Chalice Gold Mines
Chalice Gold Mines Limited has released its latest presentation which will be made to the Africa Mining Congress and Indaba Mining shortly. Please click here to view the presentation.
Chalice Gold Mines would particularly like to draw your attention to the Company’s Mogoraib North Project, outlined in the presentation, which will be the focus of a drilling campaign starting shortly.
Mining Indaba
Mining Indaba (Mining Indaba Cape Town, February 6th– 9th, 2012) attracts mining analysts, fund managers, investment specialists and financiers from around the world.
Corporate presentations on the newest and most successful projects provide the foundation for institutional portfolio growth and asset diversification.
Government and agency presentations update policies and incentives for potential partners. Attendance is limited to professional investors and industry.
Speakers are by invitation and include top global economists, industry analysts and mining management.
Delegates who participate in the Mining Indaba conference develop essential knowledge, and experience first-hand the rewards and risks of investing in more than 130 mineral-rich countries around the world.
They personally meet the policymakers of these nations, and hear case studies of successful and unsuccessful ventures.
Mining Indaba provides companies with an ideal platform on which to build shareholder base, and with exposure to the most influential professionals specializing in natural resources worldwide. More information can be found
Mr. Michael Hopley, President & C.E.O. of Sunridge Gold will be speaking on Tuesday, February 7th, 2012 at 4:38pm in Hall 4
Also take the chance to meet Sunridge Gold Corp and Nevsun Resources Ltd.’s Cocktail Reception on February 8th, 2012 from 5:00pm to 8:00pm at the Westin Grand Cape Town Hotel in Vasca Da Gama Room.
QInvest, Qatar’s leading Investment bank, has acquired 30.5% of Al Nakheel Agriculture and Trading Company W.L.L. and AG Middle East LLC (together the “Group”). Based in Doha, Qatar, the companies specialize in providing landscaping and related maintenance services to governmental, corporate and industrial customers.
This acquisition is the fourth private equity transaction completed by QInvest in the MENA region and is consistent with its strategy to partner with established businesses that are in need for growth capital to achieve their expansion objectives.
Al Nakheel is a fully integrated landscaping and Maintenance Company established in Qatar in 1998. AG Middle East, established in 1976, is a landscape and irrigation services company involved in the construction, improvement and maintenance of commercial and governmental properties. Al Nakheel’s prestigious projects include The Pearl Qatar, Museum of Islamic Art Parks, Qatar Education City Convention Center, Barwa City, Dahlak Island Resort – Eritrea and Sidra Medical Research Canter. AGME’s prestigious projects include Doha 2006 Asian Games Village Hard & Soft Landscaping Works, Doha Golf Course, Ritz Carlton Hotel and the West Bay Lagoon Landscaping Works.
Commenting on the acquisition, QInvest’s CEO, Shahzad Shahbaz, said: “this investment represents the firm’s strategy to diversify its portfolio within the service sector. Our partnerships with Qatari organizations represent QInvest’s commitment to contribute to the growth of the private businesses in Qatar and the region aiming to benefit from the strong growth of the Qatari economy and the government’s strategy to expand and diversify the market”.
H.E. Sheikh Mohammed Bin Fahd Al Thani, Chairman and majority shareholder of the Group, commented, “We are very happy partnering with QInvest and look forward to their support to help us retain our leading position in the market, institutionalize our business and strengthen our operations. We plan on leveraging this relationship to further expand our business and take it to the next level.”
Anuj Khanna, QInvest’s Head of Investment Management, said: “Al Nakheel Agriculture and Trading Company and AG Middle East have a long and successful track record of serving their customers’ needs and have executed several landmark projects in Qatar. We are pleased to have the opportunity to partner with the existing shareholders and management team of both companies to help them realise their objectives.”
He added, “This is our second investment in the outsourced services sector, which is one of our target sectors for investment in Qatar and the region. We believe that Qatar’s strong fundamentals and outlook will benefit the Group as customers undertake major infrastructure and development projects over the next decade. The availability of increasingly sophisticated and environmentally friendly landscaping and maintenance solutions will be appreciated by customers as they drive the exciting transformation of Qatar over the next few years.”
QInvest via Marketwatch
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Port Massawa Eritrea
By Berhane Woldu
Eritrea’s Strategic Location along the Red Sea provides ideal exposure to one of the world’s busiest shipping lines and established linkages to other areas of the region and beyond.
The port of Massawa is a transit point for goods to the Middle East, European and Asian Markets. The development of the port is poised to bring about potential gains to trade.
