Very good news today - confirms my best hopes - moving north

Media comment, click HERE

media comment, click HERE

Loooking good!

More news, click HERE

Comment, click HERE

Market reaction a bit disappointing but I much prefer steady progress

Leyshon Resources Lifts Pace Of Development Of Zheng Guang Mine





The operations of Leyshon Resources have always been a classic for a company exploring and developing projects overseas. The managing director Paul Atherley lives in Beijing as does the chief operating officer and the company has an office there. Most of its employees speak either Mandarin or native Chinese and Dr Ye Dong Pink was recently appointed as manager for the Zheng Guang gold zinc project in the province of Heilongjiang in the northeast of China. To cement relations in China even further it has the Qiqihaer Brigade of the Heilongjiang Bureau of Geology and Mineral Resources as its partner and it is proving very supportive. The Brigade has more than 4,000 technical staff as well as a fleet of drill rigs and a range of laboratory and other technical services at his disposal which makes life considerably easier for Leyshon.
His company could not be in China at a better time as it has opened its previously state owned gold mining industry to foreign investment with capital and operating costs probably the lowest in the world. In the next few years it is predicted to become not only the worlds foremost producer, but also the worlds biggest consumer. In 2006 it overtook Australia to become the 3rd biggest producer with 240 tonnes of gold and this year is showing a further improvement. In 2006 also it consumed 259 tonnes and now sits not far behind the US and India with consumption rising in each of the last four years. Its Shanghai Gold Market turned over US$25 billion last year and its increasing sophistication is reflected in the start of gold futures trading.

What a background for moving up the league table from explorer to producer with gold circling around the US$800/oz mark. Back in March the company reported a JORC compliant recoverable resource estimate of 1.21 million ounces of gold, 3.72 million ounces of silver and 94,000 tonnes of zinc based on the successful drill programme carried out in 2006. Overall gold equivalent content was increased by 43 per cent and more than half of the previous inferred resource was upgraded to the indicated category. The gold equivalent of this resource estimate is more than 1.7 million ounces and the discovery cost to date has been less than US$5 per ounce.

At the time when Rob Davies last wrote about the company back in May a decision had just been made to go ahead with a mine. Not for Leyshon the Canadian policy of drilling a project to death first: all that it wanted is a reserve large enough warrant the capital cost and a plant so simple and scaleable that capacity can be increased later at a reasonable additional cost. Doing it this way keeps the initial capital cost to a minimum and in the case of Zheng Guang the current estimate to build the mine is US$50million. The company has A$18.2 million in cash and no debt and has received a number of expressions of interest from prospective financiers offering equity and debt to fund the projects development. Once the capital and operating costs have been finalised early in the new year the funding will be finalised.

Independent metallurgical consultancy Metallurg of Australia has been working on the process route development and has reported that there will be no requirement for mining and treating separate ore types; meaning that a single gold/zinc sulphide ore can be supplied to the plant which will have significant capital and operating cost benefits. The proposed process route has a separate carbon in leach circuit for the gold oxide ore which will produce a gold and silver dorbar for and a flotation circuit for the gold/zinc sulphide ore which will produce further gold and silver dorbars from a high intensity leach reactor and a saleable zinc concentrate. Chanchung Design Institute continues with basic engineering design under the direction of Dr Ye Dong Ping and the aim is to have the design completed early next year. In order to maintain the momentum, orders will be placed shortly for ball mills and other major long time items.

The approval processes are being led by Ye Dong Ping working closely with the Brigade. Under an agreement signed during the year with the Municipal Government of Ai Hui District, Zheng Guang has been designated as a top priority project which will expedite the approvals for access, land use, road construction and the supply of water and electricity. Feasibility studies and other reports completed by the joint venture in accordance with regulatory requirements have been completed and approved by the relevant authorities. The processes are well advanced with various reports submitted and meetings attended with a view to having all necessary approvals in place to enable construction to commence in early 2008.

All this time Leyshon has continued with its infill and exploration drilling and the results have been most encouraging with broad widths of good grade mineralisation being intersected as predicted between important sections of the Main Ore Zone. As a result Paul Atherley is confident that the bulk of the resource will be upgraded to measured and indicated status ahead of development in 2008. So confident is he of the whole project that the latest news is that the ball mills have now been ordered from a leading Chinese engineering group at a cost of US$2 million and the local power authority, Nenjiang Power Bureau, has been contracted to engineer the supply of 10 MW of electrical power from the local grid via 35KV high voltage overhead transmission lines. Moving into 2008 at a gallop.

