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China dominates the supply of this strategic metal and is currently diverting much of its production towards domestic users. This tightening of supply allied to an increase in demand suggests there will be a world tungsten deficit this year. So Caspian is sailing into a perfect storm. It has the right combination of near-term production and blue-sky, and in the La Parrilla mine a potentially world class high grade asset. However, the group will require a leg up financially at some point. Proving the worth of La Parrilla ought to ensure the cash call is done at a significantly higher and less dilutive price. “What we want to do is demonstrate to the market that there is a very large, high grade development here,” said Masterman. “We want to demonstrate to the market that there is revenue and cashflow from the tailings. “With the growth in the resource and the development of the mine I would be surprised if we didn’t head for a very, very significantly larger market capitalisation.”

“The nice thing about the tailings is of course it is mined,” said Masterman. “We have done the metallurgical testing on it and we have good separation. And compared with many of the other tungsten plays we can move into production very quickly with limited capital.” The cashflow from the tailings can realistically be invested into the mine proper, which analysts estimate will cost as little as US$20 million to develop. “There is joint venture interest to finance the mine and off-take interest from metal alloy businesses that desperately short of tungsten,” said Masterman. “We just have to find the right balance between company growth and funding.” Last week the group sealed an €1 million all share deal to broaden its geographic spread, while keeping the focus tightly on tungsten. It acquired Iberian Resources Portugal, which owns the Régua tungsten permit with a an existing JORC resource of 3.4 million tonnes grading 0.37 per cent tungsten trioxide. As part of the deal it also picked up the Tarouca exploration licence, which includes the former Tarouca tungsten mine, and the Portalegre gold exploration licence. The fundamentals for producers couldn’t be much better. Supply is tight and there are no satisfactory substitutes for tungsten, due to its strength and resistance to heat.

Followers of the small-cap sector will recognise Caspian Holdings as an oil and gas firm whose assets were expropriated by the Kazakhstan government. “We listed in 2004 and were very successful for the first couple of years,” explained chief executive Michael Masterman said. “Then in 2008 we hit a brick wall as the Kazakhstan government got expropriative. That was a painful process.” It still has a small oil investment in Kentucky. However, tungsten will be the focus from here on in, and to reflect this fact the firm plans a change of name to W Resources Plc (W being the symbol for the metal as it appears on the periodic table). A look at the management biographies reveals the team running Caspian has as much experience in mining as it does oil and gas. Masterman, for instance, was the chief financial officer of Anaconda Nickel, and the founding shareholder of Fortescue Metals, while Fernando De La Fuente, head of operations, worked with Rio Tinto and Anglo American. The US$1 million, all-share deal to acquire the La Parrilla tailings was unveiled at the end of last year. The group must pay a further €1 million to exercise the option to buy the mine proper. This it is likely to do in the first quarter of next year, according to Masterman. In the meantime the focus is on the drilling campaign, the remaining assay results and a resource upgrade, which is expected around October. Caspian is also planning to compile a scoping study for La Parrilla. “We still have to put it all together for continuity, but it looks like for a limited capital outlay, the drill programme has the potential to double the size of the resource and also lift the grades,” Masterman said. Before the main mine goes into production (this is planned for 2014/15), the tailings provide a significant opportunity for early cashflow in return for around €1.2 million-worth of capital expenditure. There are some 1.2 million cubic metres tailings. A total of 330,000 tonnes of tailings will be processed each year for the next three generating 28,000 metric tonne units of tungsten and 26 tonnes of tin. At today’s prices the output from La Parrilla would generate around €7 million a year in revenue.

trumpets the company’s “new focus on tungsten”. It sets out a compelling story: low capital cost, high return, and a short time-line to cash-generative production. The company’s main focus is the La Parrilla, in central Spain, although it recently acquired highly promising assets across the border in Portugal. La Parilla comes in two parts (initial tailings production, followed by full mine development), which will be achieved in three phases. The initial stage - drilling of the western extension of La Parrilla - is already underway. Assay results from two of the five holes from the 1,500 metre programme have been hugely encouraging. They have revealed tungsten trioxide grades in the order of 0.97 per cent, or more than 10 times the grades encountered in the mine proper. This suggests there is headroom to significantly improve upon the current 36 million tonne resource at La Parrilla, which was successfully mined during the 1970s and 80s.

“Along with the nearby VW deposit, Landore now looks to be on-track to upgrading its nickel equivalent resource later this year and move nearer the resource threshold required to make the project economically viable.” Robertson has a ‘buy’ recommendation for Landore with a 14.5p price target. He reckons Junior Lake has the potential to be worth more than US$200 million alone. And he says drilling results like today’s make this kind of valuation ‘look more achievable’. “Given that the nickel price is at the bottom of its two year trading range at around US$18,000, Landore provides investors with an ability to buy into a stock that could rise very rapidly if nickel prices rebound from their current lows.