The establishment of a Free Port Zone at Massawa is further expected to boost trade prospects within the already established Middle Eastern and African Markets. The Massawa Airport is equally capable of facilitating traded goods in transit to regional and global destinations.
Investment in exploration activities for reserves of oil, natural gas, and otherminerals provide a potential source for the expansion of export receipts. Eritrea’s natural mineral resources include gold, copper, potash, zinc, oil, natural gas, cement, gypsum, granite, marble, ceramics, limestone and iron ore.
The Bisha Mining Company, which is a mining conglomerate between the government and a Canadian company (NEVESUN), has started production in early 2010. The company produced more than 390,000 oz of gold during the first year of operation and expected to produce more than 450,000 oz in the second year. Copper production will begin in the second year and peak at 184-million pounds of copper in the fifth year of operation. The mine will begin producing zinc in its sixth year. There are many more mining contracts on the making. The potash mine in Danakil Depression with a planed output of up to 10,000 ton a day life span of over 150 years, the Zara and Dubrba gold mining Eritrea stands to share in hundreds of billions of dollars in mining profits.
PRIVATE SECTORE DEVELOPMENT
The private sector is seen as the major development partner, an engine of growth that will help jump start the economy and eventually lead to long-term growth in the Governments development agenda- as explicitly indicated in the Macro Policy document (1994). The Government has achieved so much at adopting favorable monetary and fiscal policy, reduced regulatory framework and bottlenecks by offering incentives and avoiding trade and other related barriers to attract private sector investment and to expand exports.
In line with the macro-policy objectives, a revised investment code was issued in 1994. The main objective of the investment code is to promote investment in Eritrea as well as develop and use the country’s natural resources. Within this broader objective, the investment code intends to achieve objectives including, the promotion of exports, encouragement of competitive import substitution industries, enhancing transfer of new technology, securing equitable regional growth, development of small-and medium-scale enterprises, and expansion of employment opportunities (GOE, 1994: 5).
The Eritrean investment code also provides various incentives for domestic and foreign investment. The investment code further outlines that there will be no taxes on declared dividends; any corporate profit that is set aside for reinvestment will be taxed at the rate of 20%. Furthermore, there shall be no exchange controls for remitting dividends and capital gains, and foreign investors are free to repatriate their profits.
The investment code provides various benefits to investors. For instance, profit and dividends of investors, payments for a foreign loan, fees, royalties, or proceeds received from liquidation of investment and/or expansion, and payment received from the sale of transfer of shares will be remitted in accordance with the rate of exchange prevailing at that time. There is no minimum threshold value of investment. Moreover, with the exception of domestic retail and whole sale trade, import, and commission agency that requires bilateral agreements of reciprocity with the country of investor, all areas of investment are open to all investors both foreign and domestic (GOE, 1994:6). Foreign capital may establish any enterprise on its own or in partnership with local capital.
Moreover, the investment code guarantee, that capital and other associated foreign-owned assets will not be nationalized without due laws. To this effect, Eritrea has also signed the convention establishing Multilateral Investment Guarantee Agency (MIGA) and the convention on the Settlement of Investment Disputes between States and Nationals of other States(GOE, 1998: 20). It established, The Investment Center, which is the legal body responsible for the promotion of investment. Issuance of certification to investors with a maximum delay of 10 days (GOE, 1994:15), Land Proclamation that provides usufruct rights for the long-term up to 99 years has been issued since 1994 and is expected to facilitate the allocation of land for investors (GOE, 1994; IMF, 1996:9).
Significant progress has been made since independence regarding the liberalization of trade policy.
The 1994 Legal Notice 18/1994 reduced the number of import tariffs to twelve. Capital goods, raw materials, and semi-processed goods have only a2 % tariff. Basic goods duties range from 3 to 20%.
In addition, customs procedures were simplified. In the mid-1990s, the government began major investments in infrastructure, roads, electricity, dams, and port operations to support the further development of exports.
To expand the market for import and export potentials the country entered into active membership in regional organizations such as IGAD and COMESA.
INVESTMENT ENVIRONMENT
Peace and security are the main pillars of a true and conducive investment environment in Eritrea. The economic policy underlines the necessity to have a market lead economic system. The private sector should have the upper hand in all economic sectors with the government to intervene in major public shares. The following are some of the steps taken for a better investment environment:
INVESTMENT INCENTIVES IN ERITREA
The investment policy of Eritrea provides the following incentives to foreign and domestic companies.
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Below an excerpt of an interview with Kwong-Mun Achong, a mining analyst with Northern Securities with a focus on both precious and base metal equities. He previously worked at a Canadian bank owned dealer and at a U.S.-based brokerage. Achong Low obtained both his Master of Business Administration and Bachelor of Science degree in mechanical engineering from the University of Toronto. The full interview was published by The Gold Report.
