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Beyond Moto – African gold stocks rock

On the wild side, a glance at hot spots among 80 listed mining stocks active in African gold exploration, development and production.

Moto Goldmines disappeared from stock market listings this week, following its friendly takeover by a joint venture involving AngloGold Ashanti and Randgold Resources, the target being more than 20m ounces of gold that have been outlined at the Moto project in the far north east Democratic Republic of the Congo. The transaction has further intensified investor interest in listed gold stocks active on the continent as a whole; at least 80 names can be identified.

A good number of these stocks currently rank as the world’s most in-demand gold stocks, as indicated by the table that follows this article.

While gold mining in South Africa has been very much a formal activity for well over a century, various kinds of gold mining activity have for many centuries characterised gold belts located in parts of Africa. New “discoveries” are indeed rediscoveries; relative to the gold belts available, very little modern exploration has taken place. In the DRC, as an instance, the semi-continuous Kilo Moto greenstone belt is currently under exploration by Moto Goldmines, AngloGold Ashanti (separately, to the south) and Mwana Africa.

London-listed Mwana recently announced an initial resource of 452,000 ounces of gold outlined on the Zani-Kodo trend within the Kilo Moto gold district. The general Kilo Moto location is remote, and the new Moto JV partners will be budgeting good amounts of money for basic infrastructure, and rehabilitation of one or more of a number of run-down hydropower facilities.

History shows, however, that these are old hats, albeit good ones. The semi-continuous Kilo Moto greenstone belt was exploited primarily in the 1950s and 1960s by Belgian charter companies, producing more than 3m ounces of a total recorded 11m ounces of gold production from hard-rock mines in the Kilo Moto belt. The mining was mainly focused on surface operations, a mixture of alluvials and shallow oxide pits.

 

The concessions are like small countries. To the south of Zani-Kodo lies what’s currently known as Mongbwalu, where the 10,000 km2 kilometer concession 40 (AngloGold Ashanti, 86.22% and OKIMO (a DRC parastatal), 13.78%) is being extensively explored by AngloGold Ashanti. Mwana Africa, in a 80:20 JV formed with OKIMO, holds gold mining rights over 1,610 km2 in Orientale Province.

The Moto Goldmines project, 570km north east of the city of Kisangani and 150km west of the Ugandan border town of Arua, covers an aggregate lease area of some 1,841 km2. Activities to date have primarily focused on just 35 km2 surrounding the old Durba gold mine, where a monumental resource of 25.7m ounces of gold has been outlined.

Some considerable distance to the south, Banro holds gold concessions in the Kivu provinces, stretching west of Lake Kivu. Mine build at Twangiza, nearest deposit to Bukavu, is underway. Annual production from the first phase plant is anticipated at between 80,000 and 110,000 ounces of gold a year. London-based Mark Smith of GMP Securities Europe fancies the Banro story: “We have tracked the evolution of Banro in terms of the development of the gold projects and the share price performance. 

“The share price chart appears to have mirrored the classic ‘resource value curve’, from exploration discovery through to resource expansion and project development. We believe Banro is entering the fourth phase in the mining project life cycle, given recent development land marks.

“First, in June 2009 Banro raised C$100m to commence the development of the Twangiza oxide gold project. Second, in August 2009 Banro purchased a refurbished 1.0m tons a year CIP plant from Australia and plans to expand the plant to 1.3Mtpa.Third, in August 2009 the DRC government ratified Banro’s four mining licences and agreed on the fiscal terms for the 25 year exploitation permits. Four, in September 2009 Banro appointed Standard Chartered as the debt advisor to raise the project debt for Twangiza”. 

EAST-TO-CENTRAL AFRICAN GOLD BELTS

 

Tanzania:

 

 

Resources

1. AngloGold Ashanti – Geita

 

12.86Moz

2. Barrick – Bulyanhulu

 

13.65Moz

3. Barrick – Tulawaka

 

 

 0.17Moz

4. Barrick – North Mara

 

4.22Moz

5. Barrick – Buzwagi

 

 

4.17Moz

6. Iamgold – Buck Reef

 

 

1.0Moz

7. Resolute – Golden Pride

 

1.40Moz

 

 

 

 

DRC:

 

 

 

1.       Moto Goldmines JV

 

22.52Moz

2.       AngloGold Ashanti – Mongbwalu

 

2.94Moz

3.       Mwana Africa – Zani-Kodo

 

 0.452Moz

4.       Banro – Twangiza-Namoya belt

11.18Moz

In its initial phase, Banro is to opt for diesel rather than hydroelectric power; capital expenditure is anticipated at around US$145m. Further phases, and capital outlays, could see output at the multi million ounce Twangiza property increase to 300,000 ounces a year. There is gold all over the place: there is evidence of considerable artisanal activity on parts of Banro’s considerable concessions.

