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The following AIM listed companies will be attending the Indaba mining conference in Cape Town from 3-5 Feb 2014: African Potash, Alecto Minerals, Armadale Capital, Beacon Hill Resources, Ferrex and North River Resources.
African Potash mkt cap £9.43 million, share price 4p
AIM listed African Potash is focussed on sub-Saharan potash assets and is currently developing its 702.5 sq km Lake Dinga Project Area in the Republic of Congo. The project, which is one of the last licences within this globally recognised region to be held outside a major state owned Chinese developer, is contiguous to Elemental’s world-class Sintoukola Potash Project. Sintoukola is the primary driver behind the takeover offer by a Chinese firm (Dingyi) at A$0.66 per Elemental share. This takeover bid values Elemental at A$190 million – a stark contrast to AFPO’s £4.5 million capitalisation, underlining the significant uplift potential of exploration at Lake Dinga, which has demonstrated the potential to host the same style of mineralisation as its neighbour Sintoukola. In line with this, AFPO has secured a data sharing agreement with Elemental, in addition to appointing Simon Dorling, the senior CSA Global consultant who advanced Sintoukola through to its bankable feasibility stage, in order to rapidly prove up the significant potash potential at Lake Dinga.
CEO Ed Marlow will be attending the conference.
Alecto Minerals mkt cap £11.09 million, share price 1.86p
Alecto Minerals Plc is a gold and base metal exploration and development company listed on AIM with assets in Mali, Ethiopia and Mauritania. In mid-2013 the Company acquired the Kossanto Gold Project in Mali which already has a current gold resource of 107,000 ounces and is located in the centre of the Kenieba inlier in western Mali. This area hosts many significant gold deposits in Senegal and Mali, making it one of the most important gold regions in Africa.
Having signed a joint venture with Centamin over two prospective gold exploration licences in Ethiopia which sees Alecto retain exposure to the assets with no capital expenditure, the on-going development of Kossanto is the Company’s predominant operational focus during 2014. The resource is based on just one of three very prospective target areas, demonstrating the significant value upside potential available at the tenure. A drilling programme commenced in Q4 2013 to expand the initial resource at Gourbassi East as well as to advance the Company’s understanding of the mineralisation at a second target, Gourbassi West. Therefore, the coming weeks will see plenty of newsflow as drill results begin to flow through to the market. Importantly, very extensive artisanal work at the third target, Massakama, has highlighted the strong potential of this new gold discovery within the licence area and the Company is conducting work at the project in order to advance it, representing a new source of news.
The Company also owns 100% of the Wad Amour IOCG Project in Mauritania which is at exploration status. Over the coming months, the Company will be publishing its exploration plans at both its Mauritanian and Ethiopian assets. In summary, the Company has a strong and diverse portfolio of prospective resource assets, which have been endorsed by prominent industry players, and have exciting exploration upside potential which will be unlocked over 2014.
CEO Mark Jones will be attending the conference.
Armadale Capital mkt cap £5.56 million, share price 0.18p
Armadale is one of AIM’s best performers over recent months – with the share price currently trading up 147% in the past 6 months (from 0.07p in August 2013 to 0.18p today) with very healthy volumes averaging 51,876,435 daily during this period. This follows the Board adopting a new strategy to focus on investing in natural resource projects in Africa.
The Company has a portfolio of investment assets, which includes:
· 100% interest in Netcom Global Inc., which holds an 80% interest in the highly prospective, low-cost, Mpokoto Gold Project in the Katanga Province in the south of the Democratic Republic of Congo. Mpokoto has an estimated JORC resource 510,000oz gold (‘Au’) from 11.2 million tonnes (‘Mt’) @ 1.42g/t Au at a cut-off grade of 0.5g/t, with highs of 27.9m @ 7.8g/t Au and mineralisation that appears metallurgically simple and so amenable to a low-cost heap leach operation. Since acquiring an initial 15% interest in Netcom (and in turn Mpokoto) in August 2013, Armadale increased its interest in Netcom to 100% in November 2013 and has implemented a defined development strategy focused on proving additional high grade gold mineralisation with a view to commencing commercial production in 2015.
· ~40% interest in Mine Restoration Investments Ltd (‘MRI’), a South African listed company, which aims to develop profitable operations within the South African mining industry through its coal briquetting operation in KwaZulu Natal, which commenced commercial operations in November 2013, and its acid mine drainage technology in the Witwatersrand basins.
In addition, Armadale has a small portfolio of listed investments which are focused on gold production and exploration and the Company continues to maintain an active acquisition strategy, and will review investment opportunities that they believe have the potential to be accretive in terms of shareholder value.
With a defined strategy in place focused on rapidly advancing the Mpokoto Gold Project in order to prove up the resource and commence production in 2015, and revenue generation expected in the near term from MRI’s coal briquetting operations, Armadale is set for strong news flow going forward.
Director Justin Lewis will be attending the conference.
Beacon Hill Resources mkt cap £15.66 million, share price 0.95p
Beacon Hill Resources plc (AIM: BHR) is swiftly moving towards becoming a Tier One cash cost coking coal producer at its Minas Moatize mine in Tete, Mozambique. With a prime position in this emerging coal producing district, and with rail allocation already secured, this small but highly commercial mine provides investors with exposure to a premium hard coking coal product with plenty of expansion and value upside.
As with all commodities, investor interest in coking coal has waxed and waned over recent years, however the Board of Beacon Hill are confident in the future prospects and demand fundamentals of coking coal, which is used as a constituent ingredient in the production of steel, and a scare commodity globally. With this in mind, Beacon Hill is positioning itself to become a tier one cash cost producer in order to benefit from solid margins for its hard coking coal product, which it expects to produce in the near term, even during downturns in the resources cycle. This prudent approach to mine development should ensure the economics remain robust whilst coal prices are depressed, and should transform the project into a highly profitable asset as prices recover, which is widely forecasted.
Minas Moatize, which is surrounded by the majors in the very heart of the Tete coking coal district, has a current Run of Mine Proven and Probable (P&P) Reserve of 39.38 million tonnes (‘Mt’), equating to a total P&P saleable Reserve of 16.16 million tonnes, of which at least 8.3 million tonnes is coking coal. This Reserve confirms that Minas Moatize has a current mine life of up to 15 years; however the Board are actively pursuing expansion opportunities in addition to vertical integration through the evaluation of a metallurgical coke plant, in addition to power generation from its thermal coal product.
Chairman Justin Farr-Jones and CEO Rowan Karstel will be attending the conference.
Ferrex Plc, mkt cap £15.56 million, share price 1.85p
Ferrex is a leading iron-ore and manganese development company in west and southern Africa, focused on advancing low capex deposits up the development curve and into production. Ferrex has a solid portfolio of three core assets, all of which are ideally located close to established infrastructure and the coming year will be highly active for the Company as it focusses on their adding value to its portfolio.
The Company recently signed an agreement with Anglo American and Kumba Iron Ore which will see these groups fund the exploration of Ferrex’s Mebaga DSO project and surrounding areas over a period of up to two years, providing the Company with access to significant value upside without expenditure. This deal, which was a highly exciting development for the company, is targeted for completion in February 2014 and reinforces the Board’s confidence in Mebaga as a leading DSO iron ore project in West Africa.
1 – Mebaga Iron Ore, Gabon, is a high grade DSO project located in an extensive iron ore rich province in the north of the country. It has an exploration target of 90 to 150mt @ 35 to 65% Fe (Oxide target) and 550mt to 900mt @ 25% to 40% Fe (Primary target) over an 8km strike length. In addition a further 11km of strike has been identified which provides significant upside potential. Magnetic images taken by Ferrex also emphasise that the Company’s Mebaga trend has the most extensive outcropping banded iron formation (BIF) horizon in northern Gabon with approximately 80% of the BIF horizon lying within Ferrex’s Mebaga concession. An initial nine hole drilling programme, which has been conducted over 1km of the identified 19km strike, has recorded DSO with a best assay of 63% Fe.
2 – Nayega Manganese, Togo, is being advanced as a low capex manganese mine with a view to generating early cashflow for the Company. Nayega, in northern Togo is 30km away from a main road which has >500,000t per annum back loading capabilities and direct access to the regionally important deepwater port of Lome 600km away. The project has a JORC Inferred resource of 11Mt @13.1% Mn and an internal desktop scoping study indicated low capital costs of circa US$15million to establish a 250,000t per annum mining operation with operating costs of approximately US$2 /dmtu FOB. A Definitive Feasibility Study is underway and is due to be completed on receipt of the Mining Licence which is under application.
3 – Malelane Iron Ore, South Africa, is located just 6 km from a reliable rail line that runs to the Port of Maputo in Mozambique, 170 km away. A scoping study has been completed illustrating the robust economics of developing Malelane as an initial 1.8Mtpa open pit, low strip ratio operation with a 57% Fe product over a 16.6 year LOM. At these production rates, the project has a NPV of US$523m and an IRR of 72%, with a capital cost of US$139m and capital intensity of US$77/t, which places it in the lowest quartile of new iron ore projects globally. In terms of exploration, three distinct BIF horizons have been identified having a combined strike length of 14km. Ferrex has only completed drilling over 1km of the 14km strike leading to the Inferred Resource of 139Mt at 37% Fe (from which the scoping study has been based upon), however the project has a total exploration target of 1.6bt to 2.0bt at 28-30 % which illustrates the expansive nature of Malelane for the future.
With a multi-project portfolio offering significant near-term value uplift potential through resource and mine development programmes; a strong future project pipeline with additional low-capex manganese and iron-ore projects targeted; and a proven management team with an aggressive strategy to drive the Company forward to become a medium scale, low cost producer of minerals for the steel industry, Ferrex offers a compelling investment opportunity.
Managing Director Dave Reeves will be attending the conference.
North River Resources mkt cap £7.49m, share price 0.6p
North River is developing a portfolio of base metal assets in Namibia, with a primary focus on its flagship Namib Lead-Zinc Project. The project is centred around a previously producing mine which is estimated to have produced approximately 700,000 tonnes of ore, equating to over 100,000 tonnes of lead and zinc concentrate, and over 1,000,000 ounces of silver until its closure, brought about by a mixture of union disputes and low commodity prices, in 1992.
With a strategy to commence production from the tailings next year, which have a current JORC Resource of 610,000 tonnes at 0.3% lead, 2.1 zinc and 7.6g/t silver, and thereafter moving on to the high grade mine itself, the board plans to generate revenues with low capex and low costs. There is also significant resource expansion potential from around the mine itself, which has a current JORC Resource of 917,000 tonnes at 2.4% lead, 5.7% zinc and 44.8g/t silver, in addition to the assessment of the numerous satellite mineralised zones around the mine, only a fraction of which have been drilled to date.
Managing Director Martin French is attending the conference.