Granted, nickel companies in the exploration stage generally tend attract a large discount to their undervaluing resource value. This discount narrows as the execution risks diminish, first with the pre-feasibility study and then when the BFS is published and the hard numbers are on show. Production at Acoje could commence in late 2013 or early 2014, but if previous examples of nickel development are a guide and with a BFS due in September, the share price will respond well before that if all goes to plan.

In future, DSO shipments will come from the neighbouring Zambales prospect, where an updated JORC compliant resource estimate is expected by the end of this month. Gregory said that the reason for switching DSO output to Zambalesis is that ENK’s local partner has a larger stake in that deposit while the use of direct shipping takes away from the value added future opportunities in tank leaching. The existing resource at Zambales contains 23.6 mt of inferred material grading 1.2 per cent Ni. Gregory added that in future he can see Zambales and the surrounding area becoming a significant nickel producer. Metallurgy is critical to nickel production. Some big names have come a cropper through not getting it right and the market is taking a cautious view of ENK while the leaching process remains unproven. Broker Investec estimated recently that ENK is being valued at an enterprise value of just £1 million. Given that 15,000 tonnes of nickel would generate over US$260 million of revenue at current market prices, the market is clearly waiting-and-seeing on the choice of processing. Investec, for example, has a 34 pence target price based on a comparison of nickel resources in the ground with its peers against the current 8.8 pence market price.

ENK has taken one bold decision already by plumping for tank leaching rather than traditional heap leaching to process the ore. Costings for this leaching process will be keenly scrutinised as ENK’s choice will make it one of the first miners to use atmospheric leaching at a nickel laterite project. ENK’s managing director Rob Gregory says the traditional heap leaching method would have worked, but because of the heavy rainfall in the Philippines it would have been more difficult to manage. The equatorial laterites that make up the ore at Acoje are also better suited to tank leaching, he adds. “Recoveries are higher, acid usage is less and the working capital is much reduced because the process does not take a year as it does with heap leaching.” Much of the infrastructure is in place and already permitted, he adds. A resource upgrade at Acoje earlier this year showed an indicated 40.9 million tonnes grading 1.08 per cent Ni, 0.05 per cent Cobalt and an inferred 29 million tonnes grading 0.96 per cent Ni and 0.06 per cent Co. Further drilling will provide the basis for a resource upgrade at Acoje in the next few months. ENK has continued small scale production with five direct shipping ore (DSO) shipments during the quarter to March, totalling 258,415 tonnes. Four of these shipments, totalling 208,030 tonnes, were with an average nickel grade of 1.80 per cent, while one high-grade shipment of 50,385 tonnes was at 2.0 per cent nickel grade. Total revenue from DSO shipments was in excess of US$1.6 million

Earlier this month, the company said its cash position still stood at close to US$40 million, which while not enough to finance the construction at Acoje, will comfortably get it though the BFS with something to spare. Glimpses of the plan have already been revealed. Acoje will be developed over two stages with a focus on the higher grade ore first to reduce the upfront capital costs. The first stage will see an annual throughput of 1.5 million tonnes of ore each year, producing about 15,000 tonnes of nickel. Production schedules in the early years will also be optimised to take advantage of higher nickel feed grades to realise higher revenues. The sulphuric acid plant will only be built during stage two, greatly reducing initial project capital requirements, ENK said. In year five, the plant will be expanded to 24,000 tonnes per year over a 20 year life of mine, making it a sizeable global producer.

Nickel group ENK (LON:ENK, ASX:ENK) will reach a key stage in the development of its Acoje project in the Philippines in September. It is when the company expects to publish a bankable feasibility study for the project, which, for nickel producers, is usually the point investors and rivals sit up and take serious notice. It is also when the discussions about how to move Acoje from development into production also really begin in earnest. ENK is already in a strong financial position after a rationalisation of its portfolio to focus on the Philippines. The Caldag prospect in Turkey was sold last year for US$40 million, while last month the company disposed of its stake in Berong Nickel and other non-core assets for a further £4.5 million (US$7mln) and a recent announcement said that its local partner Montemina will be paying back its loans (circa US$11M).

MoneySwap Plc has its operational headquarters in Hong Kong. Primarily focused on the Asia market, the Group offers pre-paid card services and also operates an online peer to peer foreign exchange and payment platform. The Group's pre-paid card services are primarily aimed at Asian travellers and enable them access to local currencies from ATMs, point of sales and on line purchases in Europe and the United States The Group's online money services platform facilitates peer to peer currency exchange and payments either between e-wallets or international money transfers through the global banking system. The Group has banking relationships with Barclays Bank plc in Europe, DBS Bank in Singapore as well as Standard Chartered plc, HSBC in Hong Kong together with various local domestic banks in other countries. Its shares are traded on the London Stock Exchange's AIM market (AIM:SWAP.L).

