100 African Gold Stocks: Huge premium for $7.1bn Red Back takeover unleashes treasure hunt
In a recent interview, Mark Cutifani, CEO of AngloGold Ashanti, noted that his group “can bring a new project on at about $2,500/production ounce, against our major competitors in North America, who are doing the same sort of thing for $4,000/production ounce. “If you look at the new acquisitions that are being made, this is Kinross’s bid [in Canada] for Red Back, and Newcrest’s bid [in Australia] for Lihir; they're buying gold at around $7,000/ production ounce”. Indeed. All the names mentioned so far are global Tier I gold stocks, with the exception of Red Back, a Toronto-listed African miner, which currently carries a market value of just over USD 7bn. Applying the metric referred to by AngloGold Ashanti, Kinross and Newcrest are paying premiums of more than 100% for their latest acquisitions. More generally, gold stock valuations, relative to any other kind of miner (with the possible exception of primary silver, a very small global subsector) can be politely said to be over the top. For bigger gold miners, however, premium valuations are relative. The Kinross-Red Back merger involves paper, new Kinross shares, and no cash.
“Pure gold” miners such as Red Back and Lihir are in special demand, given the increasing tilt seen among bigger gold miners to polymetallic mines, as pure gold deposits become increasingly difficult to find, and dear to buy. Copper already constitutes important parts of some big names such as Barrick and Newmont, the world’s No 1 and 2 gold producers, by output. Kinross-Red Back will rank as a pure gold miner; Newcrest’s increasing tilt into copper will be tamed a little by its taking over Lihir. Red Back’s stock price has risen nearly 20 fold in the past five years. It has been a wonderful ride for any number of investors, who are now looking elsewhere, for the next long, rising wave with a gold lining. Red Back’s evolution has drawn attention to listed gold stocks active in Africa, of which about 100 can be counted. Those currently drawing strong attention as possible acquisition targets include Adamus Resources, Semafo, Golden Star, Nevsun Resources, Perseus Mining, Tanzanian Royalty, Centamin Egypt, Great Basin, High River, Oromin, and a number of smaller names such as Azumah Resources.
Some gold stocks in and around Africa
|
|
Stock |
From |
From |
Value |
|
|
price |
high* |
low* |
USD bn |
|
South Africa & beyond |
|
|
|
|
|
AngloGold Ashanti |
USD 42.84 |
-9.8% |
25.6% |
15.541 |
|
ZAR 104.14 |
-10.6% |
25.3% |
9.975 |
|
|
South Africa focus |
|
|
|
|
|
Harmony |
ZAR 75.38 |
-15.3% |
11.3% |
4.384 |
|
ZAR 0.92 |
-62.4% |
24.3% |
0.152 |
|
|
CAD 0.88 |
-77.7% |
23.9% |
0.150 |
|
|
ZAR 3.05 |
-54.6% |
5.2% |
0.158 |
|
|
ZAR 65.00 |
-33.7% |
51.5% |
0.246 |
|
|
AUD 0.28 |
-25.3% |
16.7% |
0.201 |
|
|
ZAR 0.30 |
-81.7% |
66.7% |
0.065 |
|
|
GBP 0.07 |
-24.6% |
33.3% |
0.142 |
|
|
AUD 0.02 |
-68.4% |
20.0% |
0.017 |
|
|
AUD 0.04 |
-69.7% |
7.3% |
0.005 |
|
|
Global & Africa |
|
|
|
|
|
Barrick |
USD 46.13 |
-3.9% |
38.5% |
45.462 |
|
USD 59.44 |
-6.2% |
52.2% |
28.810 |
|
|
USD 18.53 |
-11.8% |
66.3% |
6.890 |
|
|
Lihir |
AUD 4.38 |
-2.9% |
70.4% |
9.233 |
|
West Africa |
|
|
|
|
|
GBP 0.04 |
-31.0% |
690.9% |
0.015 |
|
|
AUD 0.25 |
-13.8% |
1472.3% |
0.034 |
|
|
AUD 0.07 |
-11.9% |
196.0% |
0.012 |
|
|
CAD 0.20 |
-31.0% |
60.0% |
0.031 |
|
|
CAD 1.90 |
-32.6% |
47.3% |
0.252 |
|
|
African Aura (LON:AAAM) |
CAD 1.27 |
-14.8% |
69.3% |
0.084 |
|
AUD 0.20 |
-54.5% |
