View Full Version : FINALLY KENYA WILL BE A MINING NATION (GOLD AND TITANIUM)
September 21st, 2009, 03:19 PM
UK firm puts a shine on Kenya’s gold export dream
http://www.businessdailyafrica.com/image/view/-/661042/highRes/102539/-/maxw/600/-/bgqw4t/-/Gold.jpg Gold jewellery. Kenya has enough gold deposits to support commercial mining. /Reuters
Posted Monday, September 21 2009 at 00:00
Kenya has enough gold deposits to support commercial mining, a UK firm that has been exploring Western Kenya says, adding glitter to the country’s long held ambition of joining the rest of sub-Saharan Africa in the minerals exports business.
Goldplat, the UK firm that led a consortium of foreign companies in the Western Kenya project says it will roll out a mining plan as soon as it gets a mining licence from Kenyan authorities.
The announcement made through the mining portal, Mining Weekly, did not disclose the size of the find nor the location but the Department of Mines and Geology estimates that the Western Kenya belt that borders Tanzania (dubbed Migori belt) could produce up to 34 tonnes of gold per annum.
“GMR (Gold Mineral Resources Ltd) is not permitted to make commercial gold sales from the project until its exploration licence is converted to a mining licence. An application has been submitted to the authorities and an outcome is expected soon,” Goldplat says in the current edition of Mining Weekly.
Award of a mining licence to Goldplat, listed at the London Stock Exchange (LSE) through its subsidiary GMR should elevate gold trading to the mainstream economy pushing Kenya into the business of commercial gold harvesting.
Western Kenya produces an estimated 2,000 kg of gold per annum, which is mainly handled by small scale traders who sell their metal to middlemen and a huge fraction of it is not captured by the national data since.
The coming on board of a major mining company offers the country an opportunity to boost its foreign exchange earnings from the commodity, rev up employment in the mining sector and diversify Western Kenya’s economy that currently relies on the underperfoming tobacco and sugar farming.
The project is particularly expected to stir up activity around Migori and Trans Mara districts that are among the poorest regions in the country. Official data shows that Kenya earned Sh592 million from trading 0.3 tonnes of gold last year, but with the capacity of 34 tonnes in Migori alone, the country earn close to Sh67 billion from trading gold.
“That level of output could make gold one of the country’s top forex earners and make Kenya a middle-level gold producer, with the Migori belt alone having the capacity to produce 1.2 million ounces,” says an investor brief from Canadian mining company Kansai Mining Corporation, which also has interests in Kenya.
Goldplat Plc is listed in the alternative investment segment of the London Stock Exchange (LSE) and has mining projects in South Africa and Ghana. It produces precious metals like gold, silver, and platinum in the continent.
In Kenya, Goldplat’s stakes are at Lolgorien, where it owns a 50 per cent stake in a joint venture with Oslo and Swedish-NGM listed International Gold Exploration AB. The joint venture company is registered in Kenya as Kilimapesa Gold.
The Kenyan-registered company has a license to explore the gold potential of the 213 sq km Migori gold belt and is seeking to expand into Tanzania and Uganda.
Kilimapesa Gold’s Lolgorien gold project is situated in South Western Kenya within the Migori Achaean Greenstone Belt.
“We are close to completing the acquisition of the remaining 50 per cent of Kilimapesa Gold, which will see Goldplat wholly own the project,” said Goldplat CEO Demetri Manolis.
He noted that Goldplat had refurbished the Kilimapesa Hill gold-mining project’s plant at a cost of £120,000 this year. This had included the installation of a new mill motor, a crushing unit and an additional gravity circuit and thickener, as well as the replacement of the electrical recirculation circuit and the refurbishment of the assay laboratory, he added in a statement to shareholders.
The firm also claims that it has forged “excellent relationships” with the local community and local artisan miners. The firm also continues to develop other four exploration targets at Kilimapesa namely Olepoipoi, Meghor, Teng Teng and Red Ray, as well as investigating other known high-grade areas with surface mining potential in order to increase the life of mine.
