Opportunities with depth
Future in companies exploring African mining opportunities
EASING COMMODITY PRICES have opened up buying opportunities in mining exploration companies operating on the African continent. While the market has only noticed the slight drop in the prices of gold and copper over the past month, directors of mining companies have noticed the buying opportunities those created. Gold has fallen from US$980/oz to below $920/oz, while copper has dipped from about $9 000/t to $8 100/t.
Three directors at junior exploration play African Eagle Resources have taken advantage of the share’s slump to strengthen their portfolios with 630 000 shares. Led by deputy chairman Euan Worthington with 450 000 shares, the directors paid just more than 5p for each of their shares for a total £325 380 (R4,7m). African Eagle is listed both on London’s Alternative Investment Market (AIM) and the AltX on the JSE.
The lowest ever 5,15p/share in London translates to 74c/share at the current exchange rate while it’s actually trading at 90c/share in Johannesburg. It should be noted that in both currencies the share is at its lowest in its five-year trading history as a listed company, coming from a peak of 28p in 2005 and 250c/share soon after listing on the AltX a year ago.
It’s rather surprising that the market accords such a low value to African Eagle at a time when all seems to be going well in its exploration endeavours in the three African markets in which it operates: at the Miyabi, Igurubi and Rupa gold projects at Lake Victoria Goldfield in Tanzania, collectively with proven gold resources in excess of 1m ounces. Projects in Zambia’s Copperbelt are at feasibility stages, while its 2007 applications for 11 exploration licences in Mozambique have all been granted.
Its projects in the Niassa region are prospecting for copper, nickel and PGE Miner- alisation, while those at Sena and Tambara in central Mozambique are gold and uranium prospects. African Eagle also holds rights to prospect for uranium at eight locations in all three countries.
“Our most advanced project – at Mkushi in Zambia – is only four months from delivery of the final feasibility and opening of the mine,” says African Eagle CE Mark Parker. He says the pre-feasibility study results published in February had a net current value of $70m. “We believe that will increase in the final feasibility. The value of our share of the Mkushi project (49%) will surpass current market value of the whole company.” African Eagle’s current market capitalisation is around R187m in Johannesburg and £12m in London. Parker expects the final result to confirm
Regular buyer appearance. Connie van Nieuwkerk