||EPS - Basic
||Market Cap (m)
|broncowarrior: Good stuff. Name change not until Octover though so you can still buy AME for a little while yet.
Agreed that this was the deal made originally and it was made when the share price was 1.8p a share so I'm fine with it. I hope he makes himself much richer because it means we'll benefit too.|
|inbrackets: The announcement of a change in name was hardly likely to set a rocket under the share price in itself but it starts to set dates methinks. You don't invest in a company / park up existing assets / sit around for 2 months thinking up a serendipidous sounding name and then decide what to do. This strikes of implementation so i would expect further news in the near future and we can then see what we are shareholders in and decide on its merits from there. Suspect that it will be better to have them now in readiness.|
|broncowarrior: Right, just checked the ALO RNS and the heads of terms agreement would involve CEY buying just over 15mm shares for 250k. However, they aren't showing up on the share register so that hasn't happened yet.
If it does happen, that should move the share price of ALO towards that 1.6p per share price fairly quickly.
Perhaps the AME portfolio acquisition will convinve them to sign binding heads of terms, although it was designed more for ALO's Ethiopian assets.|
|broncowarrior: They won't touch Karan at the moment IMO, they don't have the cash. The hope would be that down the line either 1) Alecto gets taken out for a substantial premium to today's price or 2) the share price of ALO rises to a level where AME's price rises to the point where a placing to fund exploration would not be overly damaging.
They have sold their drilling rig so they just aren't going to touch Karan. My understanding was the gold was not particuarly close to the surface so would be more costly that the Gourbassi strike has been.|
|broncowarrior: This was an acknowledgement that AME probably doesn't have the cash to develop the asset itself. So they move those assets to a better funded company and take a substantial shareholding in that other company. When Alecto's share price rises, the value of AME's shareholdiing in that business will also increase, increasing the value of AME's share price. If that gets high enough they can then borrow against the increased value of issue more shares to fund their own exploration.
This seems very sensible to me.
Need to do my research on Alecto though...|
|broncowarrior: We need a broker note, we have no one following this one.
We now have an asset so the broker should be able to put a rough number against this.
I see they aren't going to be able to continue the exploration until toward the end of this year because of rainy season. Shame as we are just getting some momentum (with company activity if not the share price!)|
|broncowarrior: Just to add, I think the share price will spike on the JORC but I'm not sure it will get to warrant strike price as it would be a 500% lift from here. If it gets to 8p, then the warrants could be moved down to that level to raise necessary funds, without horrific dilution.|
|idontpost: to put all this in context. market capitalisation is £3.5mill, cash is £2.7mill, so enterprise value is £0.8mill.
no placing risk due to financing worrries. enormously prospective licences.
value per share determined for acquisition of Caracal per early July rns of 36p compared to ame share price now of 4.25p.
and so on.
will be 25p no doubt to my mind, very soon|
|idontpost: We are definitely entering a phase in thegold stock cycle that will see quite dramatic moves in share prices. Market Makers are flat booked for the most part so small amounts of buying will move prices considerably.
The key is to find stocks that have plenty of asset underpinning. Cash is probably the best form of underpin. AME have plenty.
The fact they own their own drill rig means they can operate flexibly and drill as and when they require. Makes them very lean cost wise and very efficient, which is partly why the cash burn is so low.
It is going to take something to get the share price moving, but it wont necesarily be major news. I say that because in early July they released a high impact RNS ref the Caracal acquisition and the share price didnt move.
So here I think it is just about the stock demand issue for now. We could all be very pleasantly surprised in a few weeks if the recent interest continues, assuming nothing out of left field of course.|
|richandjanet: Tipped in IC next week
■ Large acreage in good mining region
■ Strong evidence of gold
■ Funded for imminent drilling
■ Close to infrastructure
■ 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.|
African Min&Ex share price data is direct from the London Stock Exchange