Chairman Brian Moritz commented: “Our objective of becoming a mid-tier miner is under way with Kilimapesa Gold moving towards profitable production and other projects under review. The current favourable gold price environment is enhancing our value and we are in a strong position for growth.”
Gold prices have defied the slowing global economy to traded at slightly above the $1,000 an ounce mark in recent months as investors look at a the commodity as a classic hedge against inflation, falling current and asset classes such as equities.
September 21st, 2009, 03:24 PM
Chinese firm takes control of Kwale titanium mines
http://www.businessdailyafrica.com/image/view/-/651546/highRes/98796/-/maxw/600/-/10wvvko/-/tiomin+pix.jpg Tiomin Headquarters in Mombasa: The firm estimates that titanium deposits should generate more than Sh3 billion in operating cash annually in the first six years of operation. Photo/FILE
Posted Wednesday, September 2 2009 at 00:00
State-owned Chinese mining conglomerate Jinchuan has acquired a controlling stake in Tiomin Kenya Limited, renewing hope that the Kwale titanium mining project that has been in limbo for more than 10 years will finally start.
Tiomin Resources Inc., the Canadian firm that fully owns Tiomin Kenya Limited, says it has sold a controlling stake in its Kenya subsidiary to the Chinese firm under an investment agreement signed on Monday.
The deal offers Jinchuan a 70 per cent stake in Tiomin Kenya Limited, leaving the Canadian parent with 30 per cent.
Jinchuan is expected to immediately invest $25 million into the mining project to offer it the financial muscle it needs to take-off.
Tiomin Kenya has full rights over titanium deposits in Kwale District but a combination of financial difficulties, boardroom wrangles in the parent company and controversy over relocation of displaced landowners has rendered it unable to exploit the minerals.
The new shareholding arrangement comes a year after Tiomin and Jinchuan signed a Memorandum of Understanding in July last year, paving the way for Jinchuan to invest about Sh2 billion in Tiomin Kenya.
“Tiomin Resources Inc. is pleased to announce that it has taken a significant step forward and signed an Investment Agreement with Jinchuan Group Limited,” a statement from the Canadian firm said.
This latest investment agreement bears the same terms as last year’s and requires Jinchuan to finance, develop and operate Kwale Mineral Sands Project.
“Closing this flagship deal, which has had such a long and painful gestation period, is a key event for Tiomin,” said Robert Jackson, the President and CEO of Tiomin Inc.
The deal must however be approved by the Government to be concluded since the initial five years that Tiomin had to start work on the project have expired.
Titanium is mainly used in the aviation and medical industries.
Jinchuan’s acquisition of a controlling stake in the mining project is expected to bring to a close the long-running uncertainty over what promises to be Kenya’s biggest mining project with the capacity to generate up to Sh3 billion annually.
That should significantly increase the contribution of the mining sector to the Kenyan economy that according to the Economic Survey 2009 hit Sh12.3 billion mark in 2008.
Soda ash and fluorspar, which accounted for 1.5 billion tonnes last year, currently account for nearly 80 per cent of the mining sector’s total output.
Jinchuan Group’s plan to invest Sh2 billion into the local mining sector could further thrust Kenya into the league of mineral rich African countries such as South Africa and Botswana that have built and expanded their economies through mining.
The titanium exploration project has been on ice for the last 10 years. Kwale District has 116.9 million tones of titanium deposits bearing minerals rutile, zircon, ilmenite or 14 per cent of the world’s titanium reserves.
Tiomin Resources estimates that titanium deposits should generate more than Sh3 billion in operating cash annually in the first six years of operation. The project has an expected mine life of 11 years.
Leading producers of titanium in the world include South Africa, Canada, Australia, Norway and Ukraine.
The metal is used in the manufacture of aeroplane parts, gas turbine engines, paints and human implants such as hip replacements and heart pacemakers.
Tiomin Resources was awarded a mining licence for the Kwale deposits 10 years ago but lack of funds and the refusal by the local community to vacate the titanium rich lands has stalled the project.
Tiomin’s wrangling board has also made it difficult for it to attract external financiers.
Last year, Tiomin resources, reported heavy losses that appeared to hold back attempts to start the Kwale mineral sands project.
