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It may seem like a minor detail but today's RNS made an interesting point about the Elikhulu project. Once the Evander Tailings Retreatment Plant is integrated into Elikhulu, this is forecast for January 2019, the company will have a processing capacity of some 1.2 million tonnes per month. It will then be in a position to secure new sources of feed for the Kinross plant. Basically, Elikhulu will be able to recycle waste from tailings dumps outside its licence area. That, in my view, is an important point. In effect, it substantially increases the life and potential profitability of the Elikhulu operation.

It's certainly priming itself for a major push to develop its offshore East Coast assets. Although the upside is potentially huge, today's RNS gives no indication of the scale of the costs. That obviously raises questions about further placings. Of course, its onshore drilling programme is now largely self-funding. But the offshore costs are of a different magnitude. And its 35% partner in the TGAL field, Petrotrin, is already burdened down with debt. That said, the lead times are long and my understanding is that it does not believe that Petrotrin's financial problems will prevent the development of the field.

By the way, with significant capital expenditure on the horizon, it might be useful if the company could offload its West Coast assets. They may be profitable but they are non-core.

Simply receiving a response from a listed company confirming that it takes on board constructive advice or criticism has to be good news. SOCO has a narrative that it needs to disseminate. As an investor in the company, I think that its narrative is very positive. But it needs to make it more widely known and social media is an appropriate way.

Incidentally, in my opinion, the acquisition of Merlon offers real scope for major low-cost and low-risk expansion. However, that message needs to be more clearly conveyed to the market. SOCO seems to be caught between the large cap resource companies, that are obviously well-covered and widely followed, and the small caps that have, in some cases, almost fan clubs of small investors. Maybe a few evening events aimed at private investors would lift its profile.

To some degree, the company will be judged on the outcome of the JORC report. If it's poor then it has no future. On the other hand, a strong report could be the cornerstone for serious development. And unlike many mining projects, this has the infrastructure in place to monetise its assets and has recently been in production. It's also in a stable jurisdiction.

As for the Directors of the company buying stock, I would rather they were buying than selling. And I would like to see Directors buying on the open market rather than to depend upon share options with very low hurdles for qualification. For sure, it may simply be used as window dressing but I much prefer my managers to have skin in the game.

Putting this company into context, it could be a serious player in the Tantalum mining industry. This is a strategically valuable resource in a world that seems overdependent on Rwanda and the DRC for its supplies. And, of course, it's a Lithium play. But its market capitalisation is just £6 million.

Make no mistake, this is a high-risk investment and, in my view, should be treated accordingly. But the upside could be considerable.

To get some idea of the strength of its low-cost operating model, it might be useful to take a look at its cash operating costs. By its own estimations, these are amongst the lowest in the industry. Its copper cash operating cost as per its recent interim results was US$0.58 per pound while for zinc, its cash operating cost was US$0.44 per pound. Putting that into perspective. The last time that copper was that low in price was in 1973 while for zinc it was 2004. That seems to be reflected in its operating margins, currently around 43%. Basically, it seems to operate a robust model capable of withstanding price shocks.

The one downside that I can see, is that it can only really grow by acquisition. It's looking at increasing production at its SASA mine but this is only relatively modest, some 10% or so. Finding suitable targets that meet its low-cost and full-cycle model could be tricky. But it has successfully moved outside its core area of expertise and into underground mining. And has demonstrated an ability to execute on its strategy.

Strange, somebody posted a rhetorical question on the Amerisur section of this BB in relation to President Energy. It asked whether investors should prefer Amerisur Resources over President as an investment. Rather than answer the question there, I thought a brief response might be in order here.

To start with, the management of President appears to be more closely aligned with the interests of the shareholders. Peter Levine owns around 30% of President's stock. Collectively, the Board of Amerisur own around 4% and much of that comes from share options and awards. And Amerisur's Board seems to be overstaffed and overly rewarded, especially considering the dire performance of the company's stock over the long-term. By contrast, President's Board is smaller and less well compensated. And I don't feel myself asking what do they do with their time?