What an excellent and constructive post aldwickk - did you research and compose it ?
Many thanks anyway

No Oak not that good, copy&paste from todays Minesite.

ps ...... i live on the south coast, between Chichester and Bognor.

Nice steady rise which is the way I like it before we gallop into 2008 !. I cant get the hang of "copy and Paste" We are directly opposite the Needles.

Leyshon are presenting in London on 13th February 2008.

Details and FREE registration click HERE

great article ! HERE

And another one HERE

lrl 3.75p ! - white night to the rescue please

This is looking to be very positive for next year, and who knows what the Gold price might do next year when the global economy finally goes pear shaped.
Great write up by Wendy.
http://www.proactiveinvestors.co.uk/companies/news/3584/-leyshon-resources-battening-down-the-hatches-3584.html

Shares Magazine invites you to join us at our own special ‘Meet the Markets’ event at the World Money Show (London) 2012.

On Saturday 3rd November 2012, Shares Magazine will give you the opportunity to meet, hear from and ask questions of key senior management figures from carefully selected companies. This event offers a unique opportunity not only to hear about the latest plans from some of the most exciting companies in the sector, but also to put your questions to the people that matter.

The event is tailor-made for private investors who already have exposure to AIM listed stocks, or anyone who is considering putting money into these exciting and dynamic sectors.

By registering NOW not only do you get the opportunity to join us at our own special Shares event, you also get FREE entry to the World Money Show itself, where you will get a chance to listen and talk to leading investment and trading experts with insights on the hottest trends, global market perspective, income Investing, spread betting, CFDs, Forex, ETFs and asset allocation.


REGISTER NOW


Date:

Saturday 3rd November 2012

Venue:

The Westminster Suite (4th Floor)
The Queen Elizabeth II Conference Centre,
Broad Sanctuary,
Westminster,
London
SW1P 3EE

Presentations:
11.30am to 1.30pm

Companies Presenting:

GETECH GROUP PLC
GETECH's (GTC) is a leading global consultancy to the oil, gas and mining industries. We assist our clients, who include the major international oil companies as well as many independent and National Oil Companies, to reduce the risks and improve the efficiency of their early stage exploration programmes. We are differentiated through our unique global library of gravity and magnetic data and our multidisciplinary teams of highly skilled geosciences staff. We pride ourselves on scientific rigour and thought leadership. These have now led to the development of our flagship product, the “Global Programmes” for which we currently have six contracted clients, who commit to a multi-year strategic programme of which the initial phase is due to complete in mid 2014.

LEYSHON RESOURCES LTD
Leyshon Resources Limited (AIM & ASX:LRL) was on the ground in 2003 when China opened its mining sector to foreign investment. It has been fully engaged in China since then with its main operating office located in Beijing.
China's latest Five Year Plan emphasizes the planned urbanisation of a large number of Central China's rural population into second and third tier cities lifting the urbanisation rate to 51.5% of the overall population.
This will result in significant increases in infrastructure spending and energy demands. The Company is planning to invest in high quality energy assets in China to meet this growing demand.

Speaker: Paul Atherley, Managing Director.

TERTIARY MINERALS PLC
Tertiary Minerals (TYM) is an AIM-quoted mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries and traditional Chinese supplies are drying up as China evolves from a large net exporter to a potential net importer.


REGISTER NOW

For more information on the World Money Show (London) click here

Leyshon Resources presents at the 91st Minesite forum at the Brewery.

Click the link to watch.

http://www.brrmedia.co.uk/event/105651/paul-atherley-managing-director

On the move upwards. The CEO has presented at 3 of our Investor Evenings and was our Shares 'Play of the Week' 2 weeks ago.


Their October presentation here:

http://img.moneyam.com/pdf/mrq-october-2012-investor-evening/leyshon.pdf

Another very blue day :-0)

Further progress today.

Well Im partially out at 18p bought at 11.4

Quite a day!

Wish i hadnt sold at 18p now its at 25p but glad i kept some!!

Excellent RNS on ASX.

Aussies can deal 12hours before us.

Aussies are dealing as and now.........

Have they found some gas play.

Yes found gas but not defined flow rates etc. Testing goes on into Dec.

Also another drill to start shortly, aimed to reach TD by year end.

Anyone in these? LRL have $50m in cash and interesting JV with PetroChina.

Was! Now out awaiting clarification. Also on what is going to happen with the expected second drill prospect, as plans might change depending on what the clarification of the first drill reveals......