Richard Proksa, Chief Executive Officer of MoneySwap, commented: "With outbound tourism from China growing exponentially, Chinese travellers are fast becoming one of our industry's major segment growth opportunities. This Agreement with UnionPay is an exciting and potentially large opportunity for MoneySwap to serve this burgeoning market. We expect that this will also significantly increase the merchant community using our online Money Services Platform for receiving payments, currency exchange and transferring funds. "We now have three key agreements in place with UnionPay covering Chinese nationals who wish to buy goods over the internet from European merchants, Chinese travellers to Europe wishing to make purchases in stores,

A report by the University of London's School of Oriental and African Studies titled "How the rise of Chinese tourism will change the face of the European travel industry", published in October 2011 (the "Report"), estimated that the number of Chinese visitors to Europe would increase to 4.5 million by 2015 and to around 8.6 million by 2020. Already in 2010, the Report found that Chinese outbound travellers spent £30.4 billion, equivalent to an average expenditure of £530 per person-visit. The Report expects this figure to rise by around 14.6% in 2011 to reach £34.8 billion. Against this background of growth, many Chinese travelling abroad have experienced difficulty in paying for goods and services using their UnionPay cards as few of the merchant point of sales card terminals connect to the China UnionPay network. However, the Report found the position to be changing and outbound Chinese tourists have been encouraged by improving financial services for Chinese tourists overseas. In particular, UnionPay cards are now increasingly accepted in European and other destinations with UnionPay's services available in 125 countries and regions besides China. In 2010, UnionPay also entered into new collaborative agreements with shopping centres and duty-free shops in many countriesin Europe. Both Harrods and Selfridges department stores in London have UnionPayterminals installed for Chinese customers and Harrods recently reported a rise of 40% in sales to Chinese customers since the introduction of 75 terminals for Chinese customers in its London stores (source: an article written by Malcolm Moore 2011, 'Chinese tourists bring £200m windfall for London retailers' and published in the Daily Telegraph on 24 May 2011).

UnionPay is the dominant card issuer in China and a leading bankcard brand in the world, with card acceptance in over 125 countries and regions outside of China. UnionPay's POS programme provides a secure, convenient and efficient point of sales payment system that can accept UnionPay cards. Under the Agreement, MoneySwap will be responsible for cooperating with UnionPay to expandthe POS business in Europe by signing up and managing merchants.The Directors believe that by becoming a UnionPay POS merchant acquirer, MoneySwap will be able to facilitate the purchase of goods and services by Chinese tourists, students and business people travelling to Europe.

MoneySwap appointed as China UnionPay Point of Sales Merchant Acquirer for Europe MoneySwap Plc (AIM:SWAP), the Asia focused prepaid card and online money services business, is pleased to announce that it has signed an agreement with China UnionPay ("UnionPay") to act as an overseas business acquirer for the UnionPay Point of Sales ("POS") programme (the "Agreement").

Big plans in a big market It is clear that Proksa and his team are not short of ambition, particularly given the amount of competition in its markets. “Admittedly the online payments sector is very competitive but it is also a very large, and growing, market,” Proksa said. “What we’re trying to do is focus in on a target region and differentiate ourselves from our competitors in those target markets. “We’ve worked hard to localise the product and this is a very key differentiator for us.” As the company pursues this ambitious growth strategy MoneySwap promises to be very interesting new additional to the London market.

As we’ve discussed many facets of the MoneySwap business already exist in the market place but with its new product, QuickPayIt, the company thinks it will be able to offer a new and innovative angle to a tried and tested type of payment processing system. QuickPayIt’s launch is targeted for September, this year. “We’re very excited about this new service. It is new way for our users to make online payments, across currencies, without the users having to exchange banking details. On the face of it the service is not that different to paypal, but what we think will set our product apart is that it can be ‘white labelled’. “That means that organisations, particularly ones that have a community of users, for example, can offer these payment services under their own branding. We believe that this will present exciting opportunities.” The service will be targeted at online SME’s who can integrate QuickPayIT into their existing e-commerce systems, but more intriguingly, Proksa’s plans to target the new wave of network marketing firms that have sprung up in recent years. In recent years tens of thousands of entrepreneurs and marketers have taken to ubiquitous social marketing networks. And Proksa reckons his new product will provide these network marketers with an ideal way to address the challenges of doing business in this vast international arena. “These network marketing firms operate with a very large number of associates and agents that are spread all over the world. “With QuickPayIt these kinds of organisations will be able to use a white label payment system, carrying their own branding, to pay all their various commissions and wages across their network of agents. At the moment these firms use a number of separate systems. With QuickPayIt they could manage it simply and we would automatically credit each of their agents with the money right into their own QuickPayIT accounts, which would carry the marketing firm’s branding. Proksa points out that “Effectively this would be a series of peer-to-peer payments, made between the network marketing company and each of its agents. These network marketing companies are ideal businesses for us to target. They have a lot of employees/agents and they have a real need for online payment processing services. But it is still just one example of people we could target with this new product. Armed with its scalable currency exchange and these two bolt-on business units MoneySwap now plans to use the £3 million it raised through last month’s IPO to help it build its presence in Asia by targeting new markets and for working capital “We plan to roll out the service to new countries and that will help us add more volumes to the platform and increase our revenues,” Proksa added.