45.2% |
0.031 |
|
|
Red Back |
CAD 29.91 |
0.0% |
182.2% |
7.238 |
|
CAD 0.45 |
-52.6% |
164.7% |
0.032 |
|
|
CAD 8.60 |
-5.8% |
305.7% |
2.180 |
|
|
AUD 0.14 |
-36.4% |
55.6% |
0.006 |
|
|
USD 4.64 |
-5.5% |
90.9% |
1.130 |
|
|
AUD 0.78 |
-40.0% |
30.0% |
0.273 |
|
|
CAD 4.66 |
-4.5% |
164.8% |
0.849 |
|
|
AUD 2.72 |
-6.2% |
231.7% |
1.020 |
|
|
CAD 0.44 |
-27.9% |
104.7% |
0.152 |
|
|
GBP 0.80 |
-23.4% |
61.6% |
0.152 |
|
|
AUD 0.92 |
-22.1% |
41.9% |
0.473 |
|
|
USD 6.19 |
-18.2% |
113.4% |
0.176 |
|
|
CAD 0.02 |
-76.5% |
33.3% |
0.003 |
|
|
AUD 0.80 |
-13.5% |
122.2% |
0.177 |
|
|
AUD 0.27 |
-5.4% |
231.3% |
0.023 |
|
|
AUD 0.56 |
-6.7% |
79.3% |
0.194 |
|
|
CAD 0.85 |
-19.0% |
86.8% |
0.054 |
|
|
CAD 0.09 |
-51.4% |
30.8% |
0.041 |
|
|
AUD 0.27 |
-28.9% |
35.0% |
0.035 |
|
|
USD 1.40 |
-2.1% |
133.3% |
0.048 |
|
|
CAD 0.20 |
-22.0% |
143.8% |
0.046 |
|
|
AUD 0.50 |
-6.6% |
371.4% |
0.094 |
|
|
CAD 0.45 |
-41.4% |
196.7% |
0.049 |
|
|
AUD 1.70 |
-12.8% |
372.2% |
0.270 |
|
|
AUD 0.41 |
-22.6% |
310.0% |
0.035 |
|
|
CAD 1.41 |
-21.2% |
872.4% |
0.176 |
|
|
CAD 0.37 |
0.0% |
722.2% |
0.016 |
|
|
CAD 0.50 |
-39.8% |
85.2% |
0.168 |
|
|
AUD 0.02 |
-69.1% |
82.8% |
0.018 |
|
|
CAD 0.11 |
0.0% |
100.0% |
0.007 |
|
|
CAD 0.55 |
-45.5% |
189.5% |
0.047 |
|
|
Pan African |
|
|
|
|
|
USD 90.90 |
-8.8% |
62.7% |
8.224 |
|
|
GBP 0.07 |
-24.6% |
33.3% |
0.142 |
|
|
GBP 0.10 |
-28.3% |
15.2% |
0.016 |
|
|
CAD 0.35 |
-52.7% |
25.0% |
0.014 |
|
|
GBP 0.01 |
-45.0% |
37.5% |
0.013 |
|
|
CAD 0.06 |
-40.0% |
20.0% |
0.028 |
|
|
Mwana Africa (LON:MWA) |
GBP 0.09 |
-48.7% |
40.0% |
0.069 |
|
CAD 0.18 |
-70.3% |
52.2% |
0.017 |
|
|
GBP 0.03 |
-66.2% |
15.8% |
0.025 |
|
|
Africa, other |
|
|
|
|
|
GBP 5.88 |
-14.2% |
13.0% |
3.735 |
|
|
Shanta Gold (LON:SHG) |
GBP 0.21 |
-27.4% |
277.8% |
0.042 |
|
CAD 1.75 |
-48.1% |
9.4% |
0.286 |
|
|
GBP 0.02 |
-46.8% |
42.0% |
0.008 |
|
|
CAD 0.21 |
-71.2% |
27.3% |
0.013 |
|
|
CAD 0.70 |
-56.3% |
7.7% |
0.028 |
|
|
CAD 0.53 |
-37.6% |
55.9% |
0.031 |
|
|
CAD 0.10 |
-75.0% |
0.0% |
0.011 |
|
|
CAD 0.35 |
-53.3% |
16.7% |
0.026 |
|
|
CAD 5.80 |
0.0% |
99.3% |
0.500 |
|
|
Centamin Egypt (LOM:CEY) |
CAD 2.85 |
0.0% |
100.7% |
2.767 |
|
GBP 0.30 |
-11.3% |
168.2% |
0.101 |
|
|
GMA Resources (LON:GMA) |
GBP 0.01 |
-78.8% |
23.8% |
0.010 |
|
CAD 1.30 |
-24.4% |
83.1% |
0.047 |
|
|
AUD 0.10 |
-25.9% |
127.3% |
0.021 |
|
|
GBP 0.11 |
-39.4% |
53.6% |
0.061 |
|
|
USD 0.25 |
-83.2% |
38.9% |
0.007 |
|
|
Red Rock (LON:RRR) |
GBP 0.02 |
-15.5% |
104.2% |
0.024 |
|
Also in Africa |
|
|
|
|
|
CAD 2.04 |
-13.9% |
3300.0% |
0.302 |
|
|
CAD 0.38 |
-47.2% |
17.2% |
0.034 |
|
|
USD 0.10 |
-79.6% |
11.1% |
0.007 |
|
|
Great Basin |
CAD 2.24 |
-2.6% |
63.5% |
0.735 |
|
AUD 0.25 |
-63.0% |
78.6% |
0.068 |
|
|
CAD 3.33 |
-17.8% |
1981.3% |
0.449 |
|
|
High River |
CAD 0.92 |
-6.1% |
192.1% |
0.694 |
|
CAD 4.00 |
-67.2% |
100.0% |
0.403 |
|
|
CAD 1.05 |
-2.8% |
78.0% |
0.102 |
|
|
Vatukoula Gold (LON:VGM) |
GBP 0.02 |
-31.0% |
62.6% |
0.106 |
|
CAD 1.90 |
-15.6% |
84.5% |
0.255 |
|
|
Avocet Mining (LON:AVO) |
GBP 1.13 |
-19.3% |
76.6% |
0.344 |
|
AUD 2.23 |
-14.6% |
46.7% |
0.657 |
|
|
CAD 0.12 |
-79.1% |
43.8% |
0.005 |
|
|
AUD 0.47 |
-29.8% |
64.6% |
0.088 |
|
|
CAD 0.69 |
-31.0% |
60.5% |
0.096 |
|
|
GBP 0.19 |
-54.3% |
7.1% |
0.014 |
|
|
Nyota Minerals (LON:NYO) |
GBP 0.17 |
-17.3% |
211.6% |
0.067 |
|
CAD 33.17 |
-3.6% |
30.7% |
3.571 |
|
|
Mainly copper |
|
|
|
|
|
First Quantum |
CAD 58.58 |
-41.6% |
21.5% |
4.454 |
|
GBP 0.04 |
-32.6% |
14.8% |
0.018 |
* 12 month
