Can Resourceful PIIGS fly?

Can PIIGS fly again? No, that’s not a typographical error. I’m referring to Europe’s PIIGS – Portugal, Ireland, Italy, Greece and Spain - the continent’s sick men.

The aftermath of recession and financial crisis has left them struggling and their travails – particularly those of Greece – have hogged the economic headlines this year. Austerity and high unemployment have left their marks too. But they have also spawned a self-help mentality.

As part of this, our PIIGS are targeting what could be a huge and largely forgotten bounty of natural resources. And they are being helped in their endeavours by a handful of entrepreneurial junior explorers and miners.

Here we look at the projects that just might get our PIIGS airborne once more.

Spain: Mine developments a focal point of a crucial important year

In Spain it promises to be a big year for two AIM quoted diggers that are at the forefront of a mining renaissance. Assuming all goes to schedule both Ormonde and EMED will bring brown-field mine developments online in 2013. The former with a strategically important tungsten project and the latter with the historic and iconic Rio Tinto copper mine.

The first quarter will be key to both projects. If the projects are to meet their respective year end commissioning deadlines, vital government approvals will have to be secured before the first three months are up.

Producing an expected 227,000 tonnes of tungsten, Ormonde's Barruecopardo operation will satisfy 12% of the world's non-Chinese demand. The People's Republic has a tight grip on the tungsten market, dominating both global production and consumption. Meanwhile EMED's Rio Tinto will initially start as a 5mln tonne a year operation, using old but reconditioned equipment.

However further development in the future adds a great deal of blue sky to the initial plan, potentially beyond the 12.5mln tonne a year marker.

W Resources is another AIM miner pursuing a project in Spain, with the go-ahead expected for the Parrilla tailings processing project imminently - following environmental sign off last month. Construction work could begin as early as January, should approvals come in time, for the facilities at Parrilla which will process 330,000 tonnes of tailings to yield 28,000 tonnes of tungsten and 26 tonnes of tin a year.

Beyond that it also has an option to acquire the historic mine for a potential re-development project.

Portugal

W Resources is also working to expand the Portalegre gold project in Portugal, where it has had consistent drill results and exploration continues.

Canadian junior Colt Resources is the biggest landholder in Portugal with a portfolio that includes two advanced stage projects - the Boe Fe gold mine in the south and the Armamar-Meda tungsten project in the north of the country.

Elsewhere, fellow Canadian Lundin is active in the country with the latter set to produce 55,000-60,000 tonnes of copper and 25,000-30,000 tonnes zinc from the Neves-Corvo mine.

And the government is keen to incentivise further mining investment with the country boasting resources such as tungsten, gold, silver, iron ore and tin.

Ireland

It has been a landmark year for Ireland's emergent offshore oil industry as it has for Providence Resources, the explorer whose success in the Celtic Sea has led to a 150% rise in the stock. The coming months may, however, prove to be even more significant. In early 2013, US oil giant ExxonMobil will drill the Dunquin prospect in the Porcupine basin, off Ireland's west coast.

Estimated at 1.7bln barrels Dunquin is a major prospect. It is thought the Porcupine is host to the kind of deep Atlantic Rift reservoirs seen on Tullow's Jubilee field in Ghana, Shell's Zaedyus target in Guyane, South America, and those in the Jeanne D'Arc basin in Canada.

Providence owns a 16% stake in Dunquin - alongside operator Exxon (27.5%), Italy's ENI (27.5%), Spanish major Repsol (25%) and privately owned Sosina (4%). Later next year it hopes to land a development partner to take the 2.7bln barrel Barryroe project forward.

Although the immediate focus in Ireland is on deep water conventional oil there is also earlier stage interest in the country's shale potential. ENEGI Oil for one believes the Clare basin, in the west of Ireland, could be as prolific as the Marcellus and Woodford shale plays in the US.

Italy

The Italian government, under technocrat leader Mario Monti, has also tried to boost investment in oil and gas with a more expeditious attitude to permitting and a more even-handed revision to prohibitions on offshore drilling.

AIM quoted Sound Oil, which has more than doubled in value in recent months, has re-jigged its business to focus almost exclusively on Italy. And it promises to be a key focus for small cap investors in the months ahead.

Having had its plans signed off by the authorities month Sound is now working to start gas production at the Rapagnano field in coming weeks, and it is also awaiting the green-light for the Nervesa and Strombone appraisal projects. Both projects could yield near term gas production for Sound if they're a success.

Offshore, the revision to Italy's environmental laws - which banned oil drilling within five miles of the coast, and up to 12 miles in some specific places - has brought a number of project back onto the development table.

In August the restrictions were eased, allowing companies to get back to work on projects where production applications made before the ban was introduced in 2010.

Petroceltic, Mediterranean Oil & Gas and Northern Petroleum are among the firms that are now resurrecting previously shelved plans.

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