Yep still in these!!

Net value to LRL $1bn v Mkt Cap about $50m (LRL have $42m cash). Put some in my ISA today. gla

Going up again!

What is ? :-))

After 9pm please. lol

:-0)

I have learnt you have to be very careful with your words on here. lol.
Thats not allowed a 15% rise, well done

I am still at a loss as to why Camac made "all the same excited noises" as the recent LRL RNS for their ZJS-02 and ZJS-03 wells and as far as I can see they struck on appraisal well ZJS-04 gas again....... but then they decided to flog it off cheap to LRL.

They obviously think it has a little potential, because they wanted 10m LRL shares as part of the deal (at the time worth about 1.2m GBP) as well as cash of 2.5m US$.

But if the license were so prospective why did they sell it so cheaply.... one minute saying it has up to 3TCF of gas in place which would give 300 BCF of recoverable gas, and then next minute they flogged it to LRL cheaply, straight after appraisal well ZJS-04 it seems ??




.


All looks a bit rampy to me............ pump and dump feel.

I mean, Camac drilled 4 wells and then gave up drilling ZJS-05, they sold it to LRL who have just drilled it, and made the same excited noises Camac did before.

Why are there no porosity figures in the results ? They just say "relative" high....... relative to what ? And also no permeability figures........ permeability is the key to flow.

So I am at a loss as to why so little information and so much ramping of a share in a company who just purchased the license area cheap from Camac who claimed there was 300 BCF recoverable gas from up to 3TCF of gas in place - but then after drilling 4 wells and finding gas, which was not commercial, they flogged it off to LRL cheaply ??? Who have now just drilled the 5th well.

Pointers all pointing to noncommercial flow rates ? Who knows - just it all looks funny to me.

Proselenes; I suppose Camac's statement probably explains why:


"CAMAC Energy is pleased to execute this definitive share sale and purchase agreement with Leyshon Resources for the sale of our Chinese assets," said Chairman and CEO, Dr. Kase Lawal. "In addition to providing a cash infusion and a shareholder interest in Leyshon, this transaction also eliminates the Company's future financial obligations for overhead and exploration expense in China. All proceeds and savings will be reinvested in our African exploration projects. Finally, I'd like to thank all of our employees in China for their years of dedicated service, and I wish them well as they join the team at Leyshon Resources."

Not really, one minute you are saying 300 BCF recoverable in the license, the next you drill 4 duff wells which include 1 duster and 3 with exciting gas pay which ends up as nothing - the next you are divesting of it to focus on Africa.........

No, the 300 BCF where you hold the license would be more interesting than Africa, if you really believed it held 300 BCF recoverable of gas from the 3TCF of gas in place potential.

They seemed happy enough to take 10m shares in LRL.

If you look at upsides then taking the previously stated Camac figure of potential 300 BCF recoverable in the whole license area and that this is going to be compartmentalised then :

Each well might target around 50 BCF recoverable pockets of gas - could be less or more, less is more likely but lets go with 50 BCF for each pocket.

50 BCF valued at 2 US$ in the ground with a 60% work in for LRL (lets ignore 30% tax on profits/royalty etc..)

50 BCF x 2 US$ in the ground = 100m US$.

60% work in = 60m US$

Convert at 1.61 = 37.2m GBP


So the value of ZJS-05 based on it finding a 50 BCF recoverable pocket of gas with commercial flow rates is around 14.9p a share.

I think its fair to suggest that they hit one sixth of the estimated recoverable gas in the license area (300 BCF total recoverable and that is a fair figure from the previous license owner considering tight gas plays like this have very low recovery factors, multi TCF gas in place ends up as hundreds of BCF recoverable) The work plan for LRL is drill, log, case, frac and flow test for each of its 3 wells, and so you cannot expect a single well to extract a lot of gas, it will have a very limited drainage area. (Yes they are planning cased hole fraccing)

Add on 12p cash per share and you get 27p a share so there is some upside to the share price from the present 19p.

As much as finding one pocket will derisk other leads, this is tight gas territory and so (as Camac found out who drilled 4 wells, had 3 with gas and those 3 all uncommercial and then they sold this license to LRL for the equivalent of 2.7m GBP) its not easy to hit net pay.

Of course, I may be using overoptimistic figures on a pocket of 50 BCF, it might only be 25 BCF or 10BCF, which brings the share price projection downwards, but even at 25 BCF there is atiny amount of upside to the current share price (25 BCF would give 7.5p +12p cash = 19.5p a share)

But everything hangs on can they get commercial flow - and if yes - then how big is this in RECOVERABLE gas terms ? Is it 5 BCF, or 10 BCF or 25 BCF or even 50 BCF ?