With at least 80 listed gold stocks active in African gold, there is lots of competition to attract investor interest. Some of these stocks are out of the top draw, such as Barrick, the world’s biggest gold miner by output and market value. There are other Tier I global gold miners with operations on the continent, in the form of AngloGold Ashanti, as mentioned, Gold Fields, Harmony, and Newmont, which has concentrated on West Africa, just as Barrick has on East Africa.

Further down the pecking order, there are a dozen or so African gold stocks that attract what may loosely be described as interest from professional investment analysts. 

AFRICA GOLD STOCKS

DRAWING ANALYST INTEREST

Ampella Mining

Banro

Azumah Resources

Moto Goldmines

Resolute Mining

Etruscan Resources

Crew Gold

Adamus Resources

Keegan Resources

Perseus Mining

Gryphon Minerals

Cluff Gold

Semafo

Golden Star

Nevsun Resources

Centamin Egypt

Red Back

Randgold Resources

Of these, however, about half a dozen can be classified as attracting “detailed interest”, and would typically include Randgold Resources, Red Back, Centamin Egypt, Resolute Mining, Mineral Deposits, Nevsun Resources, Perseus Mining, and Adamus Resources. Some of the smaller stocks are also moving onto analytical radar screens; London’s Fairfax recently published a report on Ampella Mining which has assembled concessions over a monumental 110km strike length of concessions in Burkina Faso. There is powerful evidence that Ampella is on its way to establishing a multi-million ounce resource.

Specialist (non-South African) African gold names – which may also be active outside the continent – with a market value of US$500m or more include Randgold Resources, Red Back, Semafo, Golden Star, Perseus Mining (nearly), Mineral Deposits, Centamin Egypt, Great Basin, and CGA Mining (nearly).

Stocks that have notched up price increases of more than 1,000% since the deep troughs seen for equities of all kinds during the closing months of 2008 include Medoro Resources, African Aura (a recent merger that took in Mano River Resources), African Gold Group, Keegan Resources, PMI Gold, Pelangio, Ampella Mining, African Queen, Sunridge Gold, New Dawn (a handy measure of investor perceptions of the goings-on in Zimbabwe), KIG Mining, and, of course, that stock up there orbiting earth with the satellites, La Mancha Resources.

Selected gold stocks active in Africa

 

 

Stock

From

From

Value

 

price

high*

low*

USD bn

South Africa & beyond

 

 

 

 

AngloGold Ashanti

USD 43.43

-6.7%

224.8%

15.724

Gold Fields

ZAR 106.16

-15.1%

99.4%

10.048

Harmony

ZAR 83.66

-37.0%

35.0%

4.786

South Africa focus

 

 

 

 

Simmer & Jack

ZAR 1.89

-47.1%

28.6%

0.310

First Uranium

CAD 2.90

-63.8%

168.5%

0.459

DRDGold

ZAR 5.16

-46.0%

80.4%

0.263

Wits Gold

ZAR 87.00

0.0%

299.0%

0.326

Gold One

AUD 0.33

-66.3%

230.0%

0.246

Central Rand

ZAR 2.00

-75.0%

5.3%

0.066

Pan African

GBP 0.08

-5.8%

333.3%

0.188

Pamodzi Gold

Suspended

 

 

 

Mintails

AUD 0.04

-51.1%

109.5%

0.038

West Wits Mining

AUD 0.12

-20.7%

296.6%

0.013

Global & Africa

 

 

 

 

Barrick

USD 37.93

-9.9%

119.6%

37.279

Newmont

USD 45.52

-8.7%

115.0%

21.837

Iamgold

USD 13.95

-12.0%

528.4%

5.128

West Africa

 

 

 

 