In terms of the company's assets, sure on paper Amerisur has the upper hand. But as we can see, resource estimations whether its 1P or 2P are estimates of what is underground. Amerisur's problems seem to be overground. It does not seem able to monetise its resources. In fairness, President's Puesto Guardian assets have not lived up to expectations – it aims to correct that with a three-well drilling programme in 2019. But its Puesto Flores assets appear to have performed way ahead of expectations. And around that, there seems to be an inclination towards activity. One can look at President's RNSs from September 2017 (About the time it purchased the Puesto Flores and Estancia Vieja concessions) onwards to gauge the speed at which it operates. By contrast, Amerisur's RNSs are routinely inaccurate with late and sometimes no delivery being the norm.

Just how successful President's current three well drilling campaign in Puesto Flores will be, I don't know. But initial results appear good. And it's basically doing what it says it intends to do. Looking back at the interviews given by John Wardle, CEO, and Giles Clarke, Chairman, of Amerisur, there appears to be a chronic lack of delivery.

At the heart of the matter, lies a fierce determination on the part of President's management to develop and monetise its assets as rapidly as possible. Its wells may come up as dusters but it does get on with the business and that doesn't seem to be the case with Amerisur.

SOCO has built a reputation on being a solid dividend payer. That may be stating the obvious but it still amazes me the number of investors, especially private investors, who are looking solely to capital gains. According to an article in Forbes published in March 2018, between 1930-2016, dividends contributed some 43% towards total returns for the S&P 500. In fairness, it did go on to point out the risks attached to investing in very high yielding stocks. However, SOCO is not a very high yielder. But it does offer a good yield.

My understanding is that it will maintain or increase its dividend and the acquisition was made with that in mind. And it's a full cycle low-cost operator. Both its current assets offshore Vietnam as well as its proposed acquisition are low-cost operations. Importantly, Merlon gives the company a lot of low-risk growth opportunities. And it means that the company will not have all its eggs in one basket – offshore Vietnam. It will have less geographic risk. Rather than impede its dividend, it strikes me that buying Merlon is likely to make it more sustainable.

Not a decision I took lightly, but I recently disposed of my Amerisur holding. Why? Basically, I think that the management has failed to deliver. With ample acreage, no debt and a large amount of cash, the drilling campaign should not have been as problematic as it has become. Its plans largely rested on a successful drilling campaign. That has, up to now, been a disaster. It's quite possible that the company may exit 2018 with lower reserves and lower production than in 2017. After re-examining the interviews given by both Giles Clarke and John Wardle to Malcy, it seems clear to me that the Board needs to be changed. Both were quite emphatic about the company's intentions and laid out a clear vision of where it should be by the end of 2018. It simply has not happened and they have failed to provide an adequate explanation.

With the spudding of wells on CPO-5, the company's fortunes could rapidly change. But that's a big risk I was not prepared to take. Especially bearing in mind that it's not the operator of the block. To some extent, its future lies outside its control. A great deal now hinges on the outcome of its Indico-1 well.

When I look back over the company's previous RNSs going back many years, there seems to be a pattern of over-promising and under-delivering. A bloated and overpaid Board with many external interests seems at the core of its problems. Colombia is clearly a difficult place to operate in and requires enormous attention. The management seems to lack focus.

As for an exit, it appears not to want to pay a dividend. So what is the way out for investors? If its core Platanillo assets are so badly impacted by civil issues, the weather and poor infrastructure, then who is prepared to buy them? And at what price and when? To a large degree, the company is valued on its reserves. But those reserves must be monetised at some point.

As an afterthought, Amerisur has a substantial amount of cash and appears to be accruing cash simply because of higher than expected oil prices. But let's not forget that the current cash pile includes US$35 million it raised through a placing in March 2016 at 25p per share. The cash was, in large part, to fund a drilling campaign that has not happened. It's generating a lot of cash but how much of that is going into keeping its Platanillo assets producing? Basically, it seems to be struggling to find a way to use its cash to increase production and reserves. And that raises the question as to just how recoverable its 1P actually is given the situation in Colombia. Just because the resources are in place doesn't mean that they can be profitably extracted.

