Xtract Resources (LSE: XTR) has jumped by more than 5% today after the company issued two positive news releases. The first release was a third-quarter operational update from XtractsChepicaGold and Copper Mine in Chile. During the third quarter, Chepicareported revenue growth of 153% to $448k and profit growth of 186% to $150k. Costs fell 15% to $298k.
Xtracts second positive piece of news was the announcement that the company hassigned a joint venture agreement with Mineral Technologies International Limited,to mine alluvial gold on the Manica gold project.
Xtract expects the joint venture to produceapproximately 32,000oz gold per annum, (16,000oz net to Xtract), andMineral Technologies will cover the cost of the construction of an alluvial gold plant. When in operation, its estimated that the Manica gold project joint ventures payback period will be less than six months. Construction is expected to commence during the third quarter of 2016.
These two positive news releases only boost the investment case for Xtract. The company has made staggering progress over the past year improving its prospects and last month the group acquired the Fair Bride gold project, jacking up Xtractsresource base to over 1m ounces of gold.
Now could be the time to buy Xtract as the companys mining projectsgetoff the ground.
Struggling with costs
Unfortunately, as Xtract powers aheadNighthawk Energy(LSE: HAWK) is struggling.
Nighthawk announced today that the company is implementing a number ofmargin enhancement and operational efficiency measures to reduce group costs as the low oil price eats into profitability. A management shake-up has seen Nighthawks CFO leave, to be replaced by Mr. Kurtis Hooley, who will take up the roles of both CFO and company secretary.
Nighthawk reported an operating loss of $5.2m for the six months to June 2015, compared to a profit of $11m in the same period last year. Moreover, thecompany seems to be running out of cash. Nighthawk was forced to issue a $10m zero coupon unsecured convertible loan note at the end of August to bolster its balance sheet. But as the company burnt through $7.4m during the first-half, this cash wont last long.
Even with the cost savings announced today, it looks as if Nighthawk is going to struggle going forward.
Genel Energy (LSE: GENL) is another oil producer thats struggling with the low oil price. The company announced this morning that it was reducing production guidance for 2015 toa range between 85,000 and 90,000 barrels of oil per day, from 90,000 to 100,000bopd.
Genel went on to say that reduced production guidance would mean a lower revenue figure for the year.It cut its revenue guidance to a range between $350m and $375m, down from $350m to $400m, based on a crude price of $50 a barrel.
However, Genel has now reached a turning point with theKurdistan Regional Government as the flow of oil payments from the KRG has improved. Management is confident that the KRG will continue to return owed cash to producers,removing much of the uncertainty thats surrounded Genel for the past few years. Group net debt at the end of September was $211m. Genel currently trades at a forward P/E of 26.6.
If you’re not interested in Genel, Xtract or Nighthawk, our analysts have just discovered abiotech thatflies under the radar of most investors.The company in question is a small but growing player in the industry and is backed by some of the world’s largestpharmaceutical companies.
Also, the small-cap in question gearing up to launch several new proven products during the next year or so.
The Motley Fool’s top analysts have identified this company as one of the market’stop small caps. They believe theshares couldjump by as much as 45%.
If you want to find out more about the company in question, downloadour new free reporttoday.