TGR: In a report, you suggest that Sunridge Gold is one of the more misunderstood stories in the junior gold sector. What misconceptions about Sunridge would you like to correct?
KAL: The biggest misconception is that Eritrea is a bad place to do business. I visited the property in November and saw firsthand that it is a very determined country working to put additional business-friendly policies in place. The people are very friendly and hard working. The United Nations Security Council clouded that view when it put further sanctions on the country in December after some neighboring countries accused it of supporting militant groups, but I think the accusations are politically motivated. Russia and China both abstained from the vote. Also, Russia went on record saying that the evidence of Eritrea’s link to the planned attacks in Addis Ababa was not conclusive.
TGR: But there is unrest in the region. Are you factoring that into a discount rate?
KAL: Definitely. Whether it’s true or not, the market does perceive additional risk in Eritrea. We only use a multiple of 0.4x our net asset value whereas other companies in our space could get from 0.5–1.0x.
TGR: What were your thoughts about the Asmara project when you visited?
KAL: It is very close to infrastructure. You can drive to the site in a matter of minutes. The topography is very supportive of open-pit mining as it is very flat with lots of room to put the mill facilities and tailings pond. It’s also very close to a willing workforce.
TGR: Are there any majors operating in Eritrea right now?
KAL: None that I know are active in the area. There are a number of Chinese companies with interest including the Shanghai Construction Group that recently bid for Chalice Gold Mines Ltd. (CXN:TSX; CHN:ASX), though the others have nothing as advanced as Sunridge or Nevsun Resources Ltd. (NSU:TSX; NSU:NYSE.A).
TGR: Does Nevsun have the cash flow to pull off a takeover?
KAL: For sure. It is producing a lot of gold at one of the lowest cash operating costs in the industry. Last year it produced about 380 thousand ounces of gold and the cash costs for the first three quarters were about $285/ounce (oz). However, I’m not sure that, if it were to expand, it would want to get another asset in Eritrea.
TGR: On the one hand, you’re saying there’s not as much risk as people think, but in this example, you are intimating that there is still a significant amount of risk there?
KAL: There is perceived risk. If a company like Nevsun has a main asset there and it’s not getting the full value that it should for it, then there’s no need to wait around for the market to clue in. It can just take its cash and go after something that the market will recognize.
TGR: What should move Sunridge stock to your 12-month target price of $1/share?
KAL: Of its four main deposits, it has combined three of them into one prefeasibility study due out in about four months. The fourth deposit, the Debarwa deposit to the south of Asmara, has a feasibility study due in the next couple of months. As the market sees that there is real economic benefit to these projects and there is a clear line to their production, Sunridge should get rewarded for that.
TGR: Debarwa is really the crown jewel here, right?
KAL: It’s the highest grade and it may be the closest to production, though I think the crown jewel is Emba Derho, with 62 Mt of VMS.
TGR: What’s the resource there?
KAL: It’s almost 600,000 oz gold, 1 Blb copper and 2 Blb zinc at Emba Derho.
TGR: What’s the estimated production timeline there?
KAL: It could be as early as 2015. After the feasibility is completed, it could start applying for its permits. Sunridge has already started talking with government officials, so I don’t think that will take as long as it has for other companies, like Nevsun.
TGR: Are there any other companies that you would like to discuss today?
KAL: It’s not one that I cover, but it is in a very stable country: Seafield Resources Ltd. (SFF:TSX.V:). It is advancing its Quinchia gold project in Colombia. It is expecting a resource update at its Miraflores deposit by the end of this month and a PEA in a few months. Quinchia currently has 2.5 Moz in global resource and with the new management appearing settled, the relative valuation and news flow makes this stock one to watch.
TGR: Do you have some parting thoughts for our readers?
KAL: Investors need to take the speculation out and do additional due diligence because it’s a stock-picking market. Investors need to look for companies that have good news flow, really good management and an asset that is good enough to put into production when they invest in it.
TGR: Thanks.
Kwong-Mun Achong Low is a mining analyst with Northern Securities with a focus on both precious and base metal equities. He previously worked at a Canadian bank owned dealer and at a U.S.-based brokerage. Achong Low obtained both his Master of Business Administration and Bachelor of Science degree in mechanical engineering from the University of Toronto.
Want to read more exclusive Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Exclusive Interviews page.
