$GDXJ #gold December adds still outperforming

From BMO: Quantitative Execution Services
Monday, October 20^th  

GDXJ gold December adds still outperforming

 

Since last week's announcement the GDXJ junior gold additions have outperformed by ~5%.   The index change will cause the addition of larger gold companies into the GDXJ ETF in December.  

 

See up to 15 new additions to GDXJ

We currently see 13 eligible additions and 2 close to the threshold.   The actual event is far-off but considering the sheer size it is not surprising there is already impact.  The GDXJ will need to buy ~10% addition floats in December or approximately U$800M.  

 

Will like behave like the GDX rebalance in 2013?

This index change reminds us when the GDX Gold ETF allowed for non-US listed companies to be added in September 2013.  It was also a significant index change and we saw the adds outperform from announcement (August 2013) until several weeks past the rebalance.  

 

See below for chart of GDXJ adds vs GDXJ and table with company specific performance.

 

 

 

#Tamar: Another deal signed to bring #Israeli #NaturalGas to #Egypt - #MasterEnergy

How times change: Pipeline carried gas from Egypt to Israel for several years until
saboteurs began thwarting the flow through Sinai pipeline explosions.

By SHARON UDASIN 

10/19/2014 13:48

A man points as he stands on a tanker carrying liquified natural gas,
ten miles off the coast from Hadera. (photo credit:REUTERS) 

Turning the tables on the region’s natural resource flow, Israeli gas
may soon surge southward through the Egyptian pipeline that for several
years provided gas to Israel – but fell victim to saboteurs in Sinai.

The
developers of the 282-billion cubic meter Tamar reservoir, which has
been supplying gas to Israelis since March 2013, have signed a letter of
intent to sell 2.5 b.cu.m. annually to the Egyptian firm Dolphinus
Holdings Limited, the Delek Group reported to the Tel Aviv Stock
Exchange on Sunday morning. This gas surplus sold to the Egyptian firm
from Israel’s local supply will begin serving private industrial
consumers already in 2015, according to the partners.

The move
looks to revitalize Egypt’s East Mediterranean Gas Company pipeline that
for several years carried gas from Egypt to Israel. In 2008, EMG began
supplying Israel with about 40 percent of its natural gas provisions,
until saboteurs began thwarting the flow through Sinai pipeline
explosions. Following 14 months of such attacks, the Egyptian government
formally terminated the agreement between EMG and Israel in April 2012.

At
Tamar, located about 80 km. west of Haifa, Noble Energy holds 36% of
the basin. Delek Drilling and Avner Oil Exploration each own 15.625%,
while Isramco owns 28.75% and Dor Gas owns 4%.

The neighboring
621-b.cu.m. Leviathan gas reservoir, about 130 km. west of Haifa, is
expected to begin flowing in 2017. Noble Energy owns 39.66% of
Leviathan, while Delek Drilling and Avner Oil – both subsidiaries of the
Delek Group – each own 22.67% and Ratio Oil Exploration holds 15%.

The
realization of the project will help maximize the production
capabilities from the Tamar reservoir, and will strengthen the Israeli
economy by increasing tax and royalty revenues, said Delek Drilling CEO
Yossi Abu.

Sunday’s announcement joins a number of other regional
agreements and understandings that the Tamar and Leviathan partners have
signed with Israel’s neighbors.

In September, the Leviathan
reservoir partners signed a letter of intent to sell 45 b.cu.m. of
natural gas to Jordan’s National Electric Power Company over a 15-year
period.

Empty liquefaction plants in Egypt have become an
attractive option for Israeli gas. The British Gas Group signed a letter
of intent with the Leviathan partners for the 15-year supply of 105
b.cu.m. of natural gas to its Idku plant.

Meanwhile, in early May,
the Tamar reservoir partners signed a letter of intent with Spanish
firm Unión Fenosa, for the provision of 71 b.cu.m. to that firm’s
liquefaction facility in Damietta.

In January, the Leviathan
partners signed their first export deal – a $1.2b. sales agreement with
the Palestine Power Generation Company.

According to the
agreement, PPGC is set to buy around 4.75 b.cu.m. of gas over 20 years,
to fuel a future 200-megawatt power plant in Jenin.

A month later,
the Tamar reservoir partners signed a $500 million deal to provide 1.8
b.cu.m. of gas to the Jordanian firms Arab Potash and Jordan Bromine, to
power their Dead Sea facilities for the next 15 years, beginning in
2016.

As far as Sunday’s letter of intent signed with Dolphinus is
concerned, this latest deal is “another important link in a sequence of
agreements that will enable the supply of natural gas to the domestic
market in Egypt,” said chairman of Delek Drilling and CEO of Avner Oil
Exploration Gideon Tadmor.

“I have no doubt that these are agreements that will strengthen the relations between Israel and its neighbors,” Tadmor said.

Read the article online on the Jerusalem Post website here: Israeli partners sign bid to sell natural gas to Egyptian firm

#Orbis Gold - Updated scoping study sees step change at Natougou; $OBS : ASX #Canaccord reiterates SPECULATIVE BUY and raises target to A$0.87 from A$0.54

This is the latest note out from canaccord on Orbis Gold which received a takeover offer from Semafo (SMF CN)

Orbis Gold Limited
OBS : ASX : A$0.62 | A$188.0M | Speculative Buy, A$0.87 ↑

• Updated scoping study sees step change at Natougou; reiterate SPECULATIVE BUY and raising target to A$0.87 from A$0.54

Reg Spencer, +61 2 9263 2701

Investment Perspective 
An updated scoping study for Natougou has revealed a far more valuable project than we had previously estimated, highlighting what was clearly an opportunistic approach from SEMAFO earlier this week. OBS is now likely in play, and a vastly improved Natougou could bring other suitors to the table, but at the same time potentially lead to improved financing options should OBS opt to develop the project on its own. Short-term financing risks, should the Greenstone financing not proceed, are temporary in our view, and with OBS now the peer group leader with obvious M&A appeal, we reiterate our SPECULATIVE BUY rating. 

Investment Highlights 

• OBS has released the outcomes of its updated Scoping Study for Natougou, revealing a significantly optimised project capable of producing up to ~700koz in the first 2 years of production. The key changes to project parameters versus the 2013 scoping study include 1) increased resource inventory of 13 Mt at 3.5 g/t, 2) 10% lower LOM strip ratio of 11.7:1, and 3) optimised mine design and grade profile which sees an average grade of +6 g/t in the first 2 years.
• Establishment capital estimates are mostly unchanged at US$234m with increased infrastructure costs offset by a 60% reduction in waste pre-strip costs resulting from an optimised mine design. Our slightly more conservative LOM AISC estimates fall ~2% to US$699/oz versus OBS' scoping study estimates of US$619/oz.
• The revised project parameters deliver a vastly improved project, with increased FCF (up to US$290m in year 1 alone) and rapid payback (CGAu est ~10 months) among the key highlights. Upcoming project milestones include resource upgrades (1H'15) and completion of the DFS and project permitting in mid'2015.

Reiterate SPECULATIVE BUY rating; Target revised to A$0.87/share 
Following the release of the updated scoping study, we have revised our modelled production assumptions for Natougou to be in line with the study results. We have also revised our development financing assumptions for an increased price at which we assume OBS raise equity (JunQ'15, A$85m, $0.50), and left unchanged our assumption that the Greenstone Resources financing (US$20m, A$0.42/share, DecQ'14) proceeds to completion, but note the high risk to this following recent share price performance. The net impact is a significant upgrade to our target price (fully diluted NAV) to A$0.87/share from A$0.54/share.

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