The company suffered a loss of an equivalent Sh577 million for the year ended December 2008 up from a Sh501 million loss in 2007.
These losses appear to have made it difficult for the Canadian firm to attract new financiers for the Kenyan project.
The Canadian firm sought help from Jinchuan Group, a Chinese government controlled producer of metals to start operations in Kwale.
But a vicious boardroom war erupted early this year with Jaguar Financial Corporation of Canada which owns 10 per cent of Tiomin resources accusing Tiomin directors of attempting to sell the company’s subsidiary illegally.
This held back the plans to sell the Kenyan operations to the Chinese firm but Tiomin Resources later said it had cleared all the outstanding issues with its shareholders.
Jinchuan is the largest producer of nickel, cobalt and platinum group metals in China, which has for a yed into many African countries in search of raw materials to feed its roaring economy and insatiable appetite for oil energy and minerals.
“The Government of Kenya must extend the five year period originally granted to Tiomin Kenya Limited in 2004 to finance and build the project to 10 years. The Commissioner of Mines and Geology in Kenya has approved the extension and it awaits approval by the Minister of Finance” said Tiomin.
But the Commissioner of Mines, Dr Bernard Rop, was not available to confirm the deal as he was said to be away from the office for two days.
The entry of China into the local mining industry fits well with Kibaki government’s policy of turning to the East for investment and aid away from the traditional Western Europe and America.
China has been particularly popular with African leaders because its financial assistance comes without demands for good governance and preservation of human rights.
Kenya has signed deals with Chinese companies ranging from oil exploration to mining to road construction.
The government has also opened its market to Chinese goods as shown by the mushrooming of Chinese textile and other product outlets in Nairobi.
However the result of the increasing trade cooperation between Kenya and China has been the proliferation of cheap or counterfeited Chinese goods flooding the Kenyan market, a situation which has stifled markets and prohibited employment because of inability of local manufacturers to compete.
September 21st, 2009, 03:39 PM
they is a lot of activities going both in coal and oil exploration. as week one more firm started oil exploration activities in coastal Kenya.
kenya step up oil exploration
The Government has stepped up oil exploration though no deposits have yet been discovered.
The National Oil Corporation MD Mwendia Nyaga (centre), the Standard Group team led by MD Paul Wanyaga (second right) and Assistant Commercial Lawrence Njiru (right) when they paid a courtesy call on the Corporation’s head offices in Nairobi. Partly hidden is Jane Njoroge (second left) and Corporate Affairs Manager Chris Karanja. Photo: Jonah Onyango/Standard
National Oil Corporation of Kenya (NOCK) Managing Director Mwendia Nyaga, however, said chances of finding oil were high and more explorers had shown interest.
The State-owned corporation that distributes oil products also co-ordinates exploration.
"There are high prospects as we have received positive indicators from the wells drilled," said Mr Nyaga, when he received Standard Group Managing Director Paul Wanyagah in his office on Thursday.
"These indicators have attracted more explorers and in case of discovery, the process will be accelerated."
So far, 31 wells have been drilled and more than Sh1 billion spent in collecting data that would help in further exploration.
Exploration is concentrated in four regions that include the Coast, the basin between Lamu and Lake Turkana, Rift Valley block that extend from Kerio Valley to Magadi and the Mandera basin that covers northern Kenya.
Nyaga said the basins have been sub-dived into 36 exploration blocks where more than ten multinational companies have been licenced to explore seven.
Wanyagah praised the Government for creating the organisation and charging it with the responsibility of co-ordinating exploration. He said with the high oil prices in the global market, discovery of commercial oil deposits would be a boost to the economy.
"We urge you to keep updating Kenyans on exploration efforts especially now that oil prices have been escalating," said Wanyagah.
On oil prices, Nyaga said he shared in frustrations expressed by motorists who have not benefited from the prevailing low crude oil prices in the global market.
September 21st, 2009, 03:41 PM
This time we’ll strike it rich, says oil prospector
After a threat from prevailing global economic recession, oil exploration efforts are looking up once again.
