Companies: CLF    CNM    HDY    HNR    POG    SCR    TLW   

Gold’s fall below $600 an ounce and oil’s testing of six-month lows have combined with political uncertainties, notably in Russia, and institutional satiety to produce a more astringent climate.

Russian gold miner Peter Hambro Mining, recommended here at 461p three years ago, has fallen a third since we suggested partial profit taking at £15.34p in April, despite a 130 per cent first-half profits leap to £9.6 million, as rising prices reinforced a six per cent production increase. Cenkos Securities’ planned £15 million Diamondcorp float has been postponed, with a private funding first.

Former star-performing Australian miner Consolidated Minerals is down nearly two thirds at 66.5p, despite targeting an increase in voguish nickel production Down Under from 4,500 to 15,000 tonnes within five years. With more than £30 million cash and 20 per cent gearing, the company has suffered unduly from its manganese exposure and the departure of previous boss Michael Kiernan – whose own Aussie-quoted Monarch Gold’s AIM move should be well received next month – and should rally if sector sentiment allows.

Opportunism in oils
Tullow Oil has taken the opportunity of a nervous oil market to bid a recommended £581 million for its Uganda exploration partner, AIM-quoted West Africa and Falklands-focused Hardman Resources, worth nearly 78p, 50 per cent above its pre-bid price and several times our 2003 recommendation at 18p. Tullow, at 355.5p, is 85p off its May peak and may take some time to recoup lost ground.

Hardy Oil & Gas trades at 287p, nearly £1 off its May high, even after a recent uptick on interim profits ahead 50 per cent and June cash up 60 per cent to £28.5 million, helped by a £14.7 million placing at 283p. Concentrated on India, Hardy, working on a $50-a-barrel oil price, plans a 30 per cent production increase to 8,000 barrels a day by December 2007 and aims to expand by exploration and acquisitions. It could outperform some sector peers.

Drilling cheer for South China
South China Resources claims it has found a ‘new high-grade copper and molybdenum zone’ at Danfeng in China’s Shaanxi Province. The AIM-quoted company says copper intercepts in Danfeng’s south-west licence area include 21.4 metres at 1.02 per cent copper and 1.6 metres at 2.35 per cent copper.

South China is drilling at the north-eastern zone of Danfeng, where its first drill hole has intersected ‘109 metres of pervasive molybdenite mineralisation’. The company’s volatile shares, recommended by Growth Company Investor as a speculation earlier this year at 8.8p, have now reached 17p, where partial profit-taking might be prudent.

Cluff on expansion trail
AIM-quoted Cluff Gold has increased resource estimates at Baomahun in Sierra Leone 70 per cent to 880,000 oz. The company, whose interim losses rose 89 per cent to £1.1 million, ended June with £13.4 million cash after a US-supported placing at 68p and says drilling at Baomahun suggests ‘potential for a high-grade multi-million-oz gold deposit’.

Exploration at Angovia in Cote d’Ivoire is yielding encouraging results and Cluff is negotiating project finance for its Kalsaka gold project in Burkina Faso. At 73p, with hints of a possible gem spin-off, the shares have risen 54 per cent since Growth Company Investor’s mention last November but retain some speculative spice.