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AIM listed gold and diamond mining company African Consolidated (LSE:AFCR) has had a tortuous history. It has perennially been a little short of the readies but its big problem has been that almost all of its operation and assets lie in the socialist paradise that is Zimbabwe. And that has resulted either in restrictions on it exploiting them efficiently or in outright seizure. But on of my sources from Zim has drawn my attention to some rather curious developments which are a game changer and at 6.75p this is worth a flutter – the market capitalisation is £55.82 million.
In its presentations Af Con talks largely about its gold assets which look interesting. But what interests me is the Marange diamond operations which were, in 2010, seized by Africa’s Hitler in order to line his own pocket. However folks have wised up to how much cash Mugabe and his pals have plundered from what are effectively blood diamonds and that causes this great socialist a few problems.
Step forward VP Joice Mujuru who has been toadying up to folks in the UAE for more than a year seeking inward investment into her dark land. And step forward Brimfell Investment Holdings. First it bought in the market and then it took up in its entirety a recent £7 million placing at 4.25p It now owns just under 30% of Af Cons.
At the same time Andy Cranswick stepped down as CEO. He is a good and honourable man. So who is Brimfell? AfCons makes it clear on its website:
“Brimfell Investment Holdings Limited (“Brimfell”). Brimfell is wholly owned by RAK Resources, which in turn is wholly owned by the Investment and Development Office of the Government of Ras Al Khaimah “
That would be one of the United Arab Emirates. So VP Joice’s new pals now own 30% of Af Cons. Mugabe has had problems making money from exporting blood diamonds from Marange which belong to AfCons anyway. Do you think that Africa’s Hitler will
a) Piss off his new mates in the Arab kleptocracy by not handing back Marange
b) Keep hold of an asset that he is having real problems monetizing anyway.
Marange is vast. If a deal has been cut African Consolidated shares will steam ahead. I admit this is an utterly speculative buy based on putting 2 & 2 together to make 4 but I regard it as a small flutter worth taking.
Tom Winnifrith writes for 10 UK and US websites. Links to all his free to access content can be found on his own website at www.TomWinnifrith.com
You can also get alerts on all of his articles by following him on twitter @tomwinnifrith