This article was written and market & company data crunched by Barry Sergeant of Mineweb (Johannesbourg), the world's top mining and mining investment news website
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This is not financial advice. Our content is intended to be used and must be used for information and education purposes only. Please read our disclaimer and terms and conditions to understand our obligations.
6 comments
With Gold above $1,500, I can see Gold Producers like Gma Resources (LON:GMA) being re-rated, as profit margins increase on existing output. IMHO
I agree P3. made a modest top up myself just after the open's massive fall around same level as yourself.181
Meanwhile, VGM getting spanked for a poor statement.
"Being spanked" - maybe. But the sell off was over done. VGM's report is not all bad.
Wendy Durham [who's mining articles and posts I regard as top class] has commented today on the VGM production costs [her post no. 801 from the VGM thread on the advfn website]. She comments as follows :
======
"But worth noting that VGM's costs can't really be compared with anyone else's. Because VGM put virtually everything from the mine's expense account into their cost-per-ounce figure - that figure is genuine total operating costs at the mine, and probably even includes the tealady's wages. I don't know of any other miner that is so up-front - they all fudge around with the numbers to make 'em look good. VGM don't."
==========
In my opinion there was opportunity for a top- up at around 180p today. We [Mrs p3 & I] took some at 179..5p and some at 180.5p . Tiime will tell if we made the correct decision in buying more VGM shares
Also WH Ireland have commented on the statement repeating its BUY rating and a 224p target price.
p3
Exciting RNS out on African Mining and Exploration AME This Morning: African Mining & Exploration (LON:AME)
HIGHLIGHTS
· Rock and channel sampling confirms the presence of gold mineralisation in bedrock at
the Fintakourouni target
· 47% of all Fintakourouni samples returned gold grades above a nominal 0.2g/t Au cut-off
grade
· Peak gold assays for Fintakourouni were 2.39, 3.31, 8.96 and 21.5 grams per tonne gold
("g/t Au")
· Waste dump and saprolite sampling over the Koukouroula and Karan targets has
outlined a broad zone of low-grade mineralisation centred around known major
structures, although no bedrock was sampled in these areas
· Peak gold assays for Koukouroula and Karan include 83.2, 36.6, 12.65, 9.08, 3.30 g/t Au
· Ground magnetic geophysics continues to define detailed structure increasing the total
strike length of the planned drill target to over 15 kilometres
Mark Jones, Chief Executive Officer of African Mining & Exploration commented:
"We believe these preliminary results are very encouraging. In particular I would like to highlight the discovery of gold mineralisation of note in bedrock, the apparent presence of a broad low-grade mineralised corridor extending either side of the extensive shear and fault zones and the discovery of cross-cutting faults which offers potential for high-grade gold mineralisation.
"The Company intends to complete the geophysical programme together with further sampling of these and the remaining priority targets identified within the Karan Licence. We also anticipate that RC drilling should commence this month, subject to rig availability".
http://www.investegate.co.uk/Article.aspx?id=201101100700051226Z
KIBO, GMA and VGM are all making strong moves to the Up Side, I feel due to the price of Gold also moving up