Having stated the above, I am still interested in Amerisur and will continue following it with a view to getting back into the stock at some point. However, I think that it's very unlikely that I would be interested with the current management in charge. And I certainly want to see demonstrable success in terms of production and reserve

Worth a mention, in my opinion, is the decrease in well operating costs. They have fallen by 20% compared to Q2 on a per barrel basis. It's not simply earning more revenue because of an increase in the local oil price. It seems to be gaining economies of scale with increased production. Basically, it's becoming more efficient.

By the way, the upside for a successful drilling campaign in Paraguay would probably be huge. My understanding is that the next well that the company plans to drill there will be considerably less expensive than what it has previously done. It's looking at a cost of US$10/12 million. Certainly not cheap but if it came up as a complete duster it would not break the bank.

It appears to be at a fork in the road. A success at Indico-1 followed rapidly by good results from the other wells planned for CPO-5 and Amerisur could see a steep price rise. Should Indico-1 come up as a duster or seriously below expectations, and the downside may be substantial. This was not what I was hoping for at this stage of the campaign. It seems to have put itself in a position where too much is riding on the outcome of one well.

A noticeable feature of President is, in my view, the speed at which it operates. It may get it wrong and has done so many times. But it does have a strong inclination towards activity. The development of its Puesto Flores concession began almost immediately after acquisition. From an investment perspective, I am not convinced that long lead times equate to better quality decisions. If one looks at what ENI has done offshore Egypt. Its Zohr field went from first gas in December 2017 to 365,000 BOEPD by September 2018. It strikes me that in the resource sector long lead times may actually increase risk. There are simply too many variables.

If the figures from the share register are correct, it seems to point to the institutions bailing out. It's not simply Rex selling down his shareholding. I would suggest that it raises the question as to whether the Directors are doing enough to present the investment case to private shareholders?

Whether it's good timing or simply good luck, Pan African seems to be fortuitous in terms of the ZAR Gold price. As I pointed out before, the Elikhulu project was based upon a Gold price of ZAR16319 per oz while, at the moment, the price is ZAR17977 per oz. And it has a grace period before its quarterly debt repayments on the project begin in April 2019. Basically, the riskiest part of its transition appears to have passed and with it, pressure on its cash flow. Of course, an unexpected problem could appear, as in any business, but it seems to be over the most difficult phase.

Considering the difficulties that the company has faced in recent years, the management has, in my view, performed extremely well. From the planning of a move to low-cost Gold production through to the implementation of that plan, the company has demonstrated its ability to deliver. From closing the Evander underground operations through to the three-year wage agreement with the Barberton miners, it has threaded its way through complex issues.

My only concerns are external. Firstly, can the South African Government avoid the economic disaster that has befallen so much of Sub-Saharan Africa? And secondly, the ZAR Gold price. The great irony is that, to some extent, they are intrinsically linked. Should South Africa really implode the currency will collapse and the Rand price of Gold will go ballistic. That's a doomsday scenario that I don't think will happen. But badly thought through interventionist Government policies could destroy the mining sector. And that is something I will keep a watch for.

Before going further, I should point out that I am not a fan of Rex Harbour. However, bearing in mind just how illiquid Amerisur's stock is, maybe no one should be surprised about the impact of a major seller liquidating a sizeable holding. The only realistic way to go about the job is to drip feed the market and that is what he has done. The point I am really making is that when Rex goes don't be surprised if he is replaced. The market doesn't appear to have enough liquidity for a large seller to dispose of a large holding in a short period of time.

Yes, maybe I was not comparing like with like, UKOG is a different animal. But I would suggest that the advances that President has made over the last year will shortly feed into its financial reports. As that happens, I think there will be re-rating. Stock screening software and algorithms are generally not designed to pick-up on qualitative actions. For example, buying Las Bases and Puesto Prado will give the company a route to market for its gas because the concessions come with valuable gas pipelines. The end result is quantitative and cash generating but the acquisition, well that's qualitative and subjective.

