Op­por­tu­ni­ties with depth

Fu­ture in com­pa­nies ex­plor­ing African min­ing op­por­tu­ni­ties

Finweek English Edition - - Companies & Markets -

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

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