25 May 2012

Berkeley Minerals clinches option deal

20/12/2011 Robert Tyerman

A new option agreement allows Berkeley Mineral Resources (BMR) to conduct due diligence on three potentially substantial Zambian copper tailings.

The AIM-quoted company, headed by entrepreneurial sector veteran Masoud Alikhani, has the exclusive right to probe the stockpiles in the Chingola area of the central African state, which the previous operator Zambia Consolidated Copper Mines once unofficially estimated to hold 1.4 million tonnes of copper.

Berkeley, which must pay a $275,000 (£170,000) option fee, can then buy 80 per cent of the stockpile areas, at a cost of $6 million (£3.8 million) cash and 257 million shares, valued at 6p each - more than twice today's market price. Another condition of buying an 80 per cent stake is that the company will have to fund the building of a $25 milliion beneficiation plant.

Alikhani sees 'substantial long-term profits and cash flow' coming from the Chingola deal, after the costs to Berkeley. Growth Company Investor recommended Berkeley shares last year after they had fallen from 2000's 6.5p float price to 1.88p, before suggesting partial profit taking at 5.83p in May.

They now trade at 2.58p, valuing the company at £26 million, where they offer speculative recovery potential for risk-friendly punters.

Tags: AIM market, Copper tailings, Masoud Alikhani, Zambia Consolidated Copper Mines

Sector: Mining

Companies: Berkeley Mineral Resources

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