Turbulent Tuesday – ARCM, JKX, SO4, INFA
Tuesday started well with three companies I’ve covered for Cube announcing good news at the corporate level. My portfolio was safely in the blue until Infrastrata’s RNS. I’ve tried to pick out the highlights from the announcements below:
Arc Minerals – Commercial Scale Demonstration Plant Update
Shareholders in Arc Minerals may have at times felt like they were invested in “BePatient Minerals” (I know I have) as news flow has been slower than anticipated over the past six months.
The company provided an update to the market on Tuesday that its demonstration plant’s front end had been completed and that commission of the back end is due to commence next week. Initial capacity is to process 10,000 tonnes per month. This is excellent news and means that Arc will be one of the only exploration companies on AIM generating revenue. In the medium term, I expect throughput at the plant to increase.
Chairman Nick von Schirnding stated:
“I am very pleased with the progress at our plant over the past year. We have been extremely disciplined in regards to our capex requirements and have met our targets of completing the plant on schedule and on budget. Since we came on board less than a year ago we have, for a relatively modest investment of under half a million dollars, now got a plant that is capable of producing copper/cobalt concentrates and generate future revenues for the group.
We are finalising the airborne survey and geochem analysis and a further update is imminent.”
Whilst the share price and newsflow have been frustrating for shareholders I continue to believe in the high quality management and assets that Arc has and trust that over the coming weeks and months, shareholders’ patience will be rewarded.
JKX Oil & Gas – 38% increase in Ukrainian production!
JKX today announced:
“Following the successful initial test rate of IG103 sidetrack, referred to in the recent Quarterly Operations update, the performance of the well continues to exceed expectations and as such production in Ukraine has averaged 5,129 boepd since the start of the year. This is significantly higher than the Q4 2018 average of 3,707 boepd”.
This is a 38% increase over Q4 production and even higher than when the company announced its Q4 results. The ludicrous share price that I highlighted for Cube was rectified today, with shares closing up 29% back into the mid 40’s.
I’ve criticised JKX’s investor relations previously so it was positive to read in the RNS that “Victor Gladun, CEO of PPC, JKX’s operating subsidiary in Ukraine, is today presenting at the Ukrainian Gas E&P Forum in London”.
Salt Lake Potash – the market continues to ignore material progress
Salt Lake announced a huge amount of progress which resulted in a whooping two trades going through. I have a large (for my portfolio) position in Salt Lake as does Lombard Odier who owns over 9% (and Fidelity owns 5%). Those interested should read today’s RNS as it is comprehensive. Worth highlighting CEO Tony Swiericzuk continued positivity:
“I am very pleased with the continued development progress the project team is achieving at Lake Way. The initial salt harvest from the Lake Way SET is a significant milestone. It validates our production model and allows us to refine the process parameters for plant design, as well as providing feed for the pilot plant. In parallel with the progress of plant design, rapid project development continues with site access construction underway and the whole of lake resource definition well advanced.”
Salt Lake continues to make material progress without recognition although I expect this to be rectified as the company continues to make progress during the year. More positively the shares whilst illiquid are not very volatile.
Infrastrata – EU funding update
Infrastrata’s shares continue to be volatile with shares down 15% on news that the company wouldn’t receive EU funding, although the company can re-apply. This is covered in more detail in my upcoming article on the subject!
At the time of publication, the author holds a long position in ARCM, JKX, SO4 and INFA