries
The FTSE 100 fell 109 points today to close at 5,868 on fears that that the Chinese government will be forced to increase interest rates to dampen growth in an economy growing at over 10% in the last quarter of 2010. This meant bad news for commodity stocks on concerns on a fall off of Chinese demand.
Bay day for parts of the portfolio (Sirius, Bowleven, Imagination Tech) as technology and oil stocks were hit hard. On the positive side, Angel mining stayed flat after a weak start and largest holding Xcite finished the day up 7.5p (after rising as much as 16p) in the early afternoon.
Rising commodity prices are beginning to take their toll on some sectors. EasyJet (EZJ) dropped16%, the most in 6 1/2 years, after it said its first-half loss may double after increasing fuel costs due to the high oil price rose and poor weather caused flights to be canceled. Pretax losses for the six months to March 31 will be around £160 million compared with £78.7 million a year earlier. Associated British Foods (ABF) and Dominoes Pizza (DOM), dropped 3% and 6% respectively on fears of the impact of rising food ingredient prices. Prices of many commodities continue to rocket to multi year highs due to bad weather, speculation and the effect of the falling dollar (as many of these commodities are sold in US dollars). Ultimately, this may feed through to rising retail inflation and rising interest rates which will curtail economic growth.
As I predicted in my forecast for 2011, the year would be choppy with many opportunities to buy on corrections and many opportunities to sell on market peaks (see my post on the FTSE and DOW for 2011 http://contrarianinvestoruk.blogspot.com/2011/01/prediction-for-ftse-100-and-dow.html)
Bay day for parts of the portfolio (Sirius, Bowleven, Imagination Tech) as technology and oil stocks were hit hard. On the positive side, Angel mining stayed flat after a weak start and largest holding Xcite finished the day up 7.5p (after rising as much as 16p) in the early afternoon.
Rising commodity prices are beginning to take their toll on some sectors. EasyJet (EZJ) dropped16%, the most in 6 1/2 years, after it said its first-half loss may double after increasing fuel costs due to the high oil price rose and poor weather caused flights to be canceled. Pretax losses for the six months to March 31 will be around £160 million compared with £78.7 million a year earlier. Associated British Foods (ABF) and Dominoes Pizza (DOM), dropped 3% and 6% respectively on fears of the impact of rising food ingredient prices. Prices of many commodities continue to rocket to multi year highs due to bad weather, speculation and the effect of the falling dollar (as many of these commodities are sold in US dollars). Ultimately, this may feed through to rising retail inflation and rising interest rates which will curtail economic growth.
As I predicted in my forecast for 2011, the year would be choppy with many opportunities to buy on corrections and many opportunities to sell on market peaks (see my post on the FTSE and DOW for 2011 http://contrarianinvestoruk.blogspot.com/2011/01/prediction-for-ftse-100-and-dow.html)
Saturday, January 15, 2011
Gasser Felstechnik AG web site confirms completion of Angel Mining Black Angel mine cable car terminal
According to the Gasser web site (thanks for link lazerdial iii) Angel Mining's Black Angel zinc/lead mine now have completed the installation of the cable car terminals and excavating rock faces. The cables and other equipment will be installed in Q2, funded with revenues from the Nalunaq gold mine, a major step in the commissioning of the mine. (http://www.felstechnik.ch/de/felssicherung/abgeschlossene_spezialarbeiten).
Completed Project Reports:
Completed Project Reports:
Building: | Black Angel Mine | |
| Location: | Maarmorilik, Greenland | |
| Sponsor: | Garaventa AG 6343 Rotkreuz | |
| Power: | - Create Zugsliege - Div. Demolition Steel - Felsabträge - Rock Support |
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Friday, January 14, 2011
Portfolio review of the week - 14th January 2011
An action packed week by any measure for the Contrarian Investor UK portfolio, particularly on my largest holding Xcite Energy (XEL). A great deal of volatility to contend with and today some good entry points for some of the stocks in my watch list.