DISCLOSURE: 1) Brian Sylvester of The Gold Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None. 2) The following companies mentioned in the interview are sponsors of The Gold Report: Golden Predator Corp., Sunridge Gold Corp. Streetwise Reports does not accept stock in exchange for services. 3) Kwong-Mun Achong Low: I personally and/or my family own shares of the following companies mentioned in this interview: None. I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise for participating in this story.( Companies Mentioned: MIN:TSX.V, GPD:TSX, NSU:TSX; NSU:NYSE.A, PRB:TSX.V, SFF:TSX.V:, SGC:TSX.V,) The Gold Report
Interview: By The Gold Report
COMPANIES MENTIONED: AUREUS MINING INC. - CONDOR RESOURCES PLC - KIRKLAND LAKE GOLD INC. – NYOTA MINERALS LTD. – RAMBLER METALS & MINING - SUNRIDGE GOLD CORP. - TORO GOLD LTD
Christopher Welch, a mining analyst with Ocean Equities, has been crisscrossing the Atlantic for most of the last year. He tells The Gold Report in this exclusive interview that recent trips have bolstered his conviction that mining plays in Africa are being overlooked, but it’s not too late for investors to get in on the ground floor.
The Gold Report: Most of your coverage universe at Ocean Equities consists of precious metals juniors with exploration- or development-stage projects. Why do you cover these types of companies?
Christopher Welch: It’s the end of the market where our expertise has the biggest effect, particularly since my colleagues and I are either geologists or experienced industry professionals. We can look at ground where we know it’s going to be prospective. We can look at the very early-stage exploration results and know if they are encouraging.
We still cover some big, producing companies. One of our biggest companies under coverage isKirkland Lake Gold Inc. (KGI:TSX), which is a growing intermediate producer. But we’ve had such an effect on the junior exploration end because that’s where our strengths lie.
TGR: Most of your companies have sub-$100 million (M) market caps with gold and/or copper projects based in Africa, Canada or Nicaragua. What criteria do you use to choose these small-cap companies?
CW: We look at management, the ore body, exploration results, the geology of the region and country risk. We don’t have a mandate to follow specific parts of the world, although we know where we feel comfortable operating. If it’s a country where one of the research teams feels quite happy jumping on a plane, spending a few days in a tent on the ground and looking at the grassroots exploration data, that’s a country we wouldn’t mind doing business in.
TGR: You regularly go and visit these projects?
CW: Taking a job as a mining analyst is essentially getting a ticket on a plane somewhere. I’ve been crisscrossing the Atlantic for most of the last year. Our technical expertise and professional experience mean that when we get to the ground, we know what to look for. It’s not a case of taking drilling results on trust. We look at the drill core and can see what’s good. It’s a lot of gut instinct and knowing what feels right. You can look at the lay of the land and say, “Yes, I can see the deposits here. I can see that this could be an open pit or the plant could go here, and there are no environmental or social issues.” You have to get in and kick the tires to add value.
TGR: Do you believe that African mining stories are underrepresented in investors’ portfolios?
CW: Yes. Over the last 10 years, contemporary exploration techniques have been applied to parts of Africa that were considered high risk, like Eritrea, Ethiopia and Liberia. However, there have been large-scale risk profile changes in these countries.
Liberia is one of the best countries in Africa because of its transparency. There is now a combination of overlooked resources with safer governments, so it’s just another scramble to get into these countries and establish companies that can turn natural resources into profits for both the company and the host country.
If you’re not exposed to the African mining story, you haven’t missed the boat, but it’s something you should look at quickly.
TGR: Are you concerned about another Charles Taylor, the former president of Liberia accused of war crimes, coming to power in these countries after you’ve invested heavily in them?
CW: Charles Taylor’s regime was definitely a product of ignorance of the Western world to what was going on in that part of Africa. Now there is more free press in Africa and there are a lot of African businesspeople who are involved in making their countries better. I know that all the issues across Africa aren’t solved, but we won’t go to a country where we think there could be a risk. We have a very good understanding of what’s going on across Africa. African risk can’t be painted with a broad brush. Every region globally has its drawbacks. Some might say that laws in British Columbia are perhaps overly onerous on environmental licensing, for example.
TGR: An interesting company in Ocean’s stable is Sunridge Gold Corp. (SGC:TSX.V). Tell us how you came across it and why you picked that one.
CW: It’s definitely one of the more encouraging companies in that region because it’s so undervalued. I constantly ask, “Where am I going to go next to find the overlooked or the best deposit?” That part of the Arabian-Nubian Shield really comes to the fore as the most overlooked part of the globe to find volcanic massive sulphide (VMS) deposits that have good grades. They don’t always have the biggest scale, but the grade means that the mines that get developed can be quite profitable.
If you take just one of the components of Sunridge’s project portfolio, its contained zinc for example, it has a greater gross in-situ metal value than the market cap of the company. So we think that Sunridge offers great potential.
