West African Share Discussion Threads

[logans run] 07/1/2014 02:04

West African Minerals strapped for cash


Mining equities were pummelled in 2013 by tumbling commodity prices and falling risk appetite among investors. We don't expect 2014 to be much different for fledgling iron ore explorer West African Minerals (WAFM). Its shares collapsed from 70p to 10p last year following disappointing early-stage exploration drilling at several iron ore prospects in remote parts of Cameroon. Direct shipping ore grades were significantly lower than at nearby projects held by peers.

Now the company is running low on cash. It had just £3.5m at the end of September, down from £13m a year earlier following significant spending on exploration. Non-executive chairman Jim Mellon is "considering the possibility" of tapping the capital markets in early 2014. He wants to raise around $6m (£3.7m) to further explore the Binga project, which is much nearer the coast and available infrastructure than the company's other licences.
Looking ahead, West African Minerals expects to release a maiden mineral resource estimate for Binga this month and then complete geophysical survey work, a preliminary economic assessment, and a feasibility study by the end of 2014. We're sceptical about this ambitious timetable, as each stage can often take years, not months, to complete properly.
As with many small Aim-traded resource companies, up-to-date broker forecasts aren't available.
WEST AFRICAN MINERALS (WAFM)
ORD PRICE: 10p MARKET VALUE: £29.3m
TOUCH: 10-10.3p 12-MONTH HIGH: 70p LOW: 9.3p
DIVIDEND YIELD: nil PE RATIO: na
NET ASSET VALUE: 8p NET CASH: £3.5m
Half-year to 30 Sep Turnover (£m) Pre-tax profit (£m) Earnings per share (p) Dividend per share (p)
2012 nil -1.6 -0.6 nil
2013 nil -6.4 -2.2 nil
% change - - - -
Ex-div:-
Payment:-
IC VIEW:
We exited our high-risk sell tip (58p, 13 Dec 2012) in July when the shares slumped to 10.5p. They haven't moved much since and, while trading near net assets means further downside isn't so likely, it would take materially impressive newsflow to drive a re-rating. Financing could also prove difficult to obtain in the current mining bear market. Hold.
Last IC view: Hold, 10.5p, 31 Jul 2013

[oldvic] 06/1/2014 16:38

2.5 mill shares traded today
spmethings happeninn

[oldvic] 27/12/2013 11:15

bid target ?
questions questions questions

[oldvic] 27/12/2013 11:14

all sells ?
and up a bit ?

[addict] 27/12/2013 11:05

What a clown.

[driller50] 27/12/2013 07:56

placing what price 1p-2p massive loss,s looks like they will struggle raising cash

[kristini2] 26/12/2013 12:07

interims next week, watch the cash position / burn,

[oldvic] 02/12/2013 13:38

hope that was a 400,000 buy !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[angus17] 26/11/2013 13:25

short lived excitment. oh well

[addict] 26/11/2013 13:08

96p share price target.Now you're talking

[oldvic] 26/11/2013 12:46

hope MR 10,000 was a buyer

[addict] 26/11/2013 11:48

Interesting rise I will be thinking

[addict] 26/11/2013 11:47

Interesting rise I think

[oldvic] 26/11/2013 11:44

intersting rise i thought

[29howard] 22/11/2013 08:57

liam wilson/logans run same person.

[logans run] 22/11/2013 08:39

L2 3V1 AND CANNOT GET a buy quote can sell mega

@ZaksTradingCafe VIDEO #WAFM, Legend Mining's managing director Mark Wilson discusses the sale of the

[logans run] 22/11/2013 06:58

@ZaksTradingCafe FT West African Minerals 96P price target

[liam wilson] 21/11/2013 13:52

est African Minerals shares spike following Legend sale
By Ian Lyall November 21 2013, 1:38pm At 1.40pm, West African shares were changing hands for 12.74p for a rise of 4%.At 1.40pm, West African shares were changing hands for 12.74p for a rise of 4%.
Shares in West African Minerals (LON:WAFM) were higher in afternoon trade amid tentative and early signs of international interest in the Cameroon iron ore sector.
It followed the sale by Aussie firm Legend Mining of its Ngovayang asset to Indian giant Jindal.
As boutique natural resources house share price Angel points out: "The deal gives a good market for potential value for [West African's] Binga iron ore prospect as well as the projects in North and South Djadom to the East of Cameroon."
At 1.40pm, West African shares were changing hands for 12.74p for a rise of 4%.
Overnight Legend said it would receive A$12-million for Ngovayang on completion and a further A$5.5-million within ten businessdays of the execution of a mining convention between Jindal and the government of Cameroon.
"We believe the transaction is a good result for Legend's shareholders. The absence of direct shipping ore at the project, coupled with the current state of global financial markets, has put the further development of the project beyond the reach of an exploration company like Legend," said managing director Mark Wilson.