Xcite Energy (XEL) - I have written about the mini "flash crash" on a post yesterday so won't revisit this. Today the company issued an RNS stating that it had entered into an extension to the binding letter of intent (LOI) with British American Offshore Limited for the N-Class "Rowan Norway" jack-up rig.The LOI has been extended by mutual consent to 31st January 2011 with no amendment to the existing termination fee payable by XER in the event it does not enter into a definitive agreement by this date. Of course this was greeted with many rumours on the bulletin boards why the extension was on the cards, particularly that a takeover was imminent because of the 2 week extension (the original deadline was the 15th) but my take is that the legal paperwork is just taking a while to finalise or perhaps they are negotiating an earlier delivery of a another rig which is built (Rowan Stavanger rig is available immediately after contractee reneged) . I'd love it if Statoil was about to pounce, but this is probably unlikely until the resources are confirmed as bankable reserves in February/March.
Angel Mining (ANGM) - A week where the share price retraced heavily from the 7p area and was down nearly 10% to 5.5p today before bouncing back in the late afternoon to 5.88p. The fall was a good opportunity to top up the holding with the first shipment of doré for refining is expected to take place in January 2011 from the Nalunaq gold mine in Greenland. I am sure that this was Market Maker manipulation today to stock up on shares before the RNS due any day for the first shipment of gold. Spread bet opened (Sep 2011) at 5.841p. Though volatile, Angel is still a great opportunity for 2011.
Bowleven (BLVN) - The Cameroon explorer made relatively little share price progress this week despite some positive news from its continued drilling in the Sapele 1 well. Today Barcap named Bowleven as its top pick for this year in the oil exploration sector with a £5 target (it is currently 391p, up 5p on the day). Lots of news is expected from the company in the coming weeks as it continues to drill Sapele 1. The size of the resources already identified is significant. Estimates of oil in place have increased from 40 -290 million barrels to 65 to 430 million barrels in the Deep Omicron, mean 217 million barrels.
Sirius Minerals (SXX) - Potash explorer Sirius has been a share that I have traded in and out of several times in 2010. Sirius presently holds in excess of 7,425 net mineral acres of exploration leases in the Williston Basin in North Dakota covering known potash and salt deposits. It also owns properties in Western Australia and Queensland.The share price has been strong this week with a rise to around 17p, as rumours begin to grow about the potential size of the prize at it exploration site in North Dakota. On November 9th 2010, Sirius announced that drilling has commenced on its North Dakota property. An exploratory hole is being drilled to a total depth of approximately 2,740meters. Sirius had anticipated that the drilling, core logging and analysis would take approximately two months to complete ie. around mid January. An RNS on the 24th December confirmed that samples would be logged in detail, photographed and selectively prepared for geochemical analysis. Final analysis will then be completed by the Saskatchewan Research Council by mid February.
I took the opportunity today to start building a position with so much news just round the corner despite the rise from the 12p to 16p region in the last week. If Dakota comes in, the share price will be many multiples higher.
Overall a week where the portfolio showed little change in its value. Prior to the drop in Xcite today, I moved more of my positions from contracts for difference (CFD's) to spread bets since I believe that the talk of a doubling or tripling of the share price talked by Xcite at Oilbarrel yesterday is not pie in the sky. This could mean a very hefty tax bill in standard shares or CFD's, so a bit of planning needed for both 2010/11 and 2011/12 tax years. Next week should be exciting with news due from Bowleven and Angel.
Xcite Energy (XEL) - I have written about the mini "flash crash" on a post yesterday so won't revisit this. Today the company issued an RNS stating that it had entered into an extension to the binding letter of intent (LOI) with British American Offshore Limited for the N-Class "Rowan Norway" jack-up rig.The LOI has been extended by mutual consent to 31st January 2011 with no amendment to the existing termination fee payable by XER in the event it does not enter into a definitive agreement by this date. Of course this was greeted with many rumours on the bulletin boards why the extension was on the cards, particularly that a takeover was imminent because of the 2 week extension (the original deadline was the 15th) but my take is that the legal paperwork is just taking a while to finalise or perhaps they are negotiating an earlier delivery of a another rig which is built (Rowan Stavanger rig is available immediately after contractee reneged) . I'd love it if Statoil was about to pounce, but this is probably unlikely until the resources are confirmed as bankable reserves in February/March.