Africa Oil Corporation— a Canadian oil firm— has re-jigged the efforts through a new partnership to explore black gold in the arid northern Kenyahttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.eastandard.net/mag/InsidePage.php?id=1144017012&cid=457&#) region.
Africa Oil Corporation signed the agreement with the Dubai-based oil exploration firm, Black Marlin Energy Ltd (BMEL) to seek for oil and gas resources in Anza basin, thought to hold part of the oil wealth extending to South Sudan.
http://www.eastandard.net/images/tuesday/fj160609_08.jpgAn engineer at an oil exploration site. The renewed oil search is a major boost to Kenya’s oil exploration initiative. [PHOTO: FILE]
They would prospect oil in Block 10A in the Anza Basin of northern Kenya.
The agreement also extends to exploration of potential oil fields in Ethiopia and lead towards drilling if commercial quantities of oil are found in northern Kenya and in Ethiopia’s Ogaden Basin in southern Ethiopia. In Kenya, Africa Oil will transfer a 20 per cent license interest to Black Marlin Energy subsidiary, East African Exploration Ltd (EAXL) in the Production Sharing Contract.
Black Marlin Energy Chief Executive Jeff Hume announced last week, the firm plans to invest Sh770 million over the next three years in the exercise. He said Africa Oil brings strong technical experience to the Joint Venture while Black Marlin’s business model offers high quality seismic services.
"I am very pleased to be able to announce this strategic and exciting transaction and look forward to working very closely with Africa Oil Corp," he said last week.
Hume believes there is good oil and gas potential in the Anza Graben in Kenya. "We believe that oil and gas will be discovered somewhere in Kenya in the next two to three years," he said.
Hume said in the prospective Block 10A Production Sharing Contract, Africa Oil has executed a seismic contract with BMEL’s Upstream Petroleum Services Ltd, a geosciences services unit.
EAX is an operator in Block 1 in Kenya with a 50 per cent interest and is 40 per cent partner in Block L17/L18 near Mombasa.
Kenya represents EAX and Black Marlin’s largest exploration commitment worldwide. Africa Oil holds a 100 per cent interest in Block 10A and has farmed into Block 9 with a 30 per cent interest. Africa Oil Corp farm-in transaction with BMEL is however subject to government approval. The oil exploration agreement is a boost to the country’s oil exploration initiative as it comes against a continued global economic downturnhttp://images.intellitxt.com/ast/adTypes/mag-glass_10x10.gif (http://www.eastandard.net/mag/InsidePage.php?id=1144017012&cid=457&#) that has restricted the operations of many oil-prospecting companies.
Opening the fourth East African Petroleum Conference in Mombasa recently, Energy Minister Kiraitu Murungi said the economic crisis was a serious threat to the country's pursuit for oil deposits as most companies involved in the search were caught up in the situation.
In his Budget speech Finance Minister Uhuru Kenyatta said the Government has introduced new measures to reduce the cost and encourage private sector players to conduct oil exploration activities.
He said plans are in place to grant import duty exemption on equipment and inputs excluding motor vehicles imported by a licensed company for direct and exclusive use in oil, gas or geothermal exploration and development.
Uhuru said these would help fast-track ongoing exploration initiatives and complement Government’s efforts towards addressing the aspirations of the people and facilitate growth of the economy.
The measures in the 2009 Budget anchored on the Theme: "Overcoming Today’s Challenges for a Better Kenya Tomorrow" comes when local oil exploration efforts appears to be looking up again after encountering serious threat from the global economic recession.
Kiraitu said most companies engaged in oil exploration in the country had either put on hold or scaled down operations due to the capital intensity of the exploration process.
"I wish to confirm that Kenya 's exploration efforts have been seriously affected by the economic crisis," he said.
September 21st, 2009, 03:42 PM
Oil drillers Raytec and Lion in merger
http://www.theeastafrican.co.ke/image/view/-/653820/highRes/99649/-/maxw/600/-/i6k9nz/-/india-crude-oil.jpg Oil workers at a storage facility for crude oil at Mangala oil field at Barmer in the desert Indian state of Rajasthan. Drilling in CNOOC’s Block No. 9 in Kenya is expected to start soon. Picture: Reuters
Posted Monday, September 7 2009 at 00:00
Publicly-listed Cnadian oil exploration company Raytec Metals Corporation has announced that it has entered into negotiations to merge with Lion Petroleum Inc — the entity that has been allocated the rights by the Kenya government to prospect oil in two blocks in Mandera area of North Eastern Province.
