African Aura Mining

HOLD

20/07/2010 Robert Tyerman

Iron ore play African Aura Mining says airborne surveying has defined a major new target at Nkout in southern Cameroon.

The West Africa-focused company, formerly Mano River, reports the survey data reveals features consistent 'for a prospective banded iron formation' in a 'major geophysical anomaly covering at least eight km'.

Previous grab sampling at Nkout has returned average iron grades of 55%, with pockets up to 68%. AIM-quoted African Aura has hitherto won stockmarket attention for its 38.5%-owned Putu iron ore prospect and its New LIberty gold deposit, both in Liberia, and president and chief executive officer Luis da Silva says Nkout was not valued in the company's portfolio 'until today'.

He says African Aura now plans a 10-hole, 4,200-metre drilling programme to establish a maiden iron resource estimate for Nkout this year. First highlighted by Growth Company Investor two years ago as Mano River at 10p and more recently at 69.75p and 96p, the shares have suffered from profit-taking, though they are now firm at 83p.

Investors who are happy with the commodity and country risks should hold on.

Tags: AIM, Commodities, Emerging markets

Sector: Mining

Companies: Afferro Mining

Market cap: £58.3m

PE Forecast: n/a

Share price: 83p