LON:SAV | African Mining & Exploration (AME) - New Growth Mining Company

4th Jan '11 by flyingswan

5 comments 5952 reads

African Mining & Exploration (LON:AME)

A relatively new company which I felt obliged to buy even though the price stubbornly refused to drop nearer to the placement price of 10p.
Currently 10.5 - 11.25.
A gold play in Mali, I have attached the admission details and exploration report.
Any information on the merits of the management and other comments welcomed. AME

AFRICAN MINING & EXPLORATION PLC
("AME" or the "Company")

ADMISSION TO TRADING ON AIM

African Mining & Exploration Plc (LSE-AIM: AME), a group focused on the exploration and development of gold assets in West Africa, today announces the placing of 50,000,000 new Ordinary Shares of 1 pence each to new investors and the admission of the Ordinary Shares to trading on the AIM Market of the London Stock Exchange.

Singer Capital Markets Limited is acting as the Company's nominated adviser and broker in relation to the Placing and Admission.

Admission Details

Number of Existing Ordinary Shares 20,811,500
Number of Placing Shares 50,000,000
Placing Price 10p
Net proceeds of the Placing to be received by the Company £4.3 million
Issued share capital following Admission 70,811,500
Number of Warrants in issue following Admission 70,811,500
Market capitalisation of the Company at the Placing Price on Admission £7.1 million

Company background
AME is the holding company of a group focussed on the exploration and development of gold assets in West Africa. Through New Mines, which was acquired by the Company upon Admission, the Group holds mining exploration permits for the Karan and Diatissan Permit Areas which are located in Western Mali.

The Company's principal objective is to discover and mine commercially viable gold deposits for the benefit of Shareholders and the welfare of the communities where the Group will operate.

Mali is a country with a well-established mining sector and it is the Company's intention to maximise the benefits inherent in a mining friendly environment where local expertise, skills and mining infrastructure already exists.

The Directors believe that significant potential exists for the discovery of new economic gold mines in Mali and the presence of a significant number of well established gold producers offers scope for future joint ventures and other business arrangements likely to be beneficial to Shareholders.

The Board has a proven track record…

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flyingswan

4th Jan '11

I quite like the PowerPoint Presentation a good summery of AME forward looking prospects:

http://www.ameplc.co.uk/company/Presentation1.ppt

5th Jan '11

Folks have a read of the projects page here (I always find the story of the one kilogramme per tonne and one kilogram gold nuggest reassuring just before sample assay news...)

Perhaps they will report the assays as percentage non-gold dirt - maybe that would be easier ;-)

http://www.ameplc.co.uk/projects

15th Jan '11

African Mining poised to drill: African Mining & Exploration (LON:AME)

http://www.growthcompany.co.uk/news/1312246/african-mining-poised-to-drill.thtml

5th Feb '11

Tipped in IC next week

BULL POINTS: African Mining & Exploration (LON:AME)

? Large acreage in good mining region

? Strong evidence of gold

? Funded for imminent drilling

? Close to infrastructure

BEAR POINTS:

? High exploration risk

? Some political risk

African Mining & Exploration (AME), whose shares were admitted to the Alternative Investment Market in November, has sizeable greenfield exploration acreage in Mali, a country that has several world class gold mines. The company's acreage is already extensively worked by local miners with picks and shovels, so there is no doubting that gold is there. Now the company is about to launch a drilling programme with a target of finding 1m ounces of gold. True, abject failure would wipe out the company's value, but if the results are close to the target, the share price could treble

Mali is fast developing into one of Africa's largest gold producers and hosts several sizeable deposits being mined by majors. These include Sadiola Hill (owned by IAMGOLD, with a reserve of 5m ounces), Loulo (Randgold Resources, 7m ounces) and Morila (Randgold Resources and AngloGold Ashanti, 4m ounces). The country is politically stable and democratic by west Africa's standards, though the current president led the military coup that removed the previous authoritarian regime in 1991. Mali also has decent infrastructure and AME's key project, Karan, lies just off a main tarmac road, close to electricity, geological services and an international-standard testing laboratory

The long history of local people mining on the Karan permit adds strong evidence for the existence of significant gold ore. Locals have mined the area for 200 years down to depths of 20 metres. Up to 300 people dig and pan daily over several kilometres of the estimated 8km length of mineralisation. Indeed, the village of Karan depends on its cottage gold industry and the local miners have clearly delineated the gold-bearing region. Finding gold in the bedrock provides evidence that mineralisation exists at depth that that artisans cannot reach. There are even anecdotal reports of nuggets being found weighing up to 1kg.

While extensive so-called artisanal activity is an important indicator of the potential, AME still has to drill holes to prove that the ore can support an economic mine. When AME's shares came to Aim, its resource potential – and a management team combining gold mining and West African experience – attracted backing by some leading funds. This helped the company raise £4.3m after expenses and AME plans to spend £1m this year to drill around 30 holes. The first drill results are expected before May and could provide significant momentum for the share price.

Prior to drilling, it’s difficult to speculate how much value might be held in AME's acreage. Nevertheless, shares in comparable West African gold miners trade at an average valuation of $67 (£42) per resource ounce, according to broker Singer Capital Markets. Apply that valuation to AME's hoped-for 1m ounces and you get maximum value of £45m, while the minimum value would, theoretically, be zero. So AME's share price is much closer to reflecting abject failure than total success. Sure, there is lots of risk in the project so a big discount to potential net asset value is sensible. Even so, it's easy to see how the share price could double or triple – perhaps when AME announces some successful drilling results in late spring. Buy.

7th Feb '11

African Mining & Exploration (LON:AME) RNS Out:

"All known structures and mineralisation, to date, appear to be confined within a significant structural corridor that extends the full length of the Licence over an area of approximately 100km2. This represents a larger target area than previously anticipated by AME. The Company has now planned a series of inclined RC holes which will focus initially on four priority targets all located within the corridor, Fintakourouni, Mana, Koukouroula and Kouroudjin."

Evidence of a structural corridor covering an area of 100km2

confirmation of a north - south major shear structure that extends the length of the Licence;

This represents a larger target area than previously anticipated by AME.

The apparent scale of the structural corridor within the Karan Licence has required the Company to review the exploration and as a result we have significantly expanded the RC drilling programme.

http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail.html?announcementId=10781365

Looking good .... drilling not long away.... IMHO

African Mining & Exploration (AME) - New Growth Mining Company

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Flyingswan

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