Broadband boost for remotest parts of UK

FTSE-100 Chart (1 Year)

FTSE-100 1 Year Chart

Today’s edition features:

  • Alecto Minerals (ALO.L)
  • Ariana Resources (AAU.L)
  • Keras Resources (KRS.L)
  • Savannah Resources (SAV.L)

Visit Company News »


The FTSE-100 finished yesterday’s session 0.04% lower at 7,041.42, whilst the FTSE AIM All-Share index closed 0.24% worse-off at 824.56. In continental Europe, the CAC-40 finished 0.33% lower at 4,833.82 whilst the DAX was 0.03% higher at 11,468.64.

Wall Street
In New York overnight, the Dow Jones fell 0.16% to 19,941.96, the S&P-500 lost 0.25% to 2,265.18 and the Nasdaq dropped 0.23% to finish on 5,471.43.

In Asian markets this morning, the Nikkei 225 had fallen 0.26% to 19,394.90, while the Hang Seng eased 0.73% to 21,650.57.

In early trade today, WTI crude was down 0.204% to $52.47/bbl and Brent was flat at $54.56/bbl.


Broadband boost for remotest parts of UK
The government has said £440m has been found so about 600,000 more premises can gain access to superfast broadband. The cash comes from “efficiency savings” and money returned by BT as part of the government’s flagship broadband rollout scheme. Culture Secretary Karen Bradley said the funds would help to bring faster speeds to homes and businesses in some of the most remote parts of the UK. Experts said it was not all “new money” but would still be welcomed. The cash will be made up of £150m in cost savings and the rest in the form of returned subsidies from BT, the government said. Under a 2010 deal, the government paid BT to roll out superfast broadband in hard-to-reach areas where providers had said it was not cost-effective to install broadband infrastructure. As part of the agreement, if more than 20% of premises in those areas bought superfast broadband, BT had to repay some of the subsidy. On average, the take-up has been 30.6%, leading to a forecast repayment of £292m, the Department for Culture, Media and Sport said.

Source: BBC News

Company news

Alecto Minerals (ALO.L, 0.06p) – Under Review
Alecto has announced a transformational Zambian copper mine acquisition. At this stage it is proposed and conditional on various things, including detailed technical due diligence and a modest amount of initial funding. As a reverse takeover, the shares are now suspended and expected to resume trading end March, on completion. The Mowana open pit mine had pre-production capex of $60m spent on it, and after Alecto’s upgrades it should produce 22kt of copper (in concentrate) per annum. The grade is c.1.34% copper and Alecto estimates an 11 year mine life with extension potential. The main elements of the acquisition are £1m cash and £5.72m in shares. There is also a $20m requirement to re-vamp the plant and a further $20m repayment of a legacy loan to the project. Alecto will end up with 60% of the mine and a 1.5% royalty, the lender will own 40% and $21m of outstanding debt. Importantly the $40m (mine re-vamp and loan repayment) are funded through pre-payments from two copper offtakers, meaning Alecto only requires £1m plus some working capital for the mine re-start (the working capital quantum is not disclosed).

Our view: This is an exciting event and although there a numerous moving parts and a slightly complex transaction, the end result should be Alecto owning 60% of this mine. Alecto’s internal studies show an NPV10 of $245m. So if it all works out, there will be very significant upside for existing Alecto shareholders despite the dilution. We put our recommendation under review pending more information about the funding (i.e. the working capital element/equity requirement), but first impressions are this is very good news for shareholders. Note the shares are suspended and not tradeable until end-March.

Beaufort Securities acts as corporate broker to Alecto Minerals plc


Ariana Resources (AAU.L, 1.66p) – Speculative Buy
Ariana Resources, the gold-silver exploration and development company operating in Turkey, announced yesterday that it has acquired 100% ownership of the Salindas gold project in north-east Turkey. Salindas (and the adjacent Ardala deposit) had been part of a 49:51 joint venture agreement between Ariana and European Goldfields prior to their acquisition by Eldorado Gold. Salindas has a combined JORC-complaint (Indicated and Inferred) resource of c 10Mt with an average grade of 2g/t Au and 10.2g/t Ag whereas Ardala has an inferred resource of 16Mt grading 0.6g/t Au with some minor copper (up to 0.2%) and molybdenum (up to 0.01%). A 2015 scoping study was completed on Salindas that demonstrated a potential production of 50,000oz Au and 100,000oz of Ag per annum over 10 years. Based on a gold price of US$1,250/oz and 8% discount rate, a pre-tax NPV of US$108m with an IRR of 28% was calculated. Under the terms of the agreement, Arianna will acquire the remaining 51% of Greater Pontides Exploration (a subsidiary of Eldorado Gold) for nominal cash consideration and a NSR royalty of up to 2%. Of note, Salindas is located in a region with significant exploration upside given its close proximity (only 16km) from the 4Moz Hot Maden gold project.

