Exploration Insights by Robert Tyerman

Gold’s move into the high $900-an-ounce range has rekindled interest in a variety of gold concerns.

These include Centamin Egypt, at 53p, 60 per cent up from Growth Company Investor’s October recommendation and a rumoured bid target as it prepares to start producing from its 12.9 million oz Sukari project.

And Cluff Gold is up from an autumn 10.5p to 55.25p on more imminent West African production, though still well below last year’s highs and now seeking $10 million to increase output and accelerate drilling.

The market remains reluctant to heed Conroy Diamonds & Gold’s ‘conceptual’ in-house estimate of 15 to 20 million oz of gold potential in its Irish licences, with the shares at a lowly 2.88p, and a weak diamond market has brought suffering to the likes of Petra, down at 26.25p despite its determinedly expansionist noises (see p19). Elsewhere, however, there are signs of light.

   
Kalahari in play

Potential suitors circling uranium play Kalahari Minerals have taken its shares from 15p when Growth Company Investor first highlighted them in 2006 and again at 26.25p early last year to 79p now.

Beleaguered mining giant Rio Tinto has upped its holding to nearly 16 per cent, fellow AIM counter Niger Uranium has a similar stake and Emerging Metals, AIM-quoted and British Virgin Islands-based vehicle for Stephen Dattels, who lucratively sold another uranium play UraMin to French nuclear giant Areva two years ago, has 8.8 per cent.

The prize at Kalahari is its interest in the Rossing South deposit in Namibia’s Husab uranium project, with an initial resource estimate of 108 million lbs of U3O8 at 430 parts per million, while another Husab deposit at Ida Dome holds more than 25 million lbs of U3O8. Kalahari holds its interest through a 40.6 per cent stake in Australia-listed Extract Resources, Husab’s owner.

Rio, whose own long-standing Rossing uranium mine is next door, also has more than 14 per cent of Extract. A mooted merger between Extract and Kalahari foundered on fears Rio might achieve de facto control but with no obligation to bid under Australian rules.

Mark Hohnen, Kalahari’s chairman, has said his board will seek ‘to ensure that Kalahari maintains its independence at this critical juncture’. But there is a price for everything – if Rio or someone else is willing to pay.

Kalahari is worth holding. Niger at 16p, with another project, Henkries and a recently emerged 34 per cent holder in Toronto-quoted NWT Uranium, and Emerging Metals at a lowly 6.12p, might repay strong-nerved flutters.

Aurum’s cash return

Gold group Aurum Mining plans to repay £16 million to shareholders after a legal victory over its key Kyrgyzstan asset, the 1.1 million oz Andash gold and copper project. The Mayfair-based company, which boasts entrepreneurial Haresh Kanabar as a director, plans to make a capital repayment of 33p a share in April, subject to approval by shareholders and the High Court.

AIM-quoted Aurum, which boasts cash balances of £18 million, hints it might make a second capital repayment once it has disposed of certain ‘assets and trade receivables’.

A Kyrgyz civil court recently threw out a challenge to the company’s ownership of Andash. Assuming no successful appeal, Aurum has agreed a memorandum of understanding with the Kyrgyz government under which state and local authorities will give ‘full support and assistance’ in return for 20 per cent of Andash.

Shares in Aurum plunged from 134.5p in early 2007 to 16.5p last October following the Andash legal challenge. Now 34p, they have speculative appeal.