Angel Mining (ANGM) - A week where the share price retraced heavily from the 7p area and was down nearly 10% to 5.5p today before bouncing back in the late afternoon to 5.88p. The fall was a good opportunity to top up the holding with the first shipment of doré for refining is expected to take place in January 2011 from the Nalunaq gold mine in Greenland. I am sure that this was Market Maker manipulation today to stock up on shares before the RNS due any day for the first shipment of gold. Spread bet opened (Sep 2011) at 5.841p. Though volatile, Angel is still a great opportunity for 2011.
Bowleven (BLVN) - The Cameroon explorer made relatively little share price progress this week despite some positive news from its continued drilling in the Sapele 1 well. Today Barcap named Bowleven as its top pick for this year in the oil exploration sector with a £5 target (it is currently 391p, up 5p on the day). Lots of news is expected from the company in the coming weeks as it continues to drill Sapele 1. The size of the resources already identified is significant. Estimates of oil in place have increased from 40 -290 million barrels to 65 to 430 million barrels in the Deep Omicron, mean 217 million barrels.
Sirius Minerals (SXX) - Potash explorer Sirius has been a share that I have traded in and out of several times in 2010. Sirius presently holds in excess of 7,425 net mineral acres of exploration leases in the Williston Basin in North Dakota covering known potash and salt deposits. It also owns properties in Western Australia and Queensland.The share price has been strong this week with a rise to around 17p, as rumours begin to grow about the potential size of the prize at it exploration site in North Dakota. On November 9th 2010, Sirius announced that drilling has commenced on its North Dakota property. An exploratory hole is being drilled to a total depth of approximately 2,740meters. Sirius had anticipated that the drilling, core logging and analysis would take approximately two months to complete ie. around mid January. An RNS on the 24th December confirmed that samples would be logged in detail, photographed and selectively prepared for geochemical analysis. Final analysis will then be completed by the Saskatchewan Research Council by mid February.
I took the opportunity today to start building a position with so much news just round the corner despite the rise from the 12p to 16p region in the last week. If Dakota comes in, the share price will be many multiples higher.
Overall a week where the portfolio showed little change in its value. Prior to the drop in Xcite today, I moved more of my positions from contracts for difference (CFD's) to spread bets since I believe that the talk of a doubling or tripling of the share price talked by Xcite at Oilbarrel yesterday is not pie in the sky. This could mean a very hefty tax bill in standard shares or CFD's, so a bit of planning needed for both 2010/11 and 2011/12 tax years. Next week should be exciting with news due from Bowleven and Angel.
Wednesday, January 12, 2011
Angel Mining CFO awarded 10 million shares at 5.8p
Angel Mining (ANGM) have announced late in the day today that their CFO Kevin McNair has been 10 million shares in the company's incentive share plan at 5.89p. Hell of an incentive to move the share price above 6p! A lot of buys late in day so hopefully back to a blue day tomorrow after the slippages this week back from the 7p level. Disappointing that the BBC Greenland documentary had no positive impact, despite show casing the company's Black Angel mine.
With Angel Mining gold production underway at Nanulaq this remains a very strong buy in my opinion.You get a gold mine producing $32 million in sales this year plus a potential $1.5 billion zinc/lead mine at Black Angel thrown in for free.
With Angel Mining gold production underway at Nanulaq this remains a very strong buy in my opinion.You get a gold mine producing $32 million in sales this year plus a potential $1.5 billion zinc/lead mine at Black Angel thrown in for free.
Dull day so far for portfolio
After getting up with anticipation every morning this week for an RNS from Xcite Energy, nothing so far. The shares dropped 4.5p initially but now are stable down 1.5p at 385-395p but the spread is swinging around considerably. I was a little surprised that the drop wasn't much greater but I suppose everyone's playing the waiting game and not daring to trade in and out with news due any time soon on the Bentley resources. I still believe an RNS will be issued before the oilbarrel.com conference tomorrow but the board of directors are pretty astute in releasing information only when the i's have been dotted and t's crossed. The rig news must come before the 15th to avoid a $4 million penalty.
Angel mining and Bowleven are both pretty flat today. I guess its going to be a low adrenaline day! Come on Xcite board give the Contrarian a lovely RNS this morning!
Angel mining and Bowleven are both pretty flat today. I guess its going to be a low adrenaline day! Come on Xcite board give the Contrarian a lovely RNS this morning!
