In­vestors ‘re­gain­ing favour’ with min­ing ex­plo­ration

Boss of newly-listed Cora Gold im­plies there is hope for pre-rev­enue nat­u­ral re­sources firms

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In­sti­tu­tional in­vestors are slowly re­gain­ing in­ter­est in min­ing ex­plo­ration sto­ries, ac­cord­ing to the boss of a newly-listed gold ex­plorer.

Jon Forster says he was im­pressed at the re­ac­tion to Cora Gold’s (CORA:AIM) IPO (ini­tial pub­lic of­fer­ing) mar­ket­ing road­show, given that the ex­plo­ration side of the min­ing sec­tor has been deeply unloved for the past four years.

Forster, who is CEO of Cora, ad­mits that hav­ing a link to Hum­ming­bird Re­sources (HUM:AIM) did help its cause when try­ing to raise cash ahead of its stock market de­but on 9 Oc­to­ber.

Cora se­cured £3.45m in new money to help ad­vance a va­ri­ety of prospects in­clud­ing as­sets pre­vi­ously owned by Hum­ming­bird in West Africa.

Hum­ming­bird is in the mid­dle of build­ing the Yan­fo­lila gold mine in Mali. It re­cently de­cided to stream­line its port­fo­lio to pri­mar­ily fo­cus on devel­op­ment work and sold some ex­plo­ration in­ter­ests to Cora in ex­change for be­com­ing an in­vestor in the busi­ness. Hum­ming­bird now owns 33.85% of Cora.

Some of the ex­plo­ration as­sets now in Cora’s port­fo­lio could po­ten­tially be­come sources of ore to be pro­cessed at Yan­fo­lila by Hum­ming­bird. Ini­tial drill work has found promis­ing lev­els of gold and fur­ther drilling is re­quired to bet­ter un­der­stand the ore body.

Co­in­cid­ing with work on these prospects will be fur­ther drilling on Cora’s flag­ship prop­erty called Sanankoro in south­ern Mali.

FTSE 100 miner Rand­gold Re­sources (RRS) and South African pro­ducer Gold Fields have pre­vi­ously ex­plored the prop­erty, pro­vid­ing Cora with sub­stan­tial amounts of his­tor­i­cal data al­though not enough to form a re­source state­ment. Forster says Cora is hop­ing to prove up 1m ounces of gold across the four per­mits which make up Sanankoro.

The third leg to the Cora story in­volves two ex­plo­ration projects called Dian­gounte and Ma­dine Fulbe in Mali, near the bor­der of Sene­gal. Forster be­lieves Dian­gounte could be a fu­ture sup­ply of ore for An­gloGold Ashanti’s Sa­di­ola gold mine which is lo­cated 6.5 kilo­me­tres away, should fur­ther ex­plo­ration prove the as­set is worth de­vel­op­ing.

Ma­dine Fulbe is a joint ven­ture with SN Min­er­als which hasn’t com­plied with the terms of the ex­plo­ration li­cence. The breaches of the le­gal and con­trac­tual obli­ga­tions present a risk that SN loses the li­cence, says Cora.

It is also worth not­ing that many of Cora’s ex­plo­ration li­cences are rel­a­tively short-term in na­ture and some have al­ready ex­pired and are await­ing re­newal.

Shares in Cora fell by 3.8% to 15.88p on its first day on the stock market. We be­lieve in­vest­ment group Glen­wick was be­hind the sell­ing. It ac­quired Cora stock in the sum­mer as set­tle­ment for costs as­so­ci­ated with a can­celled re­verse takeover of the min­ing busi­ness. (DC)

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