[liam wilson] 21/11/2013 12:07

email contact good news on the way buy on dips added 42k@13p today

[liam wilson] 21/11/2013 09:46

@ZaksTradingCafe #WAFM, Legend Mining sells Cameroon iron project to India's Jindal Steel

[gheebee] 21/11/2013 07:27

Rumours of a sale were true then:

see legendmining.com.au/wp/wp-content/sharelink/20131120-to-sell-cameroon-iron-ore-project-for-a175-million-75888511378898511.pdf

[liam wilson] 20/11/2013 21:39

@ZaksTradingCafe West African Minerals China best bet to unlock West African iron ore - Investec - #WAFM

[liam wilson] 20/11/2013 15:45

@ZaksTradingCafe China switches track in hunt for West African iron ore WAFM

[liam wilson] 20/11/2013 13:35

London's iron ore firms can look to improving prices
By Jamie Ashcroft November 13 2013, 10:55am Traditionally the third quarter of the year is the weakest for the bulk commodity.Traditionally the third quarter of the year is the weakest for the bulk commodity.
Iron ore's recent price strength has caught a lot of people out.
Traditionally the third quarter of the year is the weakest for the bulk commodity.
Allied to a huge ramp-up of their operations at Pilbara in Western Australia by Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT), there were gloomy predictions of a slump in prices ahead of a wave of new production.
In fact, the iron ore price has been very resilient and rose to a two-month high of US$137 per tonne this week on a surge on imports into China, which dominates the market.
Bears had been predicting lows of US$90 per tonne, but the mood has changed and many commentators now believe that demand will exceed supply for longer than previously forecast even with the new supply from Australia.
It should mean that London's small cap iron ore firms can look forward to a welcome improvement in sentiment after what has been a very tough year.
As the iron price retreated the smaller miners bore the brunt, but those downtrodden juniors that have struggled through now look the most leveraged to any recovery in the market.
Share prices have started to tick higher and investors have begun to look forward with more enthusiasm.
Sierra Leone producers London Mining (LON:LOND) and African Minerals (LON:AMI) have risen by 45% and 4% respectively since the end of July.
Explorers Zanaga (LON:ZIOC) and West African Minerals (LON;WAFM) are 69% and 19% higher, while even the giants Rio and BHP have added a respective 10% and 4%.
Investec mining analyst Hunter Hillcoat said some caution is required as the spot iron ore market is in its infancy and trends, such as a weak third quarter, are hard to predict.
"I think you've got to be careful as the spot iron price market is very immature. We've only got about three years of history," he told Proactive Investors.
"But, if you look at price charts you can see this [third quarter] as a weak period.
"What is encouraging now is that the price is staying up, irrespective of whatever trading is going on, on the side. China's imports remain robust and steel production numbers remain strong."
Hillcoat adds that next year will bring further potential obstacles, not least coming from the substantial increase in Australian mine output.
"We don't really know how that's going to translate into pricing next year - which is where consensus has the view that we'll see this wall of supply come onstream and suppress the price.
"We are a bit more circumspect, however, because we think that if there is a wall of supply coming into the market, and it does occur as planned, it is going to displace the high cost Chinese production rather than force a substantial reduction in the spot price.
"So, we're only assuming a price $10 per tonne below where it is now."
The analyst says the steadying of the iron ore price is timely for London's miners, especially the smaller firms that have toiled to secure financing to take key projects forward.
Commercial or 'off-take' partners, the most likely source of project financing, are still interested in doing deals and given the possibility of a significant spot-price rally may be increasingly amenable to taking direct equity positions as well as simply committing to purchase product.
"The strategic partners that they [miners] are typically looking for are either private equity investors or customers.
"Customers will take their own view on what they are going to need and what they think prices are going to be, and they look to make a strategic investment to secure supply.
"But, certainly the fact that prices are remaining strong might make them think about locking in a partnership, whereby they can share in some of the iron ore pricing benefits rather than just being a take-off.
"What I mean by that is, while a strategic partner usually comes in and takes a percentage of a project, and gets security of supply, they may instead come in at an equity level so they can also benefit from a higher iron ore price - should they remain stronger - rather than simply being the price taker."
And, although no deals have followed the IMIC (LON;IMC) buyout of Afferro (LON:AFF), which began earlier this year, Hillcoat believes the consolidation of small cap iron ore firms, particularly those in West Africa, is still a real possibility.
"I've been of the view that there needs to be significant consolidation of the West African space, which is where the London listed miners tend to dominate.
"Apart from Afferro there hasn't really been a lot happening, but, we've got to bear in mind that the Chinese have a much longer time frame than Western markets, in terms of getting deals done.
"We [in the West] think it has been dormant because nothing's really happened six months after Afferro, when in fact on a ten-year time frame they still see a lot of consolidation to come.
"So, yes we may see more, but, we have to accept that it is going to take longer than we'd like."