TGR: What were your thoughts after visiting the Asmara gold project?
CW: My colleague was there recently as part of a larger trip around Eritrea and was very encouraged with what he saw. He said it looked very positive. Sunridge is in the prefeasibility stage on the Asmara project, which is part of a group of projects around the capital city.
TGR: Do you think that it will spin some of those assets out into a separate company?
CW: I think it will keep all of them under the same umbrella. It doesn’t have a huge footprint in Eritrea. It’s big, but manageable. Those projects will do very well when they combine and share infrastructure. Eritrea does need a fair amount of infrastructure to get up to the standards required for the mining. The company will likely build something centralized to take concentrate from different parts of its portfolio.
TGR: Is it a takeover target?
CW: It’s definitely enticing. It has ground in a great country with great prospects. Any sort of mid-tier company that’s looking to bolt on some high-grade VMS targets and near-term gold production capacity should be looking at it.
TGR: Are there plans to take Toro Gold Ltd., a private junior with a gold project in Senegal, public?
CW: It’s something the company would like to do, but not at the expense of shareholders. It has quite a market-savvy management team. It has done exceedingly well to get its Mako project on its feet. Recent results for Mako show great grades: 3 grams of turnover into sections of up to 40 meters. It’s one of the best grassroots discoveries in that part of Africa. There are definitely plans to take it to market, but it has to be done at the right time. I hope it will be within the next 12 months, but it’s up to the company to say.
TGR: Initial tests have shown that Toro’s deposits host free gold.
CW: The bottle roll test results are very encouraging, but the ultimate metallurgical process has yet to be determined. It looks like there is very little arsenic in the area, so it should be free gold. Toro has a large amount of ground, but it still has to do early-stage reconnaissance exploration, so there’s a lot of growth there. It’s in a part of Africa, which we call the Kenieba Window, which has been overlooked.
TGR: Many of our readers follow the junior mining sector quite closely, but few would have heard ofNyota Minerals Ltd. (NYO:AIM; NYO:ASX), which is conducting a definitive feasibility study on its Tulu Kapi deposit in Ethiopia. Nyota is about to announce a measured resource for the Tulu Kapi project in H112, as well as a maiden resource for other claim blocks in the area. Tell our readers about that story.
CW: It is in the same geological terrain as Sunridge, on the western half of the Arabian-Nubian Shield, which is very old rocks that have been somewhat agitated by the rift in the area. It’s in a very geologically prospective part of the world, but it’s been overlooked simply due to the historic Ethiopian-Eritrean conflict that’s now resolved.
Nyota is progressing on its Tulu Kapi project. The new chief executive, Richard Chase, who took the reins in mid-2011, really has a good handle on what could be quite a robust open-pit project. It has a mineable grade after internal dilution of over 2 grams/tonne. Tulu Kapi is going to be quite a good story.
Nyota is also going to be the first public company to receive a mining license in Ethiopia. It put in its application in Q311. Ethiopia is very prospective, particularly parts of the western highlands. We’ve seen many major mining companies coming into the country to try and grab ground and capture the essence of the geology of Ethiopia. Nyota has this fantastic, early-mover advantage in that it has a large land package with known targets, but also it has the key to good exploration—high-level operating geologists with Ethiopian backgrounds who can go and do the grassroots exploration very well. Nyota has a great future ahead of it.
TGR: A lot of investors still perceive Ethiopia as a risk. Does it give you a measure of confidence given that a number of larger mining companies are coming into that country?
CW: Yes, it does. The Internal Finance Corp. (IFC) of the World Bank has been a shareholder in Nyota for a long time, and the IFC has perhaps one of the most rigorous sets of due-diligence tests for its investments. The area of Ethiopia that Nyota is operating is lush, green pasture. It poured with rain the entire time we were there. Ethiopia has a good future ahead of it. It acknowledges its natural resources could be a key for developing and expanding its growth prospects. Personally, I don’t think the risk in Ethiopia is that high.
TGR: What are your preferred countries in Africa for mining development?
CW: Ethiopia, Eritrea and parts of Sudan are the most overlooked for ease of operation. Mali and Burkina Faso are developing into good countries to operate in, but my pick of the bunch is Liberia.
Just to give due respect to Ellen Johnson Sirleaf, the president of Liberia, she’s done an awful lot to clean up the country. In particular, the Extractive Industries Transparency Initiative that she’s taken on board in Liberia has really set the country up to benefit from iron-ore price growth. It has potential to be the largest iron-ore producer on the continent.
