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PROACTIVE NEWS SUMMARY: price of gold, Strategic Minerals, Ariana Resources, Sound Oil

Published: 11:23 22 Aug 2011 EDT

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Today’s news coverage by Proactive Investors included a report on Citigroup’s research note on gold, which stated that the yellow metal has a one-in-four chance of spiking to US$2,500 per ounce.

Today, the surge in gold continued with the yellow metal striking a record US$1,888.90 an ounce.

Citigroup had previously considered that gold had a five per cent probability of achieving the US$2,500 per ounce target, but in a note published today the investment bank said it had increased its gold price estimates in order to accommodate the impact that global financial tension is having on the metal.

“However, we expect those tensions and concerns to dissipate over time and do not believe that (price sensitive) jewellery demand will be able to make up for the loss of investment demand once sovereign financial tensions ease,” the banks’ analysts said.

Another feature story focused on Strategic Minerals (LON:SML), whose shares climbed more than 10 percent last week despite the gloomy mood that dominated the markets.

This came as the group unveiled plans to augment its exploration activities with the promise of some early production, and by extension, cashflow.

On Friday it announced it is in discussions to acquire private Australian firm Ebony Iron for an initial £10 million, which will be paid in shares.

Ebony’s assets are an interesting mix, which make a snug fit with SML’s Iron Glen magnetite project in Queensland.

They include a total of six exploration tenements in the Northern Territory and Western Australia.

Covering 6,221 square kilometres, the Ebony targets in Northern Territory are in the highly prospective Hodgson and Roper River regions, where Sherwin Iron is also blazing a trail.

The potential of these assets is underlined by the deal terms, which allow for the issue of a further 50 million new SML shares once a minimum JORC indicated resource of 200 million tonnes is confirmed.

Another small cap mining company Ariana Resources (LON:AAU), which is focused on gold, rallied 10.5 percent to 6.63 pence today after discovering a new buried gold-silver vein system, called the Hande Vein, at the Kiziltepe target of its Red Rabbit gold project.

The latest success follows the discovery in May of the Gamze Vein at Kiziltepe and further underpins the high prospectivity of Red Rabbit project area where production is targeted for the fourth quarter of 2012, the group said in a statement.

Since the discovery of the Gamze Vein, the company has continued surface sampling along multiple geophysical targets at the Kiziltepe deposit.

A field team recently completed a follow-up float and rock-chip sampling programme over an area covering the newly named Hande Vein.  This was designed to confirm the distribution of near surface mineralisation and to determine the relationship of this structure to the Banu Vein, which outcrops to the southeast.

Proactive also covered today’s acquisition of the remaining 2 per cent of Consul Oil & Gas limited by closely followed oil and gas junior Sound Oil (LON:SOU).

To complete the deal it has issued 5.55 million new Sound Oil shares to the vendors, as well as making a US$46,667 cash payment.

The acquisition of a 96 per cent stake in Consul, completed in January this year, added a whole new side to the business. Consul owns varying interests in seventeen licences in Italy. In combination with the group’s Indonesian assets it provides a new level of diversity to Sound Oil's project portfolio.

After today’s transaction Consul is a wholly-owned subsidiary of Sound Oil.

Earlier today Sound Oil confirmed that it has begun the preparations for the Casa Tiberi-1 farm-in exploration well on its 75 per cent owned Montemarciano permit in Central Italy.

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