Sunday, January 9, 2011
Angel Mining Black Angel Mine just featured on BBC2 "Arctic with Bruce Parry"
Just been watching BBC 2's "Artic with Bruce Parry". Brucy spent some time in the summer of 2010 with Tim Daffern (resigned to be CEO of gold miner Hambledon Mining (HMB) in September 2010) at the Black Angel mine owned by Angel Mining (ANGM) in the Disko bay area of Greenland. Tim confirms that there are reserves of $1 billion of lead and zinc with1000 pillars of $1.5 million dollar zinc seams. The programme shows the building of the cable car entrance to the mine. Interesting stuff!
Saturday, January 8, 2011
Portfolio review of the week - 8th January 2011
My first week after returning to writing the Contrarian Investor UK blog has been a good one. It was a difficult decision to restart posting given the constraints on my time but I have been encouraged firstly by the portfolio performance, by the significant traffic coming to the site and some of the positive comments left by readers. As with any blog, you sometimes hit the wall of despair, but for now I will persevere with posts and see how the thing goes.
I have thrown my usual rules of portfolio diversification out of the window at the moment with my substantial holding in North Sea oil company Xcite Energy (XEL). Whilst being reckless in some respects, I have not found such a compelling risk/reward ratio on an AIM stock for a very long time and in particular the share price weakness following the excellent flow test results for the Bentley field was one of those rare"once in a lifetime" investing opportunities. Despite being massively de-risked at the point that Xcite announced a flow test of 2900 barrels per day i.e. of field commerciality, I could pick up shares for around 350p, only 20-30 p more than when the shares had a huge risk of failure still hanging over them as investors waited to see if the company could actually extract the 160 million barrels of oil plus from the field. The market makers had a field day, as private investors piled out of Xcite in the New Year in to other stocks. I had not imagined that I would be able to buy Xcite for less than 400p following flow test results this good, but sometimes the markets aren't logical and that's when easy money can be made.
So next week will be an exciting week for Xcite. The oilbarrel.com conference next Thusday the 13th and the deadline for the signing of the rig on the 15th make me believe that it is very likely that we will see at least 2 RNS's - 1) an updated CPR (competent persons report) to upgrade the Bentley field oil reserves 2) signing of the rig contract with a timeline for the start of field commercialisation. The board of directors have been expert in managing the flow of information to investors and I'm sure they won't less us down now. The share price rebound yesterday and Thursday seems to illustrate that I am not alone in expecting some good news update early next week.
Of course we're already seeing rumours swirling of Statoil bids etc. I'm sceptical about these so early in the game but I guess you never know. Perhaps someone is thinking in an M&A department somewhere that they can pick up Bentley on the cheap.
Greenland gold miner, Angel Mining (ANGM) also had a strong week. With the share price close to breaking 7p, up from 5.5p, for most of it. I am awaiting the BBC documentary about Greenland on Sunday night with interest which features their Black Angel zinc mine. Though my holding is far less large than Xcite, I am confident that as the year progresses the share price will continue to move up albeit with some volatility. This is the way with these sub 10p AIM stocks.
Finally, as I posted yesterday, I have made a speculative investment in Cameroon oil explorer Bowleven (BLVN) as further results from its Sapele 1 well are imminent. Though there is a risk in this investment if the company update is disappointing the downside risk is somewhat minimised by the RNS's already released in November about the size of the existing discovery. The potential upside could be massive, so a cheeky spread bet was placed and though I have less confidence than Xcite the risk/reward ratio looks good.
Once Xcite reaches my target price I will look to move funds into other stocks on my watch list assuming the market corrects enough for me to take advantage of any compelling valuations. However, for now I wait for the arrival of next week with great anticipation with all the potential news flow from all the companies in the Contrarian Investor UK portfolio. Keeping my fingers crossed for a champagne week to ease the winter blues!
I have thrown my usual rules of portfolio diversification out of the window at the moment with my substantial holding in North Sea oil company Xcite Energy (XEL). Whilst being reckless in some respects, I have not found such a compelling risk/reward ratio on an AIM stock for a very long time and in particular the share price weakness following the excellent flow test results for the Bentley field was one of those rare"once in a lifetime" investing opportunities. Despite being massively de-risked at the point that Xcite announced a flow test of 2900 barrels per day i.e. of field commerciality, I could pick up shares for around 350p, only 20-30 p more than when the shares had a huge risk of failure still hanging over them as investors waited to see if the company could actually extract the 160 million barrels of oil plus from the field. The market makers had a field day, as private investors piled out of Xcite in the New Year in to other stocks. I had not imagined that I would be able to buy Xcite for less than 400p following flow test results this good, but sometimes the markets aren't logical and that's when easy money can be made.