Liberia also has gold in the north with Aureus Mining Inc. (AUE:TSX; AUE:AIM), which is developing the New Liberty project.
TGR: That really is fascinating given that country’s history.
CW: It just proves the point that the opportunities come up when you have on-the-ground, grassroots operating knowledge from people who go into the country and say, “Look, I know what you think about Liberia, but honestly, go, see, look. Go to the country, visit it and when you get there, you’ll see that it’s open for business.”
TGR: Condor Resources Plc (CNR:LSE) has the promising La India gold project in Nicaragua. The one eyebrow-raising fact about Condor is that it’s just a small junior with a relatively small market cap, but it has about 560M shares outstanding. Are you concerned by a management team that would allow that level of dilution?
CW: The large number of shares is just a legacy and something that the company can do something about quite easily. A chief executive has a lot of techniques in his arsenal to reduce that, and I dare say there will be some form of consolidation in the future. Condor is a company that’s changed dramatically over the last two years. It’s taken a small resource in Nicaragua and grown it to a substantial 1.6 million ounces. In 2009 Condor had a robust resource in Nicaragua but it suffered capital constraints due to the global financial crisis and then the El Salvadoran moratorium on mining. This was when it suffered the dilution. That is now water under the bridge and it is moving forward.
TGR: Perhaps the most promising part of that project is the central breccia zone. Tell us about what the company continues to find there.
CW: It’s one of the largest scale mineralizations. Condor has plenty with a narrow vein, but high-grade, gold currencies cross its property. What is going to make a huge difference for the company is finding the bulk tonnage deposits where it can do either open-pit development or larger-scale underground development.
Condor found the central breccia toward the end of last year when it put in a trench to look at the bedrock. The initial grades of that sampling were very encouraging. Subsequently, it put in two drill holes and the results are likewise encouraging. It also extended the trench, and we’re waiting for an update from the company on those results. All signs are that it found something significant with a larger scale to it.
It’s a very good sign for Condor that it’s found the central breccia, but there are other areas where bulk tonnage of mineralization exist, which it could exploit through larger-scale mining techniques.
TGR: There are also other mines nearby, which could lead to a takeover.
CW: Exactly. Obviously, I don’t think it’s something that Condor is going to aim for immediately. In our discussions with the company, it’s all for just keeping its head down. It has an objective, it has a strategy to achieve that objective and it’s going to take the La India project as far down the development track as it can.
But it’s an interesting part of the world. Obviously, there is a lot of gold in Nicaragua, which in Central America is one of the more stable areas to operate in. There are larger-scale operations in the country. Whether one of the other Nicaraguan players would be the one to take Condor out or whether there might be a rollup by another company, I don’t know. At the moment, Condor has a lot it can do to increase the value of its portfolio.
TGR: Rambler Metals & Mining Plc (RAB:TSX; RMM:AIM) just started producing gold from its Ming mine in Newfoundland and Labrador. It has already forward-sold some of its production to Sandstorm Resources Ltd. (SSL:TSX.V). It’s one of those that quietly came into production. How did you find out about this story?
CW: It has the trifecta of things I look for in a mining project: management, geology and a stable location. Newfoundland and Rambler have it all in spades. It did come into production quietly, but that doesn’t detract from the story. It’s just been overlooked. It’s in a part of the world that has the last of the low-hanging, high-grade fruit for the same reasons that we look at parts of the Arabian-Nubian Shield. That part of Newfoundland has the same VMS deposits with a strong grade. Rambler definitely has that in the Ming mine, which has very good grades of copper, gold and some associated silver as well.
Rambler took on a loan to keep the project moving forward at a time when gold prices were much lower than they are now, and it did seem like a very sound decision for the company to make at the time. Now that gold is at the price it is, you can look back and say, “Well, I don’t think it was a good move,” but you play the cards that you’re dealt. I think George Ogilvie, the chief executive of the company, has done very well to get it up and running. It’s in a gold production phase just because it can produce gold at the higher price. It’s giving some of its revenue of gold away, but the payoff of the gold line is not having a dramatic negative effect on its cash flow. Later on this year, it’s going to go into a copper production phase where it’s going to increase its revenue.
TGR: How did you discover it?
CW: It came in through one of the mine organizers and management of a company that we’ve dealt with for a good time and trust.
TGR: You’re going to keep that a secret.
CW: The mining industry is a relatively small game. There is no better commodity than knowledge and trust in certain mine managers.
TGR: Sprott Resource has put some money into that project as well. When you get players like Sandstorm and Sprott involved, obviously the numbers add up.
CW: I know Sprott did an awful lot of technical due diligence on the project, so it must be very comfortable. It’s a very good deal for Sprott, as well as for Rambler.
