Gulf starts at Sheikh Adi-2 25/05/2012
Iraq-focused oil explorer Gulf Keystone Petroleum (GKP) has begun drilling at the Sheikh Adi-2 well in the Sheikh Adi block.
Noventa moots £10m funding
Tantalum miner Noventa is contemplating raising up to £10 million to expand its operations in Mozambique. The Jersey-based company, steered by engineer and company doctor Eric Kohn, targets production at an annual rate of 600,000 lbs in the near future, with break-even in sight.
Among its financing options, AIM-quoted Noventa, which lost £6 million last year, has been offered £11m of loan finance but is also considering tapping the market with the issue of five-year 10 per cent redeemable preference stock convertible into shares at a 25 per cent premium to their market price. The company, which has offtake agreements for a major portion of its projected output, suggests £19 million of capital expenditure, partly loan financed, could achieve payback by 2013 and leave it with nearly
£14 million in the bank.
Noventa has three mines in Mozambique’s Zambezi province – Marropino, Morrua and Mutala – and is now producing at the rate of 50,000 lbs a year from tailings left over from past mining operations. Kohn stresses the benign mining policy of the Mozambique government.
He envisages cash costs of $37 a lb, against a market price for tantalum which has risen from a $32-per-lb low to more than $130 today and is likely, he suggests, to settle down to a long-term $70 a lb. Tantalum, used in capacitors for mobile phones and a wide range of other applications, enjoyed a boom during the dotcom bubble before collapsing, but has recently been recovering strongly in anticipation of a developing world shortage.
Noventa shares have had a similar experience since floating four years ago at 175p. They have rallied over the past year from 4.75p to 12.75p, valuing the company at £65 million, and could go further if Kohn’s plans bear fruit.
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