Goldstone Resources

GBP 0.02

-43.5%

400.0%

0.004

Avnel Gold

CAD 0.13

-56.9%

525.0%

0.010

Medoro Resources

CAD 0.68

-27.7%

2166.7%

0.125

African Aura

CAD 1.30

-7.1%

1525.0%

0.049

Randgold Resources

USD 72.97

-5.2%

227.5%

6.051

Red Back

CAD 13.34

-5.4%

306.7%

2.921

African Gold Group

CAD 0.41

-2.4%

1266.7%

0.025

Semafo

CAD 3.38

-4.0%

350.7%

0.804

Golden Star

USD 3.52

-7.4%

780.0%

0.791

Resolute Mining

AUD 0.82

-4.7%

123.3%

0.288

Nevsun Resources

CAD 3.20

-10.9%

814.3%

0.390

Perseus Mining

AUD 1.73

-1.1%

769.3%

0.485

Etruscan Resources

CAD 0.57

-14.9%

225.7%

0.086

Cluff Gold

GBP 0.77

-4.0%

653.7%

0.149

Mineral Deposits

AUD 1.01

-2.9%

260.7%

0.526

Keegan Resources

USD 4.78

-7.0%

1226.7%

0.136

Searchgold Resources

CAD 0.03

-40.0%

200.0%

0.004

Gryphon Minerals

AUD 0.54

-2.7%

815.3%

0.088

Shield Mining

AUD 0.14

-26.3%

677.8%

0.009

Adamus Resources

AUD 0.44

-17.0%

340.0%

0.116

Orezone

CAD 0.65

-13.3%

150.0%

0.033

Axmin

CAD 0.15

-14.3%

400.0%

0.043

PMI Gold

CAD 0.15

0.0%

1400.0%

0.017

Azumah Resources

AUD 0.25

-19.4%

525.0%

0.036

Pelangio

CAD 0.50

-23.8%

1880.0%

0.050

Ampella Mining

AUD 0.59

-10.6%

1272.1%

0.070

Castle Minerals

AUD 0.26

-5.6%

183.3%

0.015

Volta Resources

CAD 0.39

-17.9%

680.0%

0.020

North Atlantic Resources

CAD 0.07

-65.0%

250.0%

0.002

Avion Resources

CAD 0.31

-32.6%

785.7%

0.062

Signature Metals

AUD 0.04

-32.7%

825.0%

0.024

Channel Resources

CAD 0.09

-35.7%

800.0%

0.005

Riverstone Resources

CAD 0.23

-41.8%

318.2%

0.011

Pan African

 

 

 

 

Africa West

CAD 0.06

-38.9%

120.0%

0.002

Pan African

GBP 0.08

-5.8%

333.3%

0.188

Goldplat

GBP 0.13

-5.6%

52.2%

0.023

African Queen

CAD 0.72

0.0%

1100.0%

0.026

Central African

Suspended

 

 

 

Caledonia

CAD 0.07

-46.2%

180.0%

0.033

Mwana Africa

GBP 0.15

-15.9%

480.0%

0.095

Midlands Minerals

CAD 0.21

-25.0%

180.0%

0.011

Africa, other

 

 

 

 

Shanta Gold

GBP 0.08

-9.6%

560.0%

0.014

Banro

CAD 2.61

-22.6%

226.3%

0.263

Moto Goldmines

Just taken over

 

 

 

Sunridge Gold

CAD 0.70

-17.6%

1066.7%

0.041

Luiri Gold

CAD 0.20

-13.0%

700.0%

0.012

Helio Resource

CAD 0.60

-34.1%

300.0%

0.037

Tanzanian Royalty

CAD 3.35

-48.5%

68.3%

0.286

Centamin Egypt

CAD 2.03

-1.9%

372.1%

1.957

Obtala

GBP 0.20

-48.0%

77.3%

0.062

GMA Resources

GBP 0.04

-28.6%

288.9%

0.031

New Dawn

CAD 1.15

-37.8%

2200.0%

0.032

Kasbah Resources

AUD 0.07

-1.4%

180.0%

0.011

African Consolidated

GBP 0.14

-22.5%

205.6%

0.063

KIG Mining

EUR 0.20

-80.8%

1453.8%

0.015

Lake Victoria Mining

USD 1.25

-16.1%

267.6%

0.036

Red Rock

GBP 0.02

-34.4%

320.0%

0.012

Also in Africa

 

 

 

 

MDN

CAD 0.67

-21.2%

59.5%

0.061

Douglas Lake

USD 0.33

-52.2%

175.0%

0.024

Great Basin

CAD 1.75

-26.5%

92.3%

0.554

Gold Wheaton

CAD 0.30

-23.1%

87.5%

0.398

High River

CAD 0.40

-16.7%

900.0%

0.247

Crew Gold

CAD 0.34

-78.8%

3.0%

0.035

Oromin

CAD 1.01

-29.4%

162.3%

0.091

Vatukoula Gold

GBP 0.02

-14.3%

194.1%

0.067

La Mancha Resources

CAD 1.77

-13.2%

4325.0%

0.239

Avocet Mining

GBP 0.82

-10.7%

70.3%

0.261

CGA Mining

AUD 1.95

-9.3%

143.8%

0.486

Chalice Gold

AUD 0.44

-2.2%

528.6%

0.056

NGEx Resources

CAD 0.63

-23.2%

270.6%

0.080

Mainly copper

 

 

 

 

First Quantum

CAD 75.57

-2.9%

492.7%

5.628

African Eagle

GBP 0.05

-60.0%

344.4%

0.024

* 12 month

 

 

 

 

Source: market & company data, compiled by Barry Sergeant

 

 

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