Companies: CAPE    DWY    GLA    UMN   

With the oil outlook uncertain and copper stocks reaching high levels, even those such as powerful RAB Capital boss Philip Richards, who see recent wavering as a temporary setback, suggest that the setback could last a little longer.

New issue sentiment has not been helped by the drama at entrepreneurial Masoud Alikhani’s AIM venture Cape Diamonds, most of whose board has quit after revelations of pre-float profit-taking and lavish personal share float commissions. But that has not deterred former De Beers luminary Clifford Elphick from preparing a £127 million London Stock Exchange float for Gem Diamonds, whose yield of large stones from its Letseng mine in Lesotho, southern Africa, recently included one of 603 carats.

At the other end of the scale, speculative PLUS-traded Canadian minnow Fundy Minerals, with gold prospects in New Brunswick and an alluvial diamond project in Liberia, is seeking £1 million with a move to AIM – though the shares have halved to 4.5p since 2005’s PLUS (then Ofex) float.

The company also has a proprietary extraction technology, Minex, which boasts partnering deals in Poland and South Africa. Fundy boss Jeff Michel intends to spin off the Minex arm onto PLUS with a £500,000 issue that, along with Fundy itself, might appeal to stronger-nerved, risk-friendly punters.

UraMin glows
Uranium is in a category of its own, as prospects for the rehabilitation of nuclear power continue to brighten. One beneficiary of this is UraMin Inc, chaired by former Ashanti Goldfields boss Sir Sam Jonah. The AIM-quoted company has revealed impressive high-grade drilling results at Bakouma in the Central African Republic and won 14 prospecting licences in South Africa’s Ryst Kuil channel.

Growth Company Investor was enthusiastic ahead of UraMin’s float at 68.5p last April, since when the shares, after an uncertain start, have risen to 181.5p, valuing the company at £387 million, which should cheer 11.6 per cent holder and fellow AIM counter Galahad Gold (itself with some speculative recovery appeal at 10.63p after selling half its 20 per cent stake in Canada’s Northern Dynasty Minerals for £41 million). More cautious punters might consider partial profit-taking, but there should be more mileage yet.

Dwyka goes for nickel
AIM-quoted Dwyka Diamonds is seeking to tap the City for £2.5 million at 12.5p to support a potentially lucrative nickel project at Muremera in Burundi, central Africa. Previously battle-scarred Dwyka, an Australian company floated in 2001 by Evolution as an ill-starred diamond tailings play in South Africa, is still developing gem prospects in the Republic, where its well-connected Australian chairman Melissa Sturgess says there is an eventual annual production target of 100,000 carats.

But the focus has now shifted to the formerly strife-torn state of Burundi, where Sturgess argues one legacy of the recent bloody civil war is, as yet, a relatively clear field for companies bold enough to snap up potentially attractive projects. Dwyka has
paid the equivalent of £2.5 million in shares for 100 per cent of Muremera, where the United Nations Development Programme recently identified ‘five big anomalies’, potentially bearing nickel.

Muremera is only 2km over the border from Kabanga in Tanzania, claimed as the world’s largest undeveloped nickel sulphide deposit, with an estimated 26 million tonnes of ore at 2.6 per cent nickel, with some copper and cobalt too. Swiss-based mining giant Xstrata is spending £70 million to earn a half-share in Kabanga, and Dwyka, which also has a gem exploration joint venture in India with mining giant BHP Billiton, hopes Muremera is part of the same ore body.

Dwyka’s shares have never recovered from its early problems in South Africa and still languish at 16.5p, down from their 40p float price six years ago. If Muremera lives up to expectations, they could be promising recovery candidates.