Robert Tyerman’s Exploration Insights
Article Date: Nov 06 2006Today’s tighter new issues market has not prevented seasoned Aussie entrepreneur David Steinepreis from floating exploration and resource acquisition concern Davos Resources on AIM after raising £715,000. Davos, which wants to develop gold, copper and uranium prospects in the Pine Creek tenement in Australia’s Northern Territory, raised its pre-float money in several stages at different prices and at 6.25p now, has gone to a premium over the 5p at which the latest tranche was sold.
Steinepreis, head of Ascent Capital and chairman of AIM Resources, is executive chairman of Davos. He says it has already identified six prospective exploration targets. The company’s 314 km licence area at Pine Creek is close to some of the richest gold-producing areas in Australian history.
Davos also intends to investigate copper and uranium potential at Pine Creek. Michael de Villiers, finance director of Mercator Gold, and Scott Spencer, ex-director of Hardman Resources, are directors and substantial shareholders of Davos, whose backers also include Ocean Equities and Glen Whiddon, boss of another AIM counter, Grove Energy.
Davos is likely to contemplate fresh acquisitions in due course. It has speculative appeal while sector support lasts.
Another energy hopeful eyes AIM
Gavin Burnell of investment group Ruegg hopes to float oil and gas newcomer Iceni after a £600,000 private funding. Iceni is to be headed by sector stalwarts John Clure and Ian Anderson. The 28-year-old Burnell hopes it will achieve an AIM tag of between £5 million and £10 million.
He is already in the process of bringing Fairholt Resource Investments to the PLUS market with a £500,000 issue at 1p. Backed by small company investor Bruce Rowan and chaired by 30-year-old Summit Resources director Toby Howell, Fairholt intends to scout for natural resource investments and looks an outright gamble which might come off at some point.
Firestone wins Botswana licence
Gem group Firestone Diamonds has been awarded prospecting licences over the 5,000 sq km Tsabong kimberlite field in Botswana. Philip Kenny, managing director of AIM-quoted Firestone, says the company has had its eye on Tsabong, one of the world’s largest diamond-bearing fields, since before raising £10 million at 130p a year ago, and claims to have beaten mighty De Beers in the application race.
Tsabong contains large kimberlites, including the 180-hectare MI kimberlite and Kenny argues its geology makes for relatively cheap exploitation, where there are diamonds. He suggests it needs to generate annual revenues of only $10 (£5.35p) a tonne to be viable – ‘a tenth of what they need in the northwest of Canada’.
‘Firestone won’t need a penny for this,’ adds Kenny. He points to the remaining placing proceeds, the company’s holding in fellow AIM counter African Diamonds and £1 million expected annual cashflow from a venture with De Beers on South Africa’s Buffels River.
Firestone has joint ventures with De Beers elsewhere in Botswana, at Mopipi, Orapa and Jwaneng. Another joint venture, on the Groen River in Namaqualand, has so far been a disappointment, though bulk sampling continues.
Firestone, which is also exploring the Laurentia craton on the US/Canadian border, has been a volatile performer. At 114.5p, the shares are only 0.5p above their AIM flotation price eight years ago, after touching 37p and 192p on the way.
The story has a habit of changing, which may deter investors. But, if Kenny’s hopes for Tsabong are borne out, suppport could return
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