Our view: The above announcement coincides with Ariana’s 50% owned Kiziltepe gold project due for imminent production. As such, Ariana can now focus on further enhancements to its pipeline with the goal to ultimately increase its production capacity. Management is considering a work programme for Salindas in 2017 to identify potential resource extensions. We look forward to the first gold pour at Kiziltepe as well as further updates on Salindas as Ariana focuses on unlocking the value of c 1Moz in-situ gold ounces within a highly prospective area containing significant new gold discoveries. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Ariana Resources plc


Keras Resources (KRS.L, 0.45p) – Speculative Buy
Keras Resources announced yesterday assay results from its first two holes of its Reverse Circulation (RC) drill programme on its 100% owned Klondyke gold project located in the Pilbara Region of Western Australia. Drill hole KKC001 returned 18m grading 6.3g/t Au from 33m, including 6m grading 9.3g/t Au from 34m and drill hole KKC002 returned 9m grading 6.9g/t Au from 49m, including 6m grading 9.5g/t Au from 49m. These holes were drilled at the satellite Copenhagen deposit and assay results for a further six holes drilled on the main Klondyke are pending. The holes were planned to confirm known mineralisation ahead of resource definition drilling to begin in early 2017 and add to the existing JORC-compliant mineral resource estimate of 5.6Mt grading 2.08g/t Au. The current resource is confined to less than 30% of the known strike length of the main shear zone. Rock chip samples from the recently completed mapping programme returned 56g/t Au peak value at Copenhagen. The Company also announced that its Tribute mining agreement with KalNorth over the Lindsay’s deposit in the Western Australian Goldfields has been mutually terminated. Under terms of the termination agreement Keras has been refunded all third-party costs totally A$120,000.

Our view: Although the initial results confirm historic intercepts, we are very encouraged with the wide, high-grade intercepts that occur near surface from the first two drill holes at Copenhagen. We look forward to the pending assay results from the further six holes drilled at the main Klondyke trend and are encouraged with the potential for additional resources. It’s not surprising that the Company has decided to cease its tribute operations given the current pressure on gold prices. That said, management can now focus all of its attention on advancing the Klondyke gold project. We look forward to further updates on Klondyke drilling and mapping programmes given that the current resource is confined to only 30% of the main strike length. In the meantime, we maintain our speculative buy on the stock.

Beaufort Securities acts as corporate broker to Keras Resources plc


Savannah Resources (SAV.L, 5.70p) – Speculative Buy
Savannah Resources, the diversified mining group focused on exploration and development, announced today results from its rock chip sampling programme over its two new lithium projects in Finland (see RNS 2 Jun 2016). The Somero and Erajarvi projects cover an area of 60.5km2 and 98.5km2, respectively within a highly prospective lithium terrain. The sampling programme returned anomalous lithium mineralisation leading to the discovery of seven lithium-bearing pegmatites across both projects. A total of 524 samples (244 from Somero and 288 from Erajavi) were collected and submitted for analysis with key lithium-bearing minerals including spodumene, lepidolite and petalite identified in hand samples. Through its newly established Finnish subsidiary Finkallio Oy, Savannah holds a 100% interest in both projects.

Our view: Savannah’s reconnaissance rock chip sampling programme has now identified seven lithium-bearing pegmatites with assay results returning up to 4.47% Li2O. While still an early exploration play we are encouraged with the potential for lithium mineralisation in the area. Given that the global lithium demand is expected to double by 2025 on the back of the burgeoning battery market, Savannah is looking to capitalise on the lithium market and diversify its portfolio. We look forward to further updates regarding the exploration programme in Finland as well as continued developments on the copper-gold deposits in Oman and the heavy mineral sands in Mozambique. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Savannah Resources plc


To read Beaufort’s full research archive click here

Compiled by:
Barry Gibb, Kazunaga Senga, Sheldon Modeland & Charles Long
(t) +44 (0) 207 382 8384

Weekly diary

Click here to see all this week’s planned corporate and economic announcements.