So next week will be an exciting week for Xcite. The oilbarrel.com conference next Thusday the 13th and the deadline for the signing of the rig on the 15th make me believe that it is very likely that we will see at least 2 RNS's - 1) an updated CPR (competent persons report) to upgrade the Bentley field oil reserves 2) signing of the rig contract with a timeline for the start of field commercialisation. The board of directors have been expert in managing the flow of information to investors and I'm sure they won't less us down now. The share price rebound yesterday and Thursday seems to illustrate that I am not alone in expecting some good news update early next week.
Of course we're already seeing rumours swirling of Statoil bids etc. I'm sceptical about these so early in the game but I guess you never know. Perhaps someone is thinking in an M&A department somewhere that they can pick up Bentley on the cheap.
Greenland gold miner, Angel Mining (ANGM) also had a strong week. With the share price close to breaking 7p, up from 5.5p, for most of it. I am awaiting the BBC documentary about Greenland on Sunday night with interest which features their Black Angel zinc mine. Though my holding is far less large than Xcite, I am confident that as the year progresses the share price will continue to move up albeit with some volatility. This is the way with these sub 10p AIM stocks.
Finally, as I posted yesterday, I have made a speculative investment in Cameroon oil explorer Bowleven (BLVN) as further results from its Sapele 1 well are imminent. Though there is a risk in this investment if the company update is disappointing the downside risk is somewhat minimised by the RNS's already released in November about the size of the existing discovery. The potential upside could be massive, so a cheeky spread bet was placed and though I have less confidence than Xcite the risk/reward ratio looks good.
Once Xcite reaches my target price I will look to move funds into other stocks on my watch list assuming the market corrects enough for me to take advantage of any compelling valuations. However, for now I wait for the arrival of next week with great anticipation with all the potential news flow from all the companies in the Contrarian Investor UK portfolio. Keeping my fingers crossed for a champagne week to ease the winter blues!
Tuesday, January 4, 2011
Angel Mining share price finally starts to move up
After a sluggish few weeks, Angel mining (ANGM) had its second day of 10% gains to finish at 6.5p. Despite news of the start of production at the process plant at the Nalunaq gold mine in Greenland in mid-December, the shares were struggling to make any headway as new equity was issued through the SEDA ( Standby Equity Distribution Agreement) which allowed Angel to access funds in return for the issue of new discounted shares to the SEDA provider YA Global masters SPV Ltd..
News of the first shipment of gold from the plant is expected this week. The directors expect the Company to produce approximately 65 ounces of gold per day and an annual production of approximately 25,000 ounces. The Company's forecast cash cost per ounce of gold at target production is approximately US$560 which it expects to achieve in Q1 2011. At target production and with an average gold price of US$1,300 per ounce, the Nalunaq mine should produce annualised revenues and free cash of approximately US$32.5 million and US$18.5 million respectively.
In addition to the Nalunaq gold plant, Angel own the Black Angel zinc/lead mine which will be developed from cash flows from gold production. Lots of positive news to come from this company in 2011 after the setbacks and delays of 2009 & 2010.
News of the first shipment of gold from the plant is expected this week. The directors expect the Company to produce approximately 65 ounces of gold per day and an annual production of approximately 25,000 ounces. The Company's forecast cash cost per ounce of gold at target production is approximately US$560 which it expects to achieve in Q1 2011. At target production and with an average gold price of US$1,300 per ounce, the Nalunaq mine should produce annualised revenues and free cash of approximately US$32.5 million and US$18.5 million respectively.
In addition to the Nalunaq gold plant, Angel own the Black Angel zinc/lead mine which will be developed from cash flows from gold production. Lots of positive news to come from this company in 2011 after the setbacks and delays of 2009 & 2010.
Monday, January 3, 2011
Prediction for FTSE 100 and DOW Industrials 2011
Contrarian Investor UK predicts the FTSE 100 will end 2011 at 6550 and the Dow Jones Industrials will hit 13,000.
