Broker Roundup: Chaarat Gold, Caledon Resources, Triple Plate Junction, Avia Health Informatics, IGAS


Westhouse Securities analyst Mark Heyhoe looked at Chaarat Gold (LON:CGH) after what he described as a great year. 

“First it increased its resource by 20 percent from 3.338 million ounces (Moz) to 4.009Moz, then it discovered that part of the project could be free milling and mined at surface, allowing it to fast-track into production in Q4 2011 and pour gold in Q2 2012.”

He adds: “we believe that these positive developments have been missed by investors, as the company is valued at only US$35.3 per ounce, compared to our pre-production peer group of US$72.6 per ounce. 

“With strong news flow anticipated over the coming months, including resource upgrades and the feasibility study for Tulkubash, we believe Chaarat is due to attract increased interest.” 

The analyst rates Chaarat as a ‘buy’ and he upgraded his target from 82 to 107 pence per share.

John Mcgloin, mining analyst at Collins Stewart, commented on Caledon Resources (LON:CDN) after it announced a 256 percent increase in the Minyango coal resource.

“The resource estimate has increased to 1.2 billion tonnes on the property that holds the potential for coking and thermal quality coal,” Mcgloin said in a note to clients. 

He adds: “While this is very positive news, following the proposed cash offer at 112p by Guangdong Rising for Caledon in November, investors are primarily waiting for the pre-conditions to be met for the offer to go firm,

“Most important of these pre-conditions is the outbound investment approval required by Guangdong Rising from four Chinese state bodies by 31 December 2010.” 

Mcgloin also highlighted Triple Plate Junction (LON:TPJ) improved performance, which was shown in its results this morning.

“There is a noticeable change in the company since the new board have taken the reins with a much improved approach to news flow (4 times the number of announcement this year compared to last year),” Mcgloin said.

He adds: “Next year is shaping up to be a notable one for TPJ and this time round it looks like investors will be kept in the loop,

“We think this is one to watch.”

Panmure Gordon analyst George O'Connor commented on Avia Health Informatics (LON:AVIA) new business wins.

 “A trio of contract wins, a bridgehead customer for FirstAssess and an award for ‘innovation’ illustrates the progress made by Avia,” O’Connor said. 

“In our opinion, Avia is set to tap into a very large market opportunity as an ageing population puts existing medical resources under strain, and the health industry looks to replace people with machine-based processes.” 

The analyst rates Avia as a ‘buy’ with a 78 pence target.

The Royal Bank of Scotland (LON:RBS) said in a research note that the widely reported potential for shale gas to revolutionise the UK’s energy mix makes companies like IGas Energy (LON:IGAS) look very attractive as offering a low risk unconventional alternative.

RBS said it does not believe that attractions of the IGas investment case will stay below investor’s radar much longer and sees significant upside from the current share price.

The potential of shale gas as an unconventional gas source has enjoyed extensive coverage in the media recently, and RBS said that IGas’ coal bed methane resource could make for an even better alternative as it is carrying less of a risk, in its view.

As the production of the UK’s conventional gas resources including those in the North Sea continues to decline, unconventional gas sources are likely to move into the into limelight as they could help the UK reduce its reliance on imports.

IGas is an already established part of the US and Australia gas supply mix and its coals are unlikely to need anywhere near the level of hydro-fracturing as the shale resource.

In addition to that, IGas’ coal bed methane resource of 807 billion cubic feet across its UK acreage carries a lower risk, according to RBS.

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