Basically, the company appears to be monetising its assets and generating cash. And that will, in my opinion, be reflected in its published accounts. As that happens, it will find itself on the radar of far more institutions.

Strange times indeed, I have just checked the market cap for UKOG, a company that I am not invested in, and compared it with President Energy, a company that I am invested in. The first is capitalised at around £104 million while the latter is around £85 million. The latter is throwing off at least US$2 million per month in free cash flow and is looking at exiting 2018 with a production of 3,300 BOPD. The former had a turnover in 2017 that equated to about two days sales of President's current production. In total, UKOG appears to have produced no more than several tankers (Lorries not ships) of oil. It seems to have shareholders literally counting the lorries leaving the site.

It strikes me that either UKOG is wildly overvalued or President is wildly undervalued.

Moving slightly away from the likely direction of the share price. The company has three Directors responsible for shareholder relations: Giles Clarke, Stephen Foss and Alex Snow. Looking back over the last year's RNSs, I cannot find one reference to a private shareholder presentation. There seems to be no ongoing attempt to reach out to private investors. Earlier this year Giles Clarke was interviewed by Malcy. Aside from that, there appears no campaign aimed at promoting the investment case.

I am unsure as to what the three Directors I mentioned earlier actually do in terms of raising the company' s profile. Do we really need three people to deal with a handful of potential institutional investors? By the way, there are now eight people on the Board. Is it not the time for a cull?

At the time, September 2017, I was not exactly enthralled by CAML's reverse takeover of Lynx Resources. In fact, I was so apprehensive I sold my holding. That said, I still kept it on my watch list. Basically asking myself whether this would work. Not only did the acquisition change the geographic profile of its operations, but it also took it into other metals: Zinc and Lead. And, of course, it was an underground project rather than overground recovery and recycling. And to cap it all, it went from being debt free and cash rich to being encumbered by debt. But even so, that's currently a reasonably modest net gearing of 38%.

Quite recently I bought back into the company. Basically, the acquisition appears to have worked. Thus far, no nasties have fallen out of the SASA cupboard. Importantly, the company has retained its dividend policy. It's not one of those awful jam tomorrow (At least for shareholders but not for Directors) stocks. It pays out some 30%-50% of its free cash flow in dividends.

It goes without saying that the resource sector is inherently risky. CAML mitigates that risk by being a full cycle operation. That's its model. It's based on the cyclical nature of the commodity market. It's not predicated on projected demand. It's a low-cost producer.

Again, fitting in with SOCO's low-risk approach, the Merlon acquisition comes with 1,570 square kilometres of acreage with some 70% already covered by 3D seismic. The success rate for new wells drilled on the basis of 3D seismic in this acreage is around 59%. In addition, the wells, as SOCO points out, are of a repeatable format. Basically, low-cost. Incidentally, according to Wood Mackenzie, the average cost of drilling a well in the Western Desert over the last ten years has been US$3.8 million with many coming in at less than US$1 million. So it's not going to be betting the ranch on one well. The acquisition seems to present a lot of low-risk development opportunities.

However, what I really like is that SOCO appears to be moving down, in a technical sense. It's going from technically complex offshore South East Asia to something far more amenable and onshore. If it was taking on a project that was of a different scale and more technically challenging, it would be far riskier. This seems very digestible.

However, the one possible downside I do see is getting paid on time. The Egyptian economy has gone through a huge upheaval since the unrest of 2011. The shortage of US dollars compelled companies linked to the Egyptian Government to hold back US dollar payments to international oil companies. Fortunately, the situation has improved substantially. And, of course, the country was bailed out by the IMF in 2016. So, it seems to be in reform mode. It aims to clear those debts in full by the end of 2019. But even in a worse case scenario, getting paid late is not the same as not getting paid at all.