A recent entrant into the oil exploration field in Kenya, Lion Petroleum has production sharing contracts with the government of Kenya on blocks 1 and 2B.
The news of the intended merger is the latest in the fast-changing oil exploration landcape in Kenya in response to an increasingly liberalised licensing exploration regime.
Until recently, Kenyan authorities were reluctant to approve mergers and farm-ins between oil exploration companies.
But it would apear that authorities now realise that as along as the country constinues to be regarded as a high-risk exploration frontier, the licensing regime must allow mergers and acquisitions if only to sustain the continued flow of foreign venture capital into the country’s oil exploration sector.
Block 1 — which is the subject of the new merger deal between Raytec Metals and Lion Petroleum — covers an area of approximately 31,781 square kilometres and is situated west of Mandera Town, extending into Somalia and Ethiopia.
The merger will also affect ownership of Block 2B which covers an area of approximately 7,807 square kilometres and borders block 9 where Chinese exploration company CNOOC will shortly commence the drilling of Kenya’s first on-shore oil wells in close to 20 years.
Last week, the chief executive of Lion Petroleum, Mike Devji, said the two companies had decided to unite to create a bigger and more dynamic oil exploration company.
Last year, Lion entered into a farm-in agreement with East African Exploration Ltd, a subsidiary of Black Marlin Energy Ltd of Dubai, that has rights over Bloc 1.
Under the deal, Black Merlin will do seismic work on some parts of block 1 in exchange for shareholding.
In a statement last week, Raytec’s president, Brian Thurston, described the relationship with Lion Petroleum as strategic, adding that the company was focused on the company becoming a significant player in the developing oil and gas industry in East and Central Africa.
Only recently, Raytec announced a farm-in agreement with Africa Oil Corp, a member of the Lundin Group.
According to the agreement, Africa Oil will transfer to Raytec a 10 per cent interest in the Block 9 , a 25 per cent license interest in the Block 10A and a 20 per cent interest in Block 10BB.
In July, Africa Oil Corp acquired Turkana Energy Inc which had a production sharing contract on Block 10BB.
The block is approximately 13,000 square kilometres in North Rift.
The block occupies within the tertiary rift trend of East Africa, which has recently yielded major oil discoveries by operators such as Heritage Oil Corp and Tullow Oil plc, both active in the Lake Albert region of Uganda.
In the sate of Puntland Somalia, Africa Oil will transfer a 15 per cent licence interest to Raytec in the Nogal and Dharoor Petroleum Production Sharing Agreements.
In May, 2009, Dubai based Black Marlin Energy Limited announced a farm-in agreement between its subsidiary East African Exploration Limited and Africa Oil Corporation on where Africa Oil will transfer a 20 percent license interest in the Block 10A Production Sharing Contract, located in the Anza Basin of northern Kenya.
In June, Lundin Kenya BV, a wholly owned subsidiary of Lundin Petroleum AB, anncouned that it had executed an agreement with CNOOC Africa to acquire a 30 percent particpating interest in Block 9.
In December, Taiwan’s government-owned refiner CPC Corp and China’s CNOOC signed a letter of intent to expand exploration and production in which it agreed to sell to CPC a 30 per cent stake in its No. 9 exploration block in Kenya.
Drilling in CNOOC’s Block No. 9 in Kenya will take place in August or September, CPC president Chu Shao-hua said.
September 21st, 2009, 03:44 PM
Oil search gains momentum
Years after Kenya launched an off-shore oil exploration bid, multinational companies are still erecting rigs deep in the sea with the hope of striking the black diamond.
The latest entrant into the turbulent waters is Origin Energy (K) Limited, a subsidiary of Original Energy Limited, Australia.