During the three months to end-November 2016, the number of stocks on which Beaufort Securities published recommendations was 263, and the recommendations were as follows: Buy – 93; Speculative Buy – 131; Hold – 38; Sell – 1.

Full definitions of the recommendations used by Beaufort Securities in its publications and their respective meanings can be found on our website here.

Important Risk Warnings and Disclaimers
This report is published by Beaufort Securities Ltd (“Beaufort Securities”). Beaufort Securities Ltd is Authorised and Regulated by the Financial Conduct Authority and is a Member of the London Stock Exchange.


This document is not an offer to buy or sell any security or currency. This document does not provide you with individually tailored investment advice. It has been prepared without regard to the your financial circumstances and objectives The appropriateness of a particular investment or currency will depend on your individual circumstances and objectives. The investments and shares referred to in this document may not be suitable for you.

This research is non-independent and is classified as a Marketing Communication under FCA rules. As such it has not been prepared in accordance with legal requirements designed to promote independence of investment research and it is not subject to the prohibition on dealing ahead of the dissemination of investment research in COBS 12.2.5. However Beaufort Securities has adopted internal procedures which prohibit analysts from dealing ahead of non-independent research, except for legitimate market making and fulfilling clients’ unsolicited orders.

By receiving this document, you will not be deemed a client or provided with the protections afforded to clients of Beaufort Securities. When distributing this document, Beaufort Securities is not acting for you and will not be responsible for providing advice to you in relation to this document. Accordingly, Beaufort Securities will not be responsible to you for providing the protections afforded to its clients.

Beaufort Securities may effect transactions in shares mentioned herein and may take proprietary trading positions in those shares, and may receive remuneration for the publication of its research and for other services. Beaufort Securities may be a shareholder in any of the companies mentioned in this report. Accordingly, this document may not be considered as objective or impartial. Additionally, information may be available to Beaufort Securities or the Group, which is not reflected in this material. The remuneration of the author of this report is not tied to the recommendations on any shares mentioned nor to the any transactions undertaken by Beaufort Securities or any affiliate company. Further information on Beaufort Securities’ policy regarding potential conflicts of interest in the context of investment research and Beaufort Securities’ policy on disclosure and conflicts in general are available on request. Please refer to

Past performance is not a guarantee of future performance. Investments may go down in value as well as up and you may not get back the full amount invested. The listing requirements for securities listed on AIM or the ICAP Securities & Derivatives Exchange are less demanding and trading in them may be less liquid than main markets. This may make it more difficult to buy and sell these securities.

This document includes certain statements, estimates, and projections with respect to the anticipated future performance of securities listed on stock exchanges and as to the market for these shares. Such statements, estimates, and projections are based on information that we consider reliable and may reflect various assumptions made concerning anticipated economic developments, which have not been independently verified and may or may not prove correct. No representation or warranty is made as to the accuracy of such statements, estimates, and projections or as to its fitness for the purpose intended and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and may change without notice. Other third parties may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views, and analytical methods of the analysts who prepared them. This report has not been disclosed to any of the companies mentioned herein prior to its publication.

This document is based on information Beaufort Securities has received from publicly available reports and industry sources. Beaufort Securities may not have verified all of this information with third parties. Neither Beaufort Securities nor its advisors, directors or employees can guarantee the accuracy, reasonableness or completeness of the information received from any sources consulted for this publication, and neither Beaufort Securities nor its advisors, directors or employees accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document (except in respect of wilful default and to the extent that any such liability cannot be excluded by the applicable law). You should not rely on this document and should not use it substitution for the exercise of the independent judgment of yourself or your adviser.

The information contained in this document is confidential and is solely for use of those persons to whom it is addressed and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purpose. Other persons who receive this document should not rely on it. Beaufort Securities, its directors, officers and employees may have positions in the securities mentioned herein.

Beaufort Securities Limited, 63 St Mary Axe, London, EC3A 8AA.
Authorised and regulated by the Financial Conduct Authority (Register No. 155104).
Members of the London Stock Exchange, ISDX and QCA.

Comments are closed.