Wednesday Morning news feat. Pacific Rubiales, Primero Mining, and Integra Gold

POSTED ON May 06, 2015 BY James Fraser
CATEGORY Integra Gold, Pacific Rubiales, Primero Mining,

Assets (oil blocks) of Pacific Rubiales (Image: Pacific Rubiales)

A look at my top news releases out this morning with some additional comments.

Pacific Rubiales - (PRE:TSX) - The bleeding has ended for long term Pacific Rubiales holders this morning as the company has received a takeover offer from ALFA SAB de CV and Harbour Energy Ltd. for $6.50 per share.

ALFA currently holds 59,897,800 common shares, representing approximately 18.95 per cent of the issued and outstanding common shares.

Pacific Rubiales, ALFA and Harbour Energy do not intend to provide further updates, except as required by applicable laws.

Shares of PRE can be had at $6.16 this morning a discount to the $6.50 offer price as the market is not 100% certain the deal will close.

Pacific Rubiales stock has been under pressure in the last year with the decline in oil prices and the decision by Ecopetrol SA to not extend the Rubiales and Piriri field contracts which expire in June 2016. Below is a 5 year chart of PRE trading mostly above $20 a share until October last year. Shareholders who bought recently will receive a nice premium as the 50 day moving average is $3.42. All other shareholders will most likely be taking a significant loss.

About ALFA

ALFA is one of the largest and most successful corporate entities in Mexico. ALFA is the largest independent producer of aluminum engine components for the automotive industry in the world and one of the world's largest producers of polyester (PTA, PET and fibres). In addition, it leads the Mexican market in petrochemicals such as polypropylene, expandable polystyrene and caprolactam. ALFA is the leading maker of cold cuts in North America and Europe, and of cheese in Mexico, as well as in information technologies and communication services for the business segment in Mexico. ALFA has participated in the hydrocarbon industry in the United States since 2006. In 2014, ALFA's consolidated revenue was over $17-billion, and earnings before interest, taxes, depreciation and amortization were approximately $2-billion. ALFA's shares are quoted on the Mexican Stock Exchange and on Latibex, the market for Latin American shares of the Madrid Stock Exchange.

About Harbour Energy

Harbour Energy is a permanent capital energy company formed by EIG Global Energy Partners and the Noble Group to own and operate a portfolio of high-quality upstream and mid-stream energy assets globally. EIG specializes in private investments in energy and energy-related infrastructure on a global basis and had $14.2-billion under management as of Dec. 31, 2014. During its 33-year history, EIG has invested over $16.4-billion in the sector through more than 290 projects or companies in 34 countries on six continents. Noble manages a portfolio of global supply chains covering a range of energy and other commodity products from over 140 locations and employing more than 70 nationalities. Noble was ranked No. 76 in the 2014 Fortune Global 500.

Read: PACIFIC RUBIALES CONFIRMS OFFER AND EXCLUSIVE DISCUSSIONS

Primero Mining (P:TSX) - Primero is out with a strong first quarter posting a net profit of $3.6 million on 61,073 gold-equivalent ounces produced. Year over year first quarter production was a 54% increase. The 54% increase was helped by the Black Fox acquisition completed on March 6,2014 and a record quarter at San Dimas.

San Dimas is operating above design and continues to carry Primero as changes are made at the Black Fox mine. San Dimas is a high grade mine averaging 5.01 grams per tonne in the quarter leading to 46,569 gold-equivalent ounces. The results at this mine are in the lowest quartile in the industry with an all in sustaining cash cost of 659 per ounce in the quarter.

Black Fox is transitioning to an underground mine and had all in sustaining costs of $1522 per ounce in the quarter. Optimization work is ongoing at Black Fox to improve operations and generate higher cash flow.

"Primero has delivered a strong start to 2015," stated Joseph F. Conway, chief executive officer. "Our platform San Dimas mine achieved record production levels and continues to exceed operational expectations, delivering significant cash flow for the company. I am extremely proud of our operating team for the success they have achieved at this mine, as it continues to show improved grades, higher throughput, lower costs and more operational flexibility. We are employing the same optimization approach used at San Dimas at the Black Fox mine, which is on track with underground development and is positioned to increase mined grade and improve cash flow from mid-2015 onwards. At a corporate level we successfully completed the convertible debenture financing early in the first quarter, ensuring that we have the financial capacity to invest and expand our assets in a volatile gold price environment. Our strong first quarter performance has positioned us to deliver the 20-per-cent organic growth planned in 2015, creating a period of strong cash flow and value creation for our shareholders."

Primero looks good with one mine in full swing and another one in the process of being turned around. When Black Fox reaches targets it could be the catalyst that sends the stock higher.

Hard to find gold companies making money but Lake Shore Gold, Primero, and Teranga are some names that fit the bill.

Read: Primero Reports First Quarter 2015 Results; San Dimas Achieves Record Quarterly Production

Integra Gold - (ICG:TSXV) - Integra is out with drill results from the 2015 Triangle zone extensional drill program in Quebec. Good news for shareholders as step out drilling continues to intersect gold mineralization. A s a result of the success Integra has increased the 2015 drilling program to 75,000m.

Highlights include:

TM-15-07 intersected 14.32 grams/tonne gold ("g/t Au") over 4.5 m in the T-10/C4 Zone, approximately 190 metres ("m") west of the closest previous intersection (TM-14-33 - 11.75 g/t Au over 13.0 m)
TM-15-09 (Zone T13a/C4) - 16.49 g/t Au over 2.0 m;
TM-15-14 (Zone T0a/C1) - 14.55 g/t Au over 6.0 m;
TM-15-16 (Zone T5b/C2) -- 9.78 g/t Au over 7.0 m;
TM-15-18 (Zone T6/C2) -- 6.05 g/t Au over 12.0 m;
TM-15-20 (Zone T11/C4) -- 13.44 g/t Au over 2.0 m;
TM-15-24 (Zones T0b/C1, T5/C2) -- 8.54 g/t Au over 4.0 m, 7.5 g/t Au over 5.0 m.

"With over 40,000 metres of drilling already completed in 2015 this was the busiest winter season in Integra's history and has significantly advanced Lamaque South. Today's results continue to confirm the significance of the Triangle Zone, with step out drilling successfully intersecting high grades over sizeable widths, hundreds of metres away from previous resource boundaries. The Triangle deposit remains open to the east, west, south and at depth and through ongoing exploration efforts continues to demonstrate its ability to grow," commented Company President and CEO, Stephen de Jong.

Integra remains one of the most active junior mining companies with over 75,000m of drilling planned for 2015 which will provide steady news flow.

I think the market would like to see the deposit get bigger and drilling so far is showing positive signs. Cash balance at the end of April was $19 million. Permitting is also under way on parts of the project that still require it.

Read: Integra Gold Intersects 14.32 g/t Gold Over 4.5 metres in Step-Out Drilling 190 metres west of Triangle Deposit, Increases 2015 Drill Program to 75,000 Metres

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This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence.

James Fraser

Mr. Fraser joined CEO.ca in October 2014. He is passionate about the mining industry. His passion led to co-authoring the e-book "Mining Stocks Investor Guide: A Guide to Investing in Mining Companies." He has a finance background and has completed his Canadian Securities Course (CSC) and Conduct and Practices Handbook (CPH). When Fraser is not "digging" up the latest mining stock, he can be found enjoying a wide variety of sports or travelling the world. More →

Twitter: @miningstocks

james@miningstocksguide.com

James Fraser

Twitter: @miningstocks

james@miningstocksguide.com

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