The company is currently assembling a rig to explore Bloc L8 for oil and gas, 100 nautical miles east of Malindi.
The chief geologist in the Ministry of Energy, Mr John Omenge, told journalists at Eden Roc Hotel in Malindi on Thursday: “When you look at the zeal and enthusiasm displayed by these companies, you know it is not for nothing.”
Mr Omenge said there was a lot of hope that the companies would strike oil soon, and urged the relevant government departments to cooperate with the company so that it realised its objectives.
He said Tanzania, which lies within the same Indian Ocean Basin as Kenya, had discovered huge reserves of gas, adding that it was almost automatic that the Kenyan Coast had similar reserves.
The Origin Energy (K) Ltd Company operations coordinator Neil Taylor said the survey and exploration programme could begin in November or December.
“It’s a US$ 10 million-dollar programme (about Sh760 million) that will take six weeks to complete,” said Mr Taylor, adding that a special ship for the job was expected in the country in the next few days.
Origin Energy has completed a similar survey in Bloc 9. The blocs have separate licences for exploration from the government and each covers about 700 square nautical miles. The company will use the 3D Sysmic Survey method for the study.
Mr Taylor said environmental issues had been taken care of after the company held a meeting with environmental stakeholders earlier in the week.
“They survey will be carried out very carefully,” he said. “The process is designed in such a way that it does not interfere with the ecosystem.”
Mr Taylor raised concern over insecurity at the sea, but Malindi district commissioner Arthur Mugira assured the exploration company that tight security would be in place.
^^we can only think its curse when we strike it rich for the time being let the game continue:cheers:
September 21st, 2009, 09:35 PM
Good news at last (Have you watched the the Gold Prices lately)), although more information is still needed.^^
September 24th, 2009, 07:12 PM
Thursday, September 24, 2009
by Alec Hajinoff
Invest in gold, switch to gold, buy gold – are the words heard very often these days (may be not quite as often as six months ago, but nevertheless). We have even seen an ad in a newspaper advertising gold bullion with a huge photo of the precious metal.
Gold has been perceived by investors to be the best instrument to insure against uncertainty, instability and protect against risk for a huge number of years. A perceived long term positive price outlook (demand will always overwhelm the available supply) has generally provided for a solid rational for investment in gold.
With jewellery accounting for three quarters of global gold demand, and Americans (wealthy consumers) together with Indians (populous consumers) being the hungriest buyers of all, it seems the long term consumption fundamentals are in place.
The 400 or so operational gold mines around the world currently churn out some 2,500 tonnes of the metal annually. One of the smaller operators in this, currently fashionable, industry, still appears to be under the radar.
London-listed Goldplat (AIM: GDP) is, despite its size, proudly declaring itself a market leader in gold recovery from by-products of gold and platinum mining process. The company runs its recovery operations in South Africa and Ghana. The supply of raw material for gold recovery comes in the form of purchased by-products from the local mining houses, which in turn get a safe and economical disposal of generated waste. The client base of Goldplat consists of many blue chip gold producers, including AngloGold Ashanti, Goldfields and Harmony.
Goldplat’s recovery plants collectively produced 21,068 ounces in 2009. And as the stocks of materials continue to increase, currently, gold contained in stockpiles is already around 88,000 ounces. To handle this developing business, the flotation capacity was upped at the company’s South African plant in 2009, and a larger mill was commissioned. The plant in Ghana has also seen an installation of an incinerator (to burn fine carbon) and a spiral plant.
There is another asset that is about to become accretive to Goldplat – Kilimapesa. The company has completed the acquisition of the remaining 50% stake in this mining project, which is located in the historically gold producing region of western Kenya. Goldplat now owns 100% of Kilimapesa Gold and its Lolgorien gold project, which includes the operating Kilimapesa Hill gold mine and adjacent exploration assets. It expects to announce a JORC compliant resource at Kilimapesa Gold in the near future.
The seller is International Gold Exploration AB, a Swedish company listed in Oslo. Goldplat has already done the refurbishment work and initiated the conversion of licence from exploration to mining. Despite the concerns some investors, the management says the granting of the mining licence will occur (a condