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EFG Continent - Daily Update, Feb 28, 2012.

TOP NEWS

Ivanhoe Mines' Oyu Tolgoi mining complex is 73% completed (page 2).

Ivanhoe Mines' subsidiary announces Feasibility Study results (page 2).

Max Petroleum: operational update (page 3).

Dragon Oil: drilling update (page 3).

Kazakhmys resumes work at Konyrat mine (page 4).

(To view the full report please click here:

http://reports.aiidatapro.com/brokers/Continent/Daily_28.02.2012_continent.pdf)

Ivanhoe Mines' Oyu Tolgoi mining complex is 73% completed

EVENT: Ivanhoe Mines (IVN) announced that construction of the first phase of the Oyu Tolgoi mining complex in southern Mongolia has surpassed an estimated 73% completion and is on track to meet the mine's targeted start of initial production in the third quarter of this year. Installation of the two production lines in the concentrator and pre-commissioning works are progressing ahead of plan. The concentrator, which will have an initial capacity of 100,000 tonnes per day, now is more than 80% complete. The first production line is scheduled to be completed during the third quarter, followed by completion of the second production line in the fourth quarter this year.

COMMENT: We view the news as having neutral impact on IVN. The construction of Oyu Tolgoi mining complex is in line with company's schedule and market expectations.

Ivanhoe Mines' subsidiary announces Feasibility Study results

EVENT: Ivanhoe Mines (IVN) 50% owned subsidiary, Altynalmas Gold, announced today that an independent Feasibility Study estimates Mineral Reserves of 5.76 million ounces of gold at the Kyzyl Gold Project in northeastern Kazakhstan. The reserve estimate is based on an underground mining operation producing an average of 337,000 ounces of gold per year during an initial mine life of up to 15 years. Metallurgical process performance testing demonstrated recoveries of at least 88% of contained gold. RPA now estimates that inclusive of Mineral Reserves, the Bakyrchik Gold Deposit consists of 25.9 million tonnes of Indicated Mineral Resources grading 8.84 g/t and containing 7.35 million ounces of gold. RPA also estimates that Inferred Mineral Resources for Bakyrchik total 6.3 million tonnes grading 7.1g/t and containing 1.5 million ounces of gold, while the Bakyrchik East Gold Deposit contains 7.8 million tonnes, grading 6.3 g/t and containing 1.6 million ounces of gold.

COMMENT: In our opinion the news positively impact on IVN's price as the Feasibility Study showed that the Indicated Mineral Resources, inclusive of Mineral Reserves, at the Kyzyl Gold Project, increased by 18% and currently contains an estimated 7.35 million ounces of gold. The project also contains an additional 3.0 million ounces of gold in Inferred Mineral Resources

Max Petroleum: operational update

EVENT: Max Petroleum (MXP) announced an operational update on the results of the SAGW-3 appraisal well, progress with drilling operations at the NUR-1 well on the Emba B prospect and a report on the impact on operations of recent severe weather. The SAGW-3 appraisal well in the Sagiz West Field has reached a total depth of 1,486 metres, with electric logs indicating 15 metres of net oil pay at depths from 1,201 to 1,254 metres. Reservoir quality appears very good with porosities ranging from 15% to 25%. The NUR-1 well is currently drilling at a depth of approximately 5,300 metres, and is expected to reach total depth by the end of April 2012. The Company intends to set intermediate casing at a depth of approximately 5,600 metres before drilling into the pre-salt section.

COMMENT: We expect a neutral reaction in MXP stock, as the company is in line with its schedule and market expectation, although Western Kazakhstan had experienced unusually severe winter weather conditions over the last several weeks.

Dragon Oil: drilling update

EVENT: Dragon Oil plc (DGO) announced the successful completion and initial testing of the Dzheitune 28/166 development well. The well was completed with a single string to a depth of 2,810 metres and tested for initial production at 1,975 barrels of oil per day. The rig has skidded to the next slot and spudded the Dzheitune 28/169 well. DGO is currently completing the Dzheitune C/167 well with initial test results anticipated in approximately two weeks' time. Drilling of the Dzheitune 13/168 well is ongoing.

COMMENT: We view the news as having a neutral impact on DGO's stock as it is well in line with Dragon's current operational guidance for the remaining 2011. Drilling of the Dzheitune's wells is ongoing

Kazakhmys resumes work at Konyrat mine

EVENT: Kazakhmys (KAZ) resumed mining at Konyrat, where work stopped in 2008. The company plans to excavate about 57 million tons of copper ore at Konyrat in the next 9 years before closing the mine. In 2012, the company plans to produce 3.5 million tons of ore and process at the Balkhash plant. Ore production will begin in the summer and will reach its maximum capacity in July 2012. Currently the company provides stripping works on the field.

COMMENT: Moderately positive for the KAZ as Konyrat mine will provide additional production of relatively cheap cooper. However, Konyrat is a mature field as the most other KAZ's mines with decreasing cooper grade in the ore. Consequently production cost on such fields will rise gradually.

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Publication:Russian Banks and Brokers Reports
Date:Feb 28, 2012
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