Do not get fooled by the ramping of TCF figures of "GIP" thats "Gas in Place". This is tight gas territory and the recovery factor is very low (recovery being how much gas you can get out of the ground from your GIP figure).

The downside is protected somewhat by cash, so if they get poor results from this ongoing well under testing now (results due year end) the downside is perhaps a 45% fall from the present price and then recovery back to around 12p a share level).

Below is from Camac (the previous license owner when they were all excited by the license, prior to selling it to LRL after their many failed wells).



.

Surrounding fields were multi TCF finds. Drill crew that made those discoveries left those fields to join LRL and are currently leading this drilling campaign.

lizard, many surrounding fields of multi billion oil finds are puddles of oil. This is generally why the big boys are in the surrounding ones and the little boys play in the leftovers which the big boys are not interested in.

You see above, the slide from the owner of the license who drilled 4 wells in it. They claim "possible 300 BCF recoverable". But they did not find it.

Have you seen LRL make any claim to "recoverable gas" ? When nobody is saying anything you have to take the public available data as your lead, here is the past owner of this license saying "possible 300 BCF" recoverable - which they then sold this whole license for circa 2.7m GBP equiv.

'big boys are not interested' LRL's partner is major PetroChina. The fields surrounding Zijinshan are Multi TCF which would attract any major energy business.

Their partner is not PetroChina as such.........

LRL hold this 100% and PetroChina have back in rights. This is the way China works, their big state owned companies have back in rights everywhere.

You hit paydirt, they back in.

You find uncommercial gas they let you pay 100% costs........... Its called "risk free" exploration for PetroChina - they spend no time and no money exploring, if someone else gets lucky then they get 40% thank you very much.

Simple.

That should be the way... not like Egypt with Centamin... no wonder they are always protesting.

Interesting, a poster on III has said that on average Sino quote 2 BCF recoverable per well.

So using that figure lets work it out.

2 BCF from ZJS-05

After back in LRL are left with 60%.

60% of 2 BCF is 1.2 BCF net to LRL.

Lets say taking off uplift costs they get 6 US$ per MCF.

1.2BCF is therefore worth 7.2m US$ before tax and royalty.

So lets say 5m US$ after tax/royalty which is 3.1m GBP or 1.2p a share.

So its looks that ZJS-05 success = 1.2p a share to LRL.

So cash + 1.2p a share = 13.2p a share - then why is this at 18p a share BEFORE success at ZJS-05 and flow rates.

Each well they drill, that has success and can flow commercially will add a further 1.2p to the share price it seems, if they can get the "average' of 2 BCF recoverable from it.

And given Camac drilled 4 dusters - success is not a given.

Thats the trouble with very tight gas area's, the fraccing can only work so far from the well bore - and so you get very limited recovery per well drilled.

Wonder how the market will react if LRL say we have good commercial flow and can now extract 2 BCF of gas from this well - will it trigger mass sell off ?

All eyes should therefore not be on flow rates - all eyes should be on the company coming up with a recoverable figure for the ZJS-05 well.

Will they say the expect 2 BCF recoverable from it ? or more ? or less ? or will there be silence on it and nothing said ?

I think Sino are valued about $500m about 10x LRL although more advanced in drilling phase.
CAMAC wells are yet to be tested, LRL wells are in a different location. Neighbouring fields are 12 TCF.

Does not matter what neighboring fields have - why do you think this one was left unexplored and with 4 dusters drilled in it.

You will often find duff area's next to very good one.

RKH has lots of oil, DES drilled a load of dusters and found a pissy bit of oil.

RKH is valued very much higher than DES - are you suggesting DES should be valued the same as RKH just because its next door ?

Suggest you watch last weeks presentation.

http://www.leyshonresources.com/investors-centre/presentations

Does the presentation tell you how much recoverable gas there might be in the license area ?

Does the presentation tell you how much recoverable gas there might be from this well ?

If the answer to both is no then you have to use information from Camac and Sino.

Camac estimated there MIGHT BE, COULD BE, etc... 300 BCF recoverable in the whole license area.

Sino say they get on average 2 BCF of gas from each well, as the drainage area is small because of the tight nature of the play.


So I suspect this well will get "2 BCF of gas" IF IT flow commercially which is worth less than 2p a share by my calculations earlier.