Secondary products to pull in users Central to the group’s big push for volumes is the integration of a number of other products and services. While the currency exchange and the clearing house sit at the core of the MoneySwap business, it is through two other products that MoneySwap plans to draw users, and therefore transaction volume, into the exchange. Already in circulation is the MoneySwap pre-pay currency card, which is a bit like a travellers check for the 21st century. While the service is by no means unique it is a very useful way to pull in business from retail users. “These are debit cards, linked via our partner banks,” Proksa said. “As a user you can transfer money into your MS account, exchange it into another currency and store the money onto your MoneySwap Card. “Then as you're travelling you can either withdraw money from ATMs or use the card as payment in stores or restaurants. They can be topped-up at anytime online via a MoneySwap account. Beyond the tourist market Proksa and his team have already identified several other markets for the pre-pay card, and perhaps the most exciting involves Asia’s upwardly-mobile youth. Hundreds of thousands of international students, largely from Asia, flock to study at European and American universities every year. The majority of these globetrotting academics are supported by their families back in Asia and, according to Proksa, the MS pre-pay debit cards are an ideal way to handle both the money transfer and the management of the accounts. “The parents get a pre-pay debit card for the son or daughter and top-up the card from their accounts back in Asia. By using the debit card and MS system the parents can save time and money. Importantly it also gives them the flexibility and control to manage the account. “We think we our prices are very competitive. Doing a wire transfer in Hong Kong, you can pay around US$20 in transfer fees and then you still have the foreign exchange costs. The cost and time savings would stack-up very quickly if you were using our service instead.”

Growing volumes towards ‘critical mass’ Initially MoneySwap has to add more volume to the MSEx before it can step out of these transactions. “At the moment we are still building up our volumes to the point where we can switch to a peer-to-peer business model. “The point where volumes reach a ‘critical mass’ and we make the switch will be down to two things. Firstly the total volume across the exchange and secondly the number of transactions across the currency pairs themselves. “For the major G7 currencies it will come much faster than some of the other currencies available on the platform.” Just shy of 3,000 active participants currently use the service. The majority of these users are individual users, but according to Proksa, around 60 corporate and SMEs (small-medium sized enterprises) also use the service frequently. Proksa explained that many of the transactions involve ‘fairly small amounts’ – with individuals swapping currencies to make specific payments or to cover them as they travel abroad – however the corporate business on the MSEx involve much larger deal sizes. The group’s primary focus has been on technical development prior to joining AIM. “So far we’ve been focused on the technology so that we can deliver on the services we’re offering our customers,” Proksa said. “We’ve streamlined and automated many of the processes. We’ve made the system secure and robust. We’ve been focussed on the infrastructure, not just the technology side of things but also the banking infrastructure that stands in the background.” MoneySwap’s clearing system is backed by a number of major financial institutions. The group’s principal banking relationships are with Barclays in Europe, DBS Bank in Singapore and with Standard Chartered, Hang Seng Bank and HSBC in Hong Kong. All payments into and out of MSEx are made through the MSPCH clearing house, which is connected to the global SWIFT network. “We also worked hard to prove the concept and now I think we’ve done that. Now we want to roll out our service and add real scale.”

Speaking to Proactive Investors, chief executive Richard Proksa explained how the group’s push to become a peer-to-peer exchange will transform the group’s revenues. Like most other retail currency exchanges, MoneySwap acts as a market maker – basically it obtains a favourable exchange rate, adds a margin to take its cut and then gives that rate to its customers. But once MSEx goes ‘peer-to-peer’ – meaning that MoneySwap will no longer be a ‘middle man’ in the deal and the users will exchange currencies with each other - the revenue group’s model will change dramatically. At that point MoneySwap will no longer be taking a cut out of the exchange rate. Instead the company will simply charge a transaction fee to each customer. This transaction fee is likely to be tied to the exchange value, as a percentage of the amount of money ‘swapped’, Proksa explained.