THE ROADHOUSE BOWSER: Sun Resources (ASX: SUR) has completed drilling and casing operations at the Jack Howe #1H well location within the company’s Normangee oil project.

The company said the results of the analysis of the conventional core recovered from the Lower Woodbine in the Jack Howe #1H vertical pilot well are now available and have been integrated with the wireline logs to identify the potential oil pay in the well.

A total of approximately 250 feet (75 metres) of oil pay is interpreted from the wireline logs, with the core analysis data now integrated.

Sun indicated this thickness of oil pay is in line with its pre-drill expectations and confirms the potential for Lower Woodbine oil pay across the company’s Southern Woodbine leases.

“This pay interval is the zone which was the target for the Jack Howe #1H lateral and the pay potential has been confirmed by the strong oil and gas shows during drilling,” Sun Resources said in its ASX announcement.

“Strong oil and gas shows continued while drilling the horizontal section and the shows strengthened toward the end of the well bore, with a total of approximately 6,100 feet of lateral section drilled.

“The sub-surface technical data and analysis will form the basis of an independent reserve and resources report that will be initiated shortly and prepared over coming weeks.”

Sun indicated it will now integrate the data acquired while drilling, plus the core and log analysis to build a model for the design of the hydraulic fracture program for the well.

Sun is currently targeting commencing the multi-stage fraccing operation in October 2014.

Email: admin@sunres.com.au

Website: www.sunres.com.au

THE ROADHOUSE PHARMACY: Viralytics Limited (ASX: VLA) announced positive results from the company’s US Phase 2 CALM trial of CAVATAK™ in late-stage melanoma at the European Society of Medical Oncology (ESMO) 2014 Congress in Madrid.

Viralytics described CAVATAK as a novel cancer immunotherapy based on a proprietary cold virus that has been shown to preferentially infect and attack cancer cells.

To date, 22 of the 57 (38.6 per cent) patients have achieved the immune‐related Progression‐Free Surviva (irPFS) endpoint, exceeding the initial target of 18.5 per cent, or 10 of 54 evaluable patients reporting irPFS at six months after the first dose of CAVATAK.

Investigators also reported an overall response rate in 16 of 57 (28 per cent) patients, with an additional three patients remaining in the extension phase of the study and being monitored for the development of an overall response.

Viralytics claims CAVATAK continues to demonstrate activity in both injected tumours and non-injected tumours, including local and distant lymph nodes, lungs and other distant sites, suggesting an anti-tumour immune response.

The company said an interim one-year survival rate of 73 per cent (33 of 45) patients was achieved in what it descrtibed as being a challenging population with advanced, difficult-to-treat disease.

CAVATAK™ treatment continues to be well tolerated in patients, with no reports of drug related serious adverse events or grade 3 or 4 adverse events, and the majority of side effects being reported as grade 1.

“These latest results further demonstrate CAVATAK’s oncolytic immunotherapeutic activity,” Viralytics chief executive officer Dr Malcolm McColl said in the company’s announcement to the Australian Securities Exchange.

“Based on CAVATAK’s outstanding performance in this trial, and with strong support from leading oncologists, we plan to aggressively pursue our clinical development program.

“The commercial opportunity for CAVATAK, either as a monotherapy or in combination with other new agents, is reinforced by these very promising outcomes.”

Website: www.viralytics.com

THE ROADHOUSE BOWSER: The Australian Petroleum Production & Exploration Association (APPEA) has slammed a recent announcement from the News South Wales Government signalling plans to extend its current freeze on natural gas exploration.

The State Government announcement comes hot on the heels of a Federal Government release of its draft Energy White Paper, which highlighted the need for an urgent uplift in NSW gas production.

Needless to say that particular announcement received a much warmer welcome from APPEA, which indicated it had been backed by business and manufacturing bodies, not only in NSW, but on a national scale.

“It also appears the announcement is set to be made just days ahead of the NSW Chief Scientist’s report into the science of gas development in NSW – sending a message to industry and third parties that such policy announcements are made independent of scientific consideration,” APPEA said in its press release.

According to APPEA, NSW consumes around a quarter of the gas used in the eastern Australia gas market, yet the state supplies only about one per cent of the gas production for that market.

“The state’s 1.3 million gas customers rely on interstate producers for 95 per cent of their supply, despite the state possessing very significant reserves and experienced gas companies willing and able to produce local gas for local consumers,” APPEA said.

“NSW regulated gas prices are increasing by more than 10 per cent this year.

“New production depends upon successful exploration activity.

“And without new exploration and production in NSW, it will be very difficult to put downward pressure on NSW gas prices.”

Website: www.appea.com.au

THE CONFERENCE CALLER: An advantage to attending mining conferences, where junior exploration and mining companies are in also in attendance, is that you get to find out which ones are out on the ground doing what they do best…exploring.

A recent Explorer Quarterly Cash Update report from BDO identified 1 in 10 ASX-listed exploration companies did not carry out any exploration during the recently-completed June quarter.

“This is a very telling statistic, showing that a material portion of the ASX-listed explorers are not doing what their ‘mum and dad investors’ would be expecting them to do,” the BDO report noted.

“Investing in exploration companies has always been a more risky use of capital than investing in more stable businesses, but for companies that are not exploring at all, there is no possibility of any reward to investors for that risk.

“If this situation continues, finding investors for companies classified as ‘explorers’ will become more and more difficult.”

At the RIU Melbourne Resources Roundup there were not exploration-shy companies to be found with the exhibition booths and presentation auditorium offering investors the opportunity to mix it with the managing directors of these companies and to ask them all they questions they wanted answers to personally.

The Roadhouse managed to catch up with just a few to grab a quick snapshot of what they are currently up to.

Blackham Resources (ASX: BLK) is continuing to work towards production at the Matilda gold project, having picked up the plant and infrastructure to get into production we have moved from being a successful explorer to being a near-term producer.

“We have ticked most of the boxes we need to get into production with that plant and infrastructure and now we are focusing on getting the first five…six…seven hundred thousand ounces into the mine plan so we can turn it back on,” Blackham Resources managing director Bryan Dixon said.

“We’re doing that as quickly as we can and we are very keen to be ready for this to go into production when the world economy starts to improve.”

“The issue around the Board has been resolved – and was in pretty quick time – during that time our operational staff were still focusing on what they had to do and now the corporate staff can get back to focusing on the main game as well.”

www.blackhamresources.com.au

Pioneer Resources (ASX: PIO) has commenced aircore drilling and EM surveys at three of its projects, the Accra project for gold, the Jugla Dome project for copper-lead-zinc, and the Golden Ridge project for a nickel target.

“Everything is on track for the granting of the key Fairwater tenement in the Fraser Range and we still anticipate drilling there before Christmas,” Pioneer Resources managing director David Crook said.

“There is 5,000 metres of aircore drilling, there is another 1500m of RC drilling to immediately follow that, and we have EM surveys around the Blair mine and on a, brand new, copper-gold gossan at Jugla Dome.

“We’ve just raised $1 million and it’s time to spend it.”

www.pioneerresources.com.au

The main focus of Flinders Mines (ASX: FMS) is at the company’s Pilbara iron ore project (PIOP) where it is feverishly working to complete a feasibility study.

“We have just finished a really significant drilling program, and that has been designed to bring all of the Inferred ore into the Indicated and Measured category, from that we can develop a mining Reserve,” Flinders Mines managing director Ian Gordon said.

“So that’s been done, now we are currently working on the new Resource models, and once that’s done we can do all the mine planning

“By the end of the year we expect to complete all the mine planning and have, effectively, a mining Reserve for the project.

“We still need to get all our updated environmental approvals in place – we expect that to take until June 30 next year.

“At the same time a feasibility document will be completed in the end of the June quarter as well.

“Our project is a very good iron ore project – we would expect that we will end up with a grade of around 59 per cent iron, which will position us between the Rio Tintos of the world and Fortescue Metals Group in terms of grade.

“We think that project is going to be very attractive to partners and financiers going forward and come the middle of next year, hopefully all the bad news in the iron ore sector has washed through and we will have a stable base from which to move forward.