How could they tell us that when they have not yet completed testing 'multiple gas pay zones'. I believe you have a history not least with FOGL now look at that.

2p per well would be very good, i think PA mentioned they could sink 90+ wells. Drilling is very cheap in the region and major PetroChina have a buy in option at 40% WI.

The drill team has 11 out of 11 wells drilled are all commercial discoveries in the area, they have left to joining LRL to undertake this drilling campaign.

You have to do some pretty basic arithmetic to get a handle on things and why Camac said possible 300 BCF as the potential total recoverable gas from the Zijinshan license.

Were they being conservative ? or optimistic and talking up their asset before selling it ?

Well the Zijinshan Production Sharing Contract located on the eastern fringe of the prolific Ordos Gas Basin in Central China, has gas in place estimates in the range 1 to 3.8 Trillion Cubic Feet (tcf).

Tight gas reservoirs generally have average recovery rates of 6% to 10% of the Gas In Place (GIP) as recoverable gas (the gas that can be extracted, the rest stays is the ground and is not recoverable).


So, where did Camac get their 300 BCF from ?

It looks to me like they have used perhaps a 3 TCF gas in place figure and a 10% recovery rate - so you end up with 300 BCF recoverable from the whole Zijinshan license area. But thats using pretty much top line figures........... eg its being very optimistic imo.

Lets run through :

Worst case - nothing recoverable - zilch.

Cases using available figures and success in flow testing -

6% of 1 TCF so max production 60 BCF needing around 30 wells.

6% of 2 TCF so max production 120 BCF needing around 60 wells.

10% of 1 TCF would be 100 BCF needing around 50 wells.

6% of 3 TCF would be 180 BCF needing around 90 wells.

10% of 3 TCF would be 300 BCF needing around 150 wells.


Earlier calculations by me came to 1.2p per successful well for LRL, this is based on Sino figures who say each well can on average recover 2 BCF of gas (the draining area is very small per well due to the tight reservoir nature).

(2 BCF per well / After back in (if taken by PetroChina, LRL are left with 60%.
60% of 2 BCF is 1.2 BCF net to LRL.
Lets say taking off uplift costs they get 6 US$ per MCF.
1.2BCF is therefore worth 7.2m US$ before tax and royalty.
So lets say 5m US$ after tax/royalty which is 3.1m GBP or 1.2p a share.
So its looks that ZJS-05 success = 1.2p a share to LRL.)

But each well costs around 1.7m US$ to drill (100% basis) and then with corporate overheads, admin costs and any bonus payments, share plans etc... lets call it around 1.2m US$ per well net to LRL to drill taking in overhead/admin costs and a 60% cost contribution (PetroChina backing if for their 40% cut). Lets add this in to the equation.

2 BCF per well, after back in LRL have 60%.

60% of 2 BCF recoverable per well leaves 1.2BCF.
Lets say they sell this for 6 US$ per MCF after taking off uplift costs.
After tax, royalty lets say they are left with 5m US$, and now take off 1.2m US$ for costs of drilling the well, company overheads, admin, director salaries etc..
That leaves a pure 3.8m US$ profit per well which is circa 2.36m GBP.

2.36m GBP per well profit is 0.94p per share incremental rise in share price per successful well drilled (based on the assumptions stated).


So 12p cash in the bank.

If ZJS-05 well flows well it adds to this to give 12.94p valuation (12+0.94)

If the next 2 wells are also good this moves to 14.82p valuation (12+0.94+0.94+0.94)

If they just get 6% of 1 TCF then thats 12p cash adding on 30 wells at 1p each gives 28.2p extra totaling 40.2p a share after all the 30 wells on this case are drilled all over the license.

Their best case appears to be 150 wells drilled which would give 12p cash and then 150 x 0.94p per well totaling 153p a share, once 150 wells are drilled in ? years.

But at the early stage my my calculations each successful well is worth 0.94p to be added on to the cash of 12p a share.

And given this license already has had 4 non-commercial wells drilled on it, one success (if this well flows commercially) leaves it with a 20% success rate going forward, so assuming 30 wells or 50 wells or 100 wells in future would all be 100% success is rather optimistic.

Lots of assumptions and taking figures from Camac and Sino etc... but what else can you do when there is nothing else to use.

Key things moving forward to look for from LRL are :

Estimated Gas In Place on the license - upper and low GIP figures.
Recovery Factor estimates - 6% recoverable ? 10% recoverable ? Less ? More ?
EUR per well - do they think 2 BCF recoverable per well is about right ? Less ? More ?
Porosity figures - what are they ?
Permeability figures - what are they ?

