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Summary
- In June 2020, the retail sales in the UK increased by 13.9 percent month on month as reported by the Office for National Statistics. However, the sales were down by 1.6 percent year on year in June 2020.
- The UK’s PMI index increased to 57.1 in July 2020 from 47.7 in June 2020.
- Pantheon Resources is seeking farm-in partnership for the Alaskan projects.
- Pantheon Resources achieved upgraded resource estimates at one of the horizons in Talitha project.
- Rockfire Resources raised £1.0 million through the placement of new shares for funding the drill testing of Plateau gold deposit in Australia
- Rockfire Resources has planned to complete the magnetometer test at Copper projects in Copperhead and Copper Dome.
Given the above-market conditions, we would review two stocks - Pantheon Resources PLC (LON:PANR) & Rockfire Resources PLC (LON:ROCK). Pantheon Resources is an energy stock, whereas Rockfire Resources is a basic materials stock. PANR and ROCK were up by about 3.75 percent and 26.93 percent, respectively (on 24 July 2020, before the market close at 1.30 PM GMT+1). Let’s skim through their financial and operational updates to understand the stock better.
Pantheon Resources PLC (LON:PANR) – Balance sheet remained debt-free
Pantheon Resources PLC is a UK based energy company, which is engaged in the exploration of oil and gas projects. The Company has onshore projects in the North Slope of Alaska and East Texas. In North Slope of Alaska, the working interest of the Company is 89.2 percent to 100 percent along with working interest in Tyler & Polk Counties in East Texas. The Company is listed on the FTSE AIM All-Share Index.
Six months Interim results (ended 31 December 2019) as reported on 20 March 2020
The Company reported revenue of approximately USD 78,000 in H1 FY20, which was down from USD 356,598 in H1 FY19. The gross loss was USD 0.3 million, and the operating loss was USD 2.8 million. The loss for the period increased to USD 2.2 million from loss of USD 1.3 million due to the acquisition of Great Bear. As on 18 March 2020, the Company had cash of USD 6.1 million. In H1 FY20, Pantheon increased the stake from 75 percent to 100 percent in Greater Alkaid oil discovery. The Company acquired 25 percent working interest from Halliburton. In January 2020, more than 1 billion barrels of oil in place was estimated at Theta West and Leonis.
The upgraded resource at the Talitha project
Pantheon completed the analysis of shallowest of the three horizons at the Talitha project. The Shelf Margin Deltaic horizon is estimated to have 1.8 billion barrels of oil in place. The new estimates are better than the pre-analysis expectations. The development of the project is expected to yield NPV of USD 5.75 per barrel and a total NPV10 of USD 2 billion with a 55 percent internal rate of return. A total of 2.6 billion barrels of oil in place was previously estimated for all three horizons.
Pantheon Resources Summary
(Source: Company Website)
Share Price Performance Analysis
1-Year Chart as on July-24-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Pantheon Resources PLC's shares last trading at GBX 23.50 (as on 24 July 2020, before the market close at 1.24 PM GMT+1). Stock 52-week High and Low were GBX 23.80 and GBX 6.52, respectively. Pantheon Resources had a market capitalization of £113.81 million.
Business Outlook
The Company is mindful of the fall in oil prices and operational constraints on business due to the pandemic; however, it believes that the oil prices would recover. The Company is confident of the capital structure as it does not have any debt on the balance sheet. Pantheon Resources is seeking farm-in partner for the exploration of the Alaskan projects in which close to USD 200 million had been invested. Pantheon expects upfront cash contribution and funding of drilling costs from the farm in partners. The projects have attracted interests from a wide range of investors.
Rockfire Resources PLC (LON:ROCK) - Started six deep diamond drilling at Plateau gold deposit
Rockfire Resources PLC is a UK based mining company with a primary interest in gold exploration. The Company holds seven exploration permits for minerals in Queensland, Australia via its subsidiary BGM Investments Pty limited. The Company also owns 100 percent interest in Lighthouse tenement, Copper Dome and Copperhead. The Lighthouse tenement includes Plateau gold mine, Double Event and Cardigan dam. The Company is included in the FTSE AIM All-Share index.
Development at the Plateau Gold Deposit
On 20 July 2020, the Company reported that it had started 500 metres deep diamond drilling at Plateau gold deposit. Rockfire has plans to perform six drill holes to test the gold mineralization. The Company has implemented six drilling programme since October 2019. On 29 June 2020, the Company placed 117,647,100 new shares at 0.85 pence per share to raise £1.0 million. The Company's Non-executive director, Nicholas Walley, is the largest shareholder and subscribed 748,200 new shares, increasing his holding to 52,464,000 shares. The funds from the placing would be used for drill testing of Plateau along with a geological survey of Copperhead and Copper Dome. The Company has plans to drill deeper close to 500 metres and then to 750 metres from the surface. The Company realized low-grade gold from initial drills of 230 metres. At gold mine, Mt Wright, which is 47 kilometres from the Plateau, gold mineralization was seen beyond 300 metres.
FY2019 Annual results (ended 31 December 2019) as reported on 18 May 2020
In FY19, the reported loss narrowed to £0.6 million from loss of £2.0 million in FY18. The cash outflow from operations was £0.6 million. As on 31 December 2019, the Company had cash of £0.7 million. During the year, the Company raised £0.8 million through the issue of new shares, and £0.7 million through the exercise of warrants in FY19. Rockfire conducted few exploration activities in FY19 such as estimation of 51,000 ounces of gold at the Plateau and Double Event. The Company did 14-hole drilling at Plateau and discovered near-surface gold. The Company also conducted rock sampling at Copper Dome and discovered 23.4 percent Copper, 3.2 grams per tonne Gold and 952 grams per tonne Silver.
Asset Portfolio of Rockfire Resources
(Source: Company Website)
Share Price Performance Analysis
1-Year Chart as on July-24-2020, before the market close (Source: EODHD/Others, Thomson Reuters)
Rockfire Resources PLC's shares last traded at GBX 2.06 (as on 24 July 2020, before the market close at 1.31 PM GMT+1). Stock 52-week High and Low were GBX 2.40 and GBX 0.25, respectively. Rockfire Resources had a market capitalization of £12.22 million.
Business Outlook
The Company has started deep diamond drilling at the Plateau gold deposit and expects it to be completed within the coming months. The assay results are awaiting from June 2020 reverse circulation drilling programme. The Company is hopeful of discovering gold mineralization from deep drilling same as realized at nearby Mt Wright gold mine.