“We are well-funded at the moment, we have a lot of work to get on with, and probably the best thing of all is actually not to be producing right now as a junior.”

www.flindersmines.com

St George Mining (ASX: SGQ) is now at the point where it has a number of advanced nickel-sulphide targets where it is about to commence its next drilling program.

“We have just raised $1.75 million in fresh capital, so we are fully-cashed up and we are also expecting to receive a further $800,000 from a Research and Development rebate, giving us a total of $2.55 million of fresh money,” St George Mining managing director John Prineas said.

“We have actually had a few brokers congratulate us on achieving something that other junior explorers have been unable to do at the moment – in terms of our improved cash position.

“We are pleased with that, but we are even more pleased that we have a number of high-quality targets that we are about to go and drill.

“All of our targets are advanced and they just may be the ones that bring about a major discovery.”

stgeorgemining.com.au

THE CONFERENCE CALLER: Opening the RIU Melbourne Resources Roundup Patersons Securities resource analyst Jason Chesters couldn’t have summed up the resource industry’s last decade any more succinctly.

“As far as the past decade in concerned, resources have performed phenomenally well,” he told a packed first day audience.

“Probably more in the first half of the decade than in the second part, but that was primarily driven by the rise of China and the demand it created for commodities.”

In other words – the last ten years have been great, however they could have been really great if it weren’t for how dire the last five have been.

Taking a look at how commodities have performed over the past decade – first up gold and silver, Chesters suggested former positive attributes that had driven the rise in the gold price had faded.

Silver, he noted broke its traditional correlation with gold around 2011, but had reverted to type in recent times.

Palladium he noted had separated from platinum’s performance with one reason being a disparity in demand for use in auto catalytic converters in gasoline vs. diesel vehicles.

On the base metal stage he described the performances of copper, tin, lead and zinc to have been much the same over the past decade with China directing the action.

Supply restrictions, he said, benefitted each commodity at various times during the period.

Nickel and aluminium, being dogged by excess supply capacity and large stockpiles, didn’t enjoy the past decades as much as, although nickel has recently recovered strongly as a result of the Indonesian unprocessed ore ban and potential emulation by the Philippines.

Chesters then turned his attention to what he considered to be the resource equity drivers over the past year.

Iron ore exposure dominates the ASX200 Materials Index, mostly through the dominance of industry heavyweights BHP Billiton (ASX: BHP) and Rio Tinto (ASX: RIO) and to a lesser extent Fortescue Metals Group (ASX: FMG), BC Iron (ASX: BCI), and Atlas Iron (ASX: AGO).

“It [iron ore] is a dominant feature of the Materials Index,” Chesters said.

“So where goes the iron ore price – so goes the Materials Index, to a large extent.”

Chesters explained the sector is going through a phase of introspection at present, especially in terms of cost reduction, capital preservation, which has made it difficult for new projects to justify their allure to the current market, which remains attracted by yield and cash flow.

“Gold has effectively lost its investor appeal, ETFs have been selling up gold,” he said.

“With iron ore we saw substantial supply increases – driven largely by the boom in margins through the high iron ore price…but that has now started to impact at the very point that we have seen China’s growth start to dwindle, and we have seen what has happened to the iron ore price…at just under $80 per tonne.”

Source: Patersons Securities

Chesters has an optimistic view of what we can expect to see from the market as we move forward.

He suggested we can look forward to improving global growth despite a marginal slowdown in Chinese growth, which should be supportive of current commodity prices in general.

“We still expect improved growth from the global economy over the next couple of years,” he said.

“Despite the marginal slowdown we have seen in China, we believe that general climate is positive for commodities.

“Investors should be focusing more on trying to isolate and ascertain which new applications and high-growth areas are around and what the potential impact could be on commodity demand from those new high-growth areas.”

Chesters drew the audience’s attention to the situation where the major companies are currently divesting their smaller projects to focus on key projects in order to conserve capital.

This creates opportunities for junior explorers and the private sector, while Merger & Acquisition activity is expected to increase.