The flow rate levels is not very important info, only commercial or not (unless of course the flow rate is very low in which case its a major issue imo), the key is the reserves, the recoverable gas and how much gas can be drained per well - that is the key to any valuation in my view. If you can only extract circa 2 BCF per well then it matters not too much if you get it out in 1 year or 5 years - only that the quicker you get it out then you have the cash to drill more wells, if its too slow in coming out then you will need to raise cash by fund raising to keep working cap up while you drill - so yes, it has some bearing to the overall economics and viability, but my case here assumes flow rates are very good and they can self fund the drilling from ongoing cash flow due to high flow rates - if thats not the case its not quite so positive.

If the currently being tested well yields commercial flow rates it will be positive, it will imo give a supported share price of 13p and open the door to a higher EV value - perhaps 18p to 20p a share will be supported taking into account the potential for future success.

However with presently a 0% commercial well rate in this license (0 commercial from 4 drilled) if this well does flow commercially then it moves to 1 success in 5 wells and that is not a very high success rate.

If they can move the success rate up to 60% or higher then its fair to say the market will start to value the share price higher - but that is going to take continued success, if they can get it with this first drill and carry on the run - and any failures will have a significant detrimental effect on confidence and sentiment.

All of course, IMO, NAG, DYOR !

http://www.youtube.com/watch?v=2n2wVzGF2nM

Again i don't know where you get your figures from. LRL have had independent valuations and await revised CPR. Current net figures to LRL given info to date by independent parties gives a NPV of $1bn and that is taking into account PetroChina's 40% back in rights.

http://www.youtube.com/watch?v=vrvyQVyUreY

Keep twisting the facts though Prolenes, your history across all the boards is there for all to see. 4 wells previously drilled on the other side of the block have not yet been tested if you read the RNS. 11 drills in the area and 11 commercial wells drilled by Frank Fu and team 20yrs experience at Con Phillips and now at LRL. The SinoGas field next to LRL Zijinshan field which Frank Fu recently drilled/ appraised is currently a 12TCF discovery.

LOL lizard, you seem to be getting sucked into the ramp.

So they purchased this license from Camac for less than 3m GBP equivalent and then overnight it has an NPV of 1 billion dollars.

Wow - they really can get blood from a stone.

Or are you missing the word "potential"...............


If I buy a lottery ticket I have a potential net worth (if it wins) of many millions of pounds............... You want to buy shares in my 1 GBP lottery ticket, they are only 10 pounds each, by lots of shares in it from me, potential NPV is many millions of pounds..................

LOL. CAMAC seemed happy enough to take a significant stake in LRL as part of the agreement.

And have they sold those shares ? ;)

News out in Oz.

Nothing much, just spud and testing started.

Down over 3.5% in Oz on the news.

http://finance.yahoo.com/q?s=LRL.AX

.

The news contains nothing new but the reason its over 3.5% down in Oz is likely imo to what appears to be a 4 week delay to the next well.

In todays RNS in Oz they say ( http://www.asx.com.au/asxpdf/20121210/pdf/42btn203h3h6rn.pdf )

...........The second well in the current three well program, ZJS6, has commenced drilling and completion is scheduled for late January 2013......


But only a few days back they said ( http://www.investegate.co.uk/leyshon-resources-(lrl)/rns/zjs5-well-at-td-multiple-potential-gas-pay-zones/201211280730041458S/ )

....The second well in the program, ZJS6, is expected to spud shortly with well completion scheduled towards the end of the year.....


So what is happening, why a few days ago was the next well due for completion end of the year and now its end January ? All looks a bit strange........

Believe so. LRL have $50m in cash and this three well drill campaign will cost just $5m.
two wells spudded, one flow testing potential pay zones, results due shortly.

This should be re-named RAMPING RESOURCES

All imvho

who's ramping?, take it you have seen the Sinogas results today?

Bad news out - BIG BIG FALL COMING.

Now, let me say again.

Each well, if its able to flow (and this license area is nothing like the Sino area, this area is VERY TIGHT) and ITS A BIG IF, will only be able to DRAIN a very small area.

CAMAC (who called this correct flogging the licenses of for a small about to LRL imo) estimated that for all the gas in the whole license the MOST recoverable would be 300 BCF IF ANY GAS AT ALL IS RECOVERABLE.

If they are lucky and they get flow, in my opinion, they will be very lucky to get 2 BCF per flowing well. They might only get 1 BCF or 0.5 BCF per flowing well before it dies and flows no more.

