MARKET REPORT: Cluff spruces up after hard year

By GEOFF FOSTER FOR MAILONLINE
Updated:

Anything corporate that serial entrepreneur Algy Cluff has touched over the past 40 years or so, more often than not, has turned to gold.

Cluff Gold is currently the fourth eponymous company from the man who made a fortune in North Sea oil in the 1970s and the chances are that those investors who followed him in, will strike it lucky soon.

With gold assets in varying stages of development in Burkina Faso, Sierra Leone and Cote d'Ivoire, word is Cluff is about to come good after a difficult 2009 and make itself a delicious acquisition target for any one of the cash rich mining giants.

Gold bars

Fourth time lucky: Cluff Gold is the fourth offering from the man who made a fortune in North Sea oil and investors should strike it lucky soon

The shares edged 0.5p higher to 59.75p on hot gossip that a bullish scoping report on its flagship Baomahun project in Sierra Leone will be published before the end of the week. Cluff hopes to be producing 300,000 ounces of gold from the project by 2012, which then can be added to the minimum 100,000 ounces expected from its two other mines.

Driving production forward at Cluff is chief operating officer Peter Spivey. The Kiwi recently joined from BHP Billiton and immediately made a huge impression.

Should a mining major come calling, he would probably be asked to stay and continue the good work.

 

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Analyst Charles Kernot at stockbroker Evolution Securities has a 124p target price on Cluff.

Perhaps Cluff could even be on the radar of Randgold Resources. Shares of the Africanfocused group soared 271p to 4427.7p after posting better-than-expected results. It also said it planned to raise its full-year dividend by 30 per cent to 17 cents a share and brought forward the expected start up of production from its Kibali project by a year to January

Randgold's excellent figures and Xstrata's (33.8p better at 965.88p) decision to return to the dividend list this year after not paying one for 18 months, gave the sector a big lift. Fresnillo rose 35.5p to 694.18p, Kazakhmys 33p to 1240p, Lonmin 47p to 1783p and Eurasian Natural Resources 21.5p to 902.78p.

Heavyweight miners contributed 14 points of the Footsie's 31 point gain at 5,092.33 although overall sentiment remained nervy awaiting news of a Greek solution to its debt problem. Concern over the deteriorating government finances in Europe also unsettled Wall Street which opened 60 points lower.

Shares of inter-dealer broker Icap, which plunged on Friday following a shock profits warning which came only a few weeks after founder and chief executive Michael Spencer had sold a shedload of stock at 440p a share, rallied 9.7p to 305.85p. Credit Suisse reckons the 30 per cent decline in the stock this year offers an attractive entry point for investors.

Insurance stocks came under renewed pressure amid growing concerns about their hefty equity portfolios should the market take a further turn for the worse. Legal & General shed 2.6p to 71.41p, Aviva 9.4p to 355.89p and Prudential 14p to 556.5p. Clive Cowdery's Resolution, which is said to have cooled its interest in L&G, gave up 1.55p to 77p.

Stockbroker Brewin Dolphin rose 5p to 134.9p after Altium Securities reiterated its bullish stance and target price of 180p. Rival Evolution Securities cheapened 3.6p to 111.1p with sentiment still unsettled by recent management defections.

Israeli telecoms equipment group BATM fell 8.5p to 45p following disappointing annual results. Full year profits slumped 22 per cent and the board says it remains cautiously optimistic about 2010. Altium downgraded to sell

Persistent private client buying on the back of an investment recommendation helped urology group Plethora Solutions rise 2.5p to 15p. Analysts are bullish about PSD502, its treatment for premature ejaculation.

Bio-pharma group Lipoxen edged up 0.5p to 8.75p after being granted patents for its StimuXen technology in six European countries, including the UK, Germany, France, Spain, Italy and Switzerland.

Healthcare real estate developer and investor CareCapital Group jumped 1.5p to 4.13p on hearing it has sold part of its UK property portfolio, comprising 14 primary care investment properties, to Primary Health Investment Properties for £23.5million cash.

First Property, the commercial property fund manager, improved a penny to 17.25p after launching a new UK commercial property fund with a cash commitment of £108million on behalf of UK pension clients of Stamford Associates, an international investment consultancy firm.

News of the group's £15million-plus earnings enhancing acquisition of certain assets of Cambridge Laboratories (Ireland) and Cambridge Laboratories helped Alliance Pharma climb 4p to 30.25p. Almost 29m shares were placed with old, and four new, blue-chip institutional investors at 26p a share to raise £7.5million towards the cost. Lloyds Banking Group provided an additional £4m term loan.

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