Exploration Insights by Robert Tyerman

While market attention has focused on increased uranium resource targets for Kalahari Minerals, lately off the boil at 179.75p, less favoured AIM counter Vane Minerals could be producing from its Wate uranium project in Arizona by early 2011 after encouraging drilling results.

So says Matthew Idiens, commercial development director of the London-based company, which has reported drilling intercepts at the Wate breccia pipe. Vane, which still derives cash from its original gold and silver operation at Diablito in Mexico, says it hopes to have an industry-standard uranium resource estimate ready by the end of 2009.

The company, which is a 50-50 partner at Wate with Canada’s Uranium One, still has 160 targets to explore and says its data so far confirms that compiled years ago by a previous developer, Rocky Mountain Energy.

Floated three years ago at 11p as a gold and silver play, Vane shares hit 32.5p in 2007 but later slumped to 2.25p. Now 5p, they should recover further if current studies and the permitting process bear out latest indications.

Chariot on expansion trail                          
Chariot Oil & Gas is looking to North Africa for early production after slashing interim losses 86 per cent to £940,000. More than £10 million received from Brazilian oil corporation Petrobras for half of Chariot’s Block 2714A off the coast of Namibia helped the company cut losses.

Paul Welch, the ex-Shell, Hunt Oil and Pioneer Natural Resources luminary who has steered Chariot since October, says seismic data on the company’s central block offshore Namibia should significantly increase its potential resources from a currently estimated 5.24 billion barrels.

He suggests that other major oil groups could farm in to other parts of Chariot’s Namibian programme. Meanwhile, he wants the company to acquire assets near to production and close to infrastructure, to generate output of 2,000 to 5,000 barrels a day.

He sees possible candidates in North Africa. Chariot, worth a flutter at a depressed 25.5p, could use cash from its £15 million pile or swap assets to obtain the production it seeks.                 

Production hopes at Avocet
Avocet Mining targets doubling gold production to a 200,000-oz annual rate next year after losing an interim $4.5m (£2.7m).

The London-based company, which bought Oslo-quoted Wega Mining in a £52.5 million share deal last April and plans to list its own shares additionally in Oslo, increased gold production by 500 oz to 56,300 oz in the six months to September, chiefly from Penjom in Malaysia and North Lanut in Indonesia, though with a contribution from Wega’s Inata project in the West African state of Burkina Faso.

 Chief executive officer Jonathan Henry says low-grade Inata has a seven-year mine life, but has ‘big exploration upside’. Analysts expect Avocet, which made £21 million pre-tax in the year to March, to make a reduced £12.3 million this time, rising to £32.5 million in 2010-11.

Having fallen from 234p in 2006 to 50p, the shares, highlighted by Growth Company Investor at 73.75p in April, have rallied to 100.25p and offer the possibility of further recovery.

Serabi revival plans
Ex-hedge fund manager David Kingsman is backing bombed-out Brazil gold play Serabi Mining’s £2.4 million refinancing.

His vehicle, Greenwood Investments, has taken more than half of AIM-quoted Serabi’s £2.1 million placing at 1.5p and has provided a further £300,000 facility in convertible loan stock for a 29.3 per cent stake in the company, now seeking to establish substantial reserves around its Palito mine in Brazil’s Jardim do Ouro (Garden of Gold) region.

Serabi shares, floated in 2005 at 30p, collapsed to 0.43p after it suspended underground mining.