TGR: Looking at the small-cap mining sector into 2012, do you expect a rebound or are we going to see more headwinds?
CW: We’re going to get an overall flight to quality. There are a lot of projects out there that are going to stand out from the crowd. We’ll see some re-ratings and some heads pop out from the parapet to show themselves to be above-average mining plays.
The pullback in mining shares and mine management becoming more cautious are going to pay dividends for the mining companies in the mid term. One thing we know is that resources are scarce. It’s getting harder and harder to find the projects, particularly good gold and copper projects. We’ve lost another field season in 2011 and a lot of people brought their drill rigs home rather than overspend during a downturn, so it’s going to be harder to find the projects in the development pipeline that can fill the metal supply gaps that develop.
When demand comes back to Asia or North America, there won’t be a sufficient number of projects in the development pipeline to feed that demand.
TGR: Thanks for your insights.
Christopher Welch holds a master’s in international business management and a Bachelor of Science (Honors) in geology from University College London and an Advanced Certificate in economics from Birkbeck University. Before joining Ocean Equities, Welch spent four years with Bloomsbury Minerals Economics as a copper analyst, prior to which he worked as a geologist in Lesotho.
Want to read more exclusive Gold Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Exclusive Interviews page.
DISCLOSURE:
1) Brian Sylvester of The Gold Report conducted this interview. He personally and/or his family own shares of the following companies mentioned in this interview: None.
2) The following companies mentioned in the interview are sponsors of The Gold Report: Condor Resource Plc, Sunridge Gold Corp. Streetwise Reports does not accept stock in exchange for services.
3) Christopher Welch: I personally and/or my family own shares of the following companies mentioned in this interview: Condor Resources Plc, Rambler Metals & Mining Plc and Nyota Minerals Ltd. I personally and/or my family am paid by the following companies mentioned in this interview: None. I was not paid by Streetwise for participating in this story.
Mining Indaba
South Boulder Mines Managing Director and CEO Lorry Huges is going to present on Wednesday, 8th February at 11:30am at the 18th Annual Investing in African Mining Indaba Convnetion in Cape Town.
The Mining conference will take place at the Cape Town International Convention Centre from the 6th-9th of February 2012. With some 6500 professionals, representing more than 1000 international companies and about 45 African and non-African government delegations from all the major mining countries of the world, Mining Indaba is the sector’s largest gathering of influential decision-makers, financiers, investors (institutional, hedge funds, sovereign funds, merchant banks, stock exchanges, and commodities exchanges), stakeholders, mining professionals and governments.
Mining Indaba’s delegations represent 100 countries across four continents. From chief executive officer of the world’s largest mining company to chief investment officers of renownded international banks, you will find an elite gathering of professionals all interested in one common deonominator – fuelling investments in the African mininv value chain.
South Boulder Mines Ltd recently announced the appointment of Mr Flavio Garofalo in the new role of Chief Financial Officer, effective from February 2012.
Mr Garofalo is an experienced finance and corporate executive who has over 20 years experience in the mining industry and was previously Chief Financial Officer and Finance Director for Kagara Ltd.
Mr Lorry Hughes CEO and MD of South Boulder said that “The appointment of Mr Garofalo reflects the growth of South Boulder as it continues the transition into a significant potash producer from the Colluli Potash Project in Eritrea. Mr Garofalo has successfully undertaken the transition of a number of listed companies from developer to producer and has strong financial links and experience from within the Asia region.”
In addition Mr Garofalo will make significant strategic contributions to South Boulder’s development of the Duketon nickel and gold projects and the planned in specie distribution of the assets to shareholders.
For more information visit: Mining Indaba
Below is an excerpt from an article published by Bloomberg:
African Boom
Five of the 20 projected fastest-growing countries last year were in Africa, including Ghana at 13.5 percent; Eritrea at 8.2 percent; Ethiopia at 7.5 percent; and Mozambique at 7.2 percent, the International Monetary Fund said.
O’Neill said non-BRICs emerging markets need to improve performance in economic policy, education and technology to sustain their strong growth.
The Goldman Sachs N-11 Equity Fund has lost 10.7 percent since inception on Feb. 28 while the Goldman Sachs BRIC Fund lost 24.3 percent. The Standard and Poor’s 500 Index (SPX) lost 5.3 percent in the same period.
Even as the BRICs slow, they may still outpace the developed world over the coming decades, enabling their share of global GDP to rise to almost 40 percent by 2050, Goldman estimates.
O’Neill’s book “The Growth Map,” published last month, says the group still has “rosy prospects.” He estimates that even with slower growth, the BRICs economies will collectively be bigger than the U.S. by 2015.
