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Beaufort Securities Breakfast Alert: Harvest Minerals, Altus Strategies and Savannah Resources

Published: 03:20 22 Nov 2017 EST

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Markets
Europe
The FTSE-100 finished yesterday's session 0.30% higher at 7,411.34, whilst the FTSE AIM All-Share index was up 0.26% at 1,024.87. In continental Europe, the CAC-40 finished 0.48% higher at 5,366.15 whilst the DAX was up 0.83% at 13,167.54.
Wall Street
In New York last night, the Dow Jones closed 0.69% higher at 23,590.83, the S&P-500 added 0.65% to end at 2,599.03 and the Nasdaq finished 1.06% firmer at 6,862.48.
Asia
In Asian markets this morning, the Nikkei 225 was recently up 0.55% at 22,583.69 and the Hang Seng was 0.91% higher at 30,089.21.
Oil
In early trade today, WTI crude was 1.5% higher at $57.68 per barrel and Brent was up 0.66% at $62.98.
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Headlines
Budget 2017: Hammond must be cautious, say nervous investors
The chancellor has been urged to deliver a "cautious" Budget or risk alienating investors. Rupert Harrison, former chief of staff to George Osborne, said that Philip Hammond should not radically change strategy by increasing borrowing significantly. Mr Hammond is under pressure to be "big and bold" in the Budget which he will deliver at 12.30pm. He will say that he is "optimistic" about the future of the UK economy. But with a major downgrade expected to productivity - the ability of the economy to create wealth - his room for spending giveaways will be limited. Mr Harrison told the BBC that with Brexit uncertainty and nervousness about the direction the UK economy is heading, the markets would be keener on a "steady as she goes" message. "You don't want to surprise the world by saying we're embarking on a new strategy, we're going to borrow lots of money, raise taxes," he said. "I think in a moment when the world has got some question marks about the UK anyway, it's time for a bit of consistency and a bit of patience."
Source: BBC News

Company news
Harvest Minerals (LON:HMI, 13.75p) – Speculative Buy
Harvest Minerals has published excellent leaching results for its KPfertil product. Under controlled 'rainy' conditions in a lab, only 0.07% of the potassium in KPfertil was lost to the soil compared with circa 20% for potassium chloride, potassium sulphate and potassium nitrate. This result will assist with both the remineralizer certification process and product sales and marketing.

Our view: KPfertil continues to impress, in both lab testing and crop trials. This leaching result means KPfertil can be applied once as opposed to twice or multiple times for the likes of KCL and SOP. It also supports management's view that KPfertil is an excellent slow release fertiliser which will have a long lasting positive effect. We anticipate KPfertil receiving remineralizer certification in 1Q18, after which it should sell well given its excellent remineralizer and fertiliser qualities. We reiterate our Speculative Buy recommendation.

Beaufort Securities acts as a corporate broker to Harvest Minerals plc

Altus Strategies (LON:ALS, 8.13p) – Speculative Buy
Altus announced yesterday a definitive agreement with Legend Gold Corp (LGN.V). Terms have been agreed, management and supportive shareholders control sufficient shares on both sides that it is likely to complete. The basic terms are an all shares transaction valued at £3.4m and where Legend shareholders end up owning 27.6% of the enlarged share capital of Altus. Legend has six gold licences in Mali that cover nearly 400km2 of prospective exploration ground and contain c 900koz of discovered gold resources.

Beaufort Securities acts as corporate broker to Altus Strategies plc

Savannah Resources (LON:SAV, 5.38p) – Speculative Buy
Savannah Resources, a diversified energy and metals resource company, announced further drill results from its highly prospective lithium project, Mina do Barroso, in Portugal. The goal of the current drill programme is to define a maiden JORC (2012) compliant mineral resource estimate, which is expected by the end of 2017. The latest round of drilling comprises 27 holes totalling 2,566m with assay results from 11 holes confirming extensions to existing mineralisation. Savannah holds a 75% interest in the Mina do Barroso lithium project which hosts numerous lithium deposits and covers an area of 1,018km2. Drill results from the Reseratorio deposit returned 29m grading 1.07% Li2O and 35m grading 1.06% Li2O. The NOA deposit returned mineralisation near surface including 13m grading 1.19% Li2O (from 7m) and 11m grading 1.23% Li2O (from 46m). The Reservatorio, Grandao and NOA deposits remain open along strike and down-dip. Mapping has commenced along five additional high priority targets and Phase 2 of the metallurgical test work programme is expected to commence by the end of November.

Our view: The above results are very encouraging given the thick intercepts and decent Li grades occurring near surface. The latest round of drilling has extended mineralisation at Reservatorio and NOA deposits by 400m and 100m, respectively. Savannah continues to focus on defining a JORC (2012) compliant resource at Mina do Barroso to support a potential mine development plan. 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 with a strategic European lithium source. We look forward to further updates as the Company works towards resource estimate for Mina do Barroso by the end of 2017. In the meantime, we maintain a Speculative Buy rating on the stock.

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