But I believe its going to be a very volatile year, suiting a trading style rather than buy and hold. On the plus side, continued ultra low interest rates and quantitative easing will continue to drive the U.S. earnings and hence the market in 2011. It is unlikely that the Federal Reserve will begin to tighten monetary policy by raising interest rates too aggressively during 2011 despite signs of rising inflation notably in commodities. One day the U.S. government may be forced to take action against its ballooning budget deficit and rising national debt, but this isn't on the agenda in 2011 or even 2012 with the next presidential election due in 2012. Although the U.K. government has decided to take action to reduce spending and raise taxes, across the Atlantic this is an alien concept for now given this strategy would be likely to be politically unpopular with mainstream America.
The weak U.S. dollar has helped drive impressive growth in gold, silver, oil, and industrial metals as well as agricultural products e.g. cotton during 2010. It is unlikely that the dollar will reverse its trend in 2011 but continued high demand from Asia (notably China) may begin to wain.
There is likely to be notable sell-offs during 2011 precipitated by several possible scenarios:
1. worries about euro zone debt (particularly Portugal and Spain). The U.S. budget deficit and lack of action to tackle it.
2. Chinese inflation and an increase in interest rates
3. A stagnant or declining property market, plus rising defaults
4. Poor unemployment numbers in the euro zone and U.S.
Therefore I will not be over committing myself too early in 2011. I will keep cash on the sidelines to take advantage of falls in the more speculative stocks on my watch list rather than piling in during January when sentiment is too positive. I would rather buy on a sell-off then when the market is red-hot and universally bullish. These are:
1. Xcite Energy (XEL) - North Sea oil (already hold)
2. Bowleven (BLVN) - Cameroon oil explorer
2. Nautical Petroleum (NPE) - North Sea oil
3. Coal of Africa (CZA) - South African coal miner
4. Angel Mining (ANGM) - Greenland Gold and Zinc (already hold)
5. Ithaca Energy (IAE) - North Sea oil
In addition to these AIM plays, I am also interested in Aviva, Shell, Reynolds, BAT, Imperial Tobacco as dividend stocks.
But I believe its going to be a very volatile year, suiting a trading style rather than buy and hold. On the plus side, continued ultra low interest rates and quantitative easing will continue to drive the U.S. earnings and hence the market in 2011. It is unlikely that the Federal Reserve will begin to tighten monetary policy by raising interest rates too aggressively during 2011 despite signs of rising inflation notably in commodities. One day the U.S. government may be forced to take action against its ballooning budget deficit and rising national debt, but this isn't on the agenda in 2011 or even 2012 with the next presidential election due in 2012. Although the U.K. government has decided to take action to reduce spending and raise taxes, across the Atlantic this is an alien concept for now given this strategy would be likely to be politically unpopular with mainstream America.
The weak U.S. dollar has helped drive impressive growth in gold, silver, oil, and industrial metals as well as agricultural products e.g. cotton during 2010. It is unlikely that the dollar will reverse its trend in 2011 but continued high demand from Asia (notably China) may begin to wain.
There is likely to be notable sell-offs during 2011 precipitated by several possible scenarios:
1. worries about euro zone debt (particularly Portugal and Spain). The U.S. budget deficit and lack of action to tackle it.
2. Chinese inflation and an increase in interest rates
3. A stagnant or declining property market, plus rising defaults
4. Poor unemployment numbers in the euro zone and U.S.
Therefore I will not be over committing myself too early in 2011. I will keep cash on the sidelines to take advantage of falls in the more speculative stocks on my watch list rather than piling in during January when sentiment is too positive. I would rather buy on a sell-off then when the market is red-hot and universally bullish. These are:
1. Xcite Energy (XEL) - North Sea oil (already hold)
2. Bowleven (BLVN) - Cameroon oil explorer
2. Nautical Petroleum (NPE) - North Sea oil
3. Coal of Africa (CZA) - South African coal miner
4. Angel Mining (ANGM) - Greenland Gold and Zinc (already hold)
5. Ithaca Energy (IAE) - North Sea oil
In addition to these AIM plays, I am also interested in Aviva, Shell, Reynolds, BAT, Imperial Tobacco as dividend stocks.
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