The full article can be found here: Bloomberg
Asmara Bus
Asmara, 1 January 2011, Shabait – In line with the huge investments directed towards securing reliable and competent transport services to the public, busses that were imported recently have become operational in transporting people to and from Asmara and the regions of the nation.
In statements to ERINA, beneficiaries expressed their joy over the fact that they are using new and comfortable buses with the advent of the New Year.
They further said that the commencement of the new and modern buses within a short time of their importing is a leap forward to a higher stage of development.
The nationals further pointed out that the importing of the new busses that have become operational as of, is an indication of care and attention given to the people by their government.
Zara Project
SHANGHAI Dec 27 - A subsidiary of Shanghai Construction Group Co. Ltd. will acquire gold mining assets in Eritrea, according to a company announcement.
Shanghai Construction will acquire a 60 percent equity stake in Zara Mining Share Co. for $80 million, the statement said, citing a framework agreement signed by the two companies.
The deal also gives Shanghai Construction the option to acquire additional mining rights from Zara for areas where gold reserves have not yet been confirmed.
Shanghai Construction will conduct the acquisition through wholly-owned subsidiary China Shanghai (Group) Corporation for Foreign Economic & Technological Cooperation (SEFCO Group).
SEFCO is involved in various infrastructure projects overseas, including Vietnam, where it is building a 40,000-seat stadium in the capital Hanoi, a coal-fired thermal power plant, and a conference center, according to its website.
The company is also building a liquified petroleum gas pipeline and terminal project in Pakistan and has worked on some of Shanghai’s highest-profile infrastructure projects, including the Shanghai World Financial Center, the country’s tallest skyscraper.
Reuters
Gippsland Limited (‘Gippsland’ or ‘the Company’) [ASX: GIP, FRA: GIX] is pleased to announce that it has received the final levelled data for the 5,161 line-kilometre airborne geophysical survey over the Adobha and Gerasi South licence areas in Northern Eritrea held by its wholly owned subsidiary Adobha Resources (Eritrea) Pty Ltd. The airborne geophysical survey covered 19 target areas selected on the basis of Thematic
Mapper (TM) anomalies, geological targets, and geochemical anomalies identified during geochemicalsurveys by Gippsland completed during late October to early November 2009, May 2010 and July 2011. The survey was flown by Geotech Airborne Limited using a Versatile Time Domain Electro Magnetic system (VTEM) at a line spacing of 200m with a nominal height of 80-120m determined by the topography. Aeromagnetic data was also acquired as part of the survey.
Interpretation of the data by the Company’s consultant geophysicist has identified 16 electro-magnetic (EM) anomalies which have been ranked on the basis of their EM response (intensity and decay rate), geological setting, proximity to TM anomalies and presence of coincident geochemical anomalies.
It is encouraging to note that in the central part of the project area there is a close association between the VTEM anomalies and regional drainage geochemical anomalies identified from the geochemical sampling completed during July 2011. The regional geochemical sampling could not be completed due to the lack of helicopter availability and will recommence when a suitable helicopter is available.
Field inspection of the EM anomalies was completed in early October in order to determine appropriate further exploration with a view to drill testing at the earliest opportunity. Access to the VTEM anomalies varies considerably with some easily accessible for drilling whereas some will require light portable drilling rigs to be flown in by helicopter
Follow-up exploration in the areas of the VTEM anomalies has commenced with programmes of geological mapping, in-fill drainage sampling, and soil and rock-chip sampling. Gravity surveys are being planned for the high to medium priority VTEM anomalie
The Company has submitted an application for an Exploration Licence to cover the area to the west of the granted Adobha and Gerasi South Exploration Licences.
http://www.gippslandltd.com/upload/docs/111222_ASX_Eritrean_Geophysical_Survey_Update.pdf
Ian Gandel Chairman
For further detail, contact info@gippslandltd.com Suite 4, 207 Stirling Highway Claremont WA 6010 Australia Phone +61 8 9340 6000
Mines and Money London 2011, December 6-7, Business Design Centre, Islington, London.
With London’s established prominence as the financial partner in the global mining industry, Mines and Money London is an invaluable channel for the global mining industry to cultivate long term partnerships with the city’s mining stakeholders and investors.
Mines and Money London brings together some of the most influential decision makers within mining companies, the investment community, governments and professional services.
Recognised as the best international forum for networking in London, Hong Kong, Beijing and Sydney, these events are fixtures in the diaries of industry leaders. Amongst the exhibitors: South Boulder Mines, Sunridge Gold, Chalice Gold and others with projects in Eritrea.