This area is VERY VERY TIGHT based on all the wells so far, so even if you frac the penetration of the frac will only get you a very small area in my view which can be drained, much smaller than what Sino are getting in their sweet spots.

To exploit this area based on this VERY LOW PERMEABILITY (no gas flow at all in their test) you might even be looking at having to drill 300 to 400 wells to get out 300 BCF, if its there at all.

Wonder if LRL will go back to looking for Thermal Coal in China or Gold Mining or all the other things they have done/said they would do, and give up on the gas after these 3 wells ?

I think when people look for really small companies they should go for something like TRAP (Trapoil).

Undervalued, cash/assets (waiting for Athena deal) pretty much equal to market cap, currently drilling Romeo in the North Sea, drilling a lot more wells in 2013.

Lots of upside, minimal downside, conventional oil, close to home North Sea - simple and safe.

Just imo.

Big fall it was, the wheels have fallen off of this ramp now big time.

No fracking until late March most likely.

IC recommends SELL

www.investorschronicle.co.uk

Leyshon flow test disappoints:

Shares in China focused unconventional gas explorer LRL shed 24 per cent after tests showed the company's ZJS5 tight gas well could not produce commercial flow rates without fracking. Frack testing will now proceed as originally planned, but the practice will have to wait until after the Chinese New Year in February. The company's second well, ZJS6, is progressing well towards its target depth of 2320 metres. Wireline logging of the well is scheduled for mid to late January.

The shares have retreated below the 15p level at which we first advised buying them. We haven't written off the company's project just yet, and we see its cash backing of 10p a share (after taking into account well costs) as a potential support level for the shares.

There could yet be value here, but for portfolio purposes we are selling the remaining half of the shares (we said sell half at 28p before initial drill results came out). Sell at 14p.

The previous owner of this license (CAMAC) did not it seems receive an offer from Sinogas to buy this licenses, else Sinogas with their experience and resources already in this area would have purchased it. It is said that Sinogas think this area is not very prospective and so did not bother buying it from CAMAC, whether this is correct or not is unknown but that is what has been said in certain places.

So it fell to a coal/coke/gold mining company (LRL) to suddenly change course (mining into gas exploration) and buy the license from CAMAC.

Now, on first looks the small amount of cash plus shares in LRL as payment to CAMAC could have appeared to suggest CAMAC wanted to keep exposure to any upside.

However, given CAMAC have been selling their LRL shares it perhaps suggests that CAMAC accepted whatever they could get and have been happily selling their LRL shares to get cash ahead of potential failure by LRL.

The last holdings RNS involving CAMAC showed they had sold below the notification level - so any more sales and there will be no RNS, they can simply keep selling if they so wish to sell off all their LRL shares.

http://www.investegate.co.uk/leyshon-resources-(lrl)/rns/holding(s)-in-company/201211141518301435R/

CAMAC sold the license for not a lot of money and some LRL shares and have been selling those LRL shares.......... interesting.

.

Interesting RNS from LRL there.

http://www.asx.com.au/asxpdf/20130109/pdf/42cbq208n33kkc.pdf

Firstly we have confirmation of mid-March fracking start - as I have been saying late Q1 is the normal start date - shame on the rampers for telling everyone February.

Also a change in tune, I note they now say to the effect "fracking and if warranted then flow testing after fracking". I am sure the rampers were telling everyone about "commercial" after the last RNS, but this one confirms that only after fracking will there be any flow testing, IF fracking works and the wells flow.

Apart from that nothing exciting about hitting gas in the Ordos basin, thats a given - although this well appears to multiple thin layers, from the info in the RNS.

Long wait until June....

........."Significant results will be reported as they come to hand, however, depending on whether flows are achieved and if so whether long term flow testing is required, it is possible that the overall results will not be available until June."........

Looks like a much more cautious outlook now, flow testing maybe IF fracking is good, and even then getting flows will warrant long term flow testing then before overall results.

This is pretty much what I have been saying all along, striking gas and flowing gas initially mean jack here - its all about getting a well to flow and flow for a long time, to give recoverable amounts of gas. Based on Sinogas average of just 2BCF recoverable per well, its going to take long term flow tests with pressure readings for LRL to work out if any well will be commercial overall - that means they can recover enough gas from the hole before it stops flowing again to pay for drilling costs and make a profit..........

This is tight gas and in an area considered to be "less prospective" than the area's Sinogas has, until proven otherwise.

