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With transactions like Full List newcomer Gem Diamonds’ £42 million purchase of AIM-quoted BDI Mining, the market is stirring with talk of the long-awaited consolidation.

Phil Edmonds’ Central African Mining & Exploration Company (CAMEC) recently entered into a contest with newly reconstituted Canadian uranium concern Denison Mines – controlled by the powerful Lundin family – for Aussie-listed Omega Corp, which has uranium interests in southern Africa. At 55.25p, CAMEC is well down on a year ago and must be seen as speculative in the short term despite potentially lucrative copper, cobalt and uranium prospects throughout Africa.

Aggressive player RAB Capital and Millennium Partners are among backers putting £12.5 million into Continental Capital SPC. This is a new Cayman Islands-based fund advised by Fox-Davies Investment Management. It backs small to medium-sized resource companies ‘with quality exploration and development opportunities’.

Queensland cheer for Caledon

Caledon Resources has thrived since Growth Company Investor’s mention in November by converting from a Chinese joint venture into an Australian coking coal developer. Chief executive George Salamis says the company’s Minyango project in Queensland, which has 240 million tonnes, will increase production in September to 100,000 tonnes a year with costs to the port of US$55 (£27.5) a tonne against a selling price of between US$85 and US$90 (£42.5 to £45).

He argues that the nearby Cook mine could significantly increase its current resource of 126.5 million tonnes. Caledon is arranging a debt package to meet its capital spending needs and followers suspect that potential bidders could be sizing up the company and its prospects. At 40.5p, the shares could have further to go.

Old stagers were intrigued to see Alan Bond, the once-imprisoned English-born Australian tycoon, make his long-awaited move towards the London market by selling 4.8 per cent of his latest vehicle – southern Africa-focused Lesotho Diamonds – to lacklustre AIM performer River Diamonds for £2.2 million in cash. Colin Orr-Ewing, the indefatigable boss of River, says the attraction is the company’s stake in Lesotho’s Kao diamond project. This has a claimed 10.2 million carats.

Jollity in gems?

River Diamonds’ original gem prospects in Brazil are making slow progress, though the company’s operations in Sierra Leone are seen as more promising. Orr-Ewing insists that an indirect holding in Kao offers more promise than either.

He is tight lipped about the suggestions that the 4.8 per cent Lesotho purchase is the prelude to a full-scale reverse bid as Bond’s route to market. It would cost an estimated £100 million to take Kao to production if such a move is proved justifiable.

That would need one or more larger players to become involved and it is suggested that several have been sniffing despite Bond’s sometimes parlous commercial record. All of this leaves River as an out-and-out speculation at a lowly 1.35p but one that might pay off.

Another Aussie entrepreneur flying the flag for diamonds is Paul Loudon, the former boss of BDI who is now steering AIM and PLUS-quoted Diamondcorp. The company aims to use cash from extracting an estimated 370,000 carats from old tailings at South Africa’s Lace mine to fund a feasibility study on reopening this once-quoted former De Beers mine. Diamondcorp reckons Lace could hold up to 14.1 million carats, worth around £125 a carat with commercial ore grades and exploration possibilities on the property.

The company’s shareholders include the US Millennium Fund, JPMorgan and the private Eastern European Aktive Group. It also boasts black economic empowerment partners committed to contributing hard cash and is chaired by ex-City mining guru Euan Worthington. Diamondcorp will need more funds at some point but if Lace lives up to expectations, the market would be happy to oblige.