There is no point drilling holes in the ground if they only flow for a week or two and then stop - you must get enough out to pay for drilling/overheads and turn a profit - for this project to be viable.

So June is about right for an overall "ok its commercial" or "no its not viable overall".

Totally contrary to what the previous poster asserts, the actual flow test statement in the RNS includes -
"As in the case of ZJS5 some intervals may be tested for flow without stimulation ie: without fracking."

I hope that wasn't a deliberate oversight.

You guys obviously know this [ LRL] Stock, but after all said and done, Director Paul Atherley has just spent £268k on a big wad of stock. Could it be that he does believe thee is gas there? Otherwise, why is he investing in what you appear to be saying is almost a dry area?

He currently owns 12% of LRL, inc. this latest purchase.

Is this a "stay-away", since it's based in Aus. and China?
EDIT(15March2013)- seems to be upward going - IC suggests the upside "huge" is worth the downside, since cash part-supports sp. Since China needs the gas I guess they will have Gov. support - glad I bt about 16p
EDIT (Jn2013). Ooops! sp falls to c.10p as well is deeded "dry" - but there are others.
EDIT(23Jy2013)-Another drilling a few km away from the Dry - sp12p, " in hope".

A reminder for Thursday evening, spaces still available if you would like to attend.

Mining and Resource Investor Evening- London – 25th April 2013


Following the resounding success of our previous evening events, Mining and Resources Quarterly and Shares Magazine are proud to offer another chance for you to meet, hear from and ask questions of key senior management figures from carefully selected companies in the mining, oil and gas sector.

This event offers an unique opportunity not only to hear about the latest plans from some of the most exciting companies in the sector, but also to put your questions to the people that matter. What is more, there is a free drinks and canapés reception where you can mingle with industry leaders and your fellow investors. Make sure you don't miss this unique opportunity to get the answers you need from the people who make the market.

The evening conference is tailor-made for private investors and professionals who already have exposure to mining and resources stocks, or anyone who is considering putting money to work in these exciting and dynamic industries.

Tickets are completely free but places are strictly limited so register now.

REGISTER NOW FOR LONDON EVENT ON 25th APRIL 2013

Date: Thursday 25th April 2013

Venue: Novotel Tower Bridge, 10 Pepys Street, London EC3N 2NR

Registration: 6.00pm

Presentations: 6.30pm followed by a drinks/canapés reception

Companies Presenting:


FOX MARBLE



Fox Marble Holdings PLC(FOX) is a natural stone extraction company operating in Kosovo and the Balkans region, with headquarters in the United Kingdom. Established in 2011, Fox Marble has access to over 300 million cubic metres of premium quality marble including white breccia and honey yellow onyx.





Speaker: Chris Gilbert, CEO



LEYSHON RESOURCES



Leyshon Resources Limited (AIM & ASX: LRL) has been fully engaged in China since 2003 and has its main operating office located in Beijing.

Leyshon, along with its partner PetroChina, is one of small number of companies exploring and looking to develop unconventional gas production on the Eastern Flank of the Ordos Basin in China.

"We are accelerating the 2013 programme for the Zijinshan Gas Project with plans to drill and test six wells, capture 300 kilometers of seismic data with the aim of delineating resources by the end of the year.”

Speaker: Paul Atherley, Managing Director



MWANA AFRICA


Mwana Africa PLC(MWA) is a pan-African resources company with operations in Zimbabwe and South Africa, and a broad range of exploration projects and interests in the Democratic Republic of Congo (DRC), Angola, Ghana and Bostwana. The group has a diverse asset base, including gold, nickel, copper, cobalt and diamonds.

In October 2005, Mwana Africa became the first African-owned, African-managed resource company to be listed on the London Stock Exchange’s Alternative Investment Market (AIM), through a reverse takeover of African Gold plc by a privately held mining company, Mwana Africa Holdings (Pty) Limited. Mwana Africa Holdings (Pty) Limited was itself formed in 2003.

The company intends to pursue further mining opportunities across the African continent, both independently and, where appropriate, in partnership with other stakeholders

Speaker: Donald McAlister, Finance Director



REGISTER NOW FOR LONDON EVENT ON 25th APRIL 2013

Dress code: business attire

Listen to Paul Atherley, CEO - Leyshon Resources on the panel of the recent BRR Media Thought Leaders series.

Click here to watch

Today's announcement makes interesting reading.

Yes very promising. LRL are well cashed up also cash equivalent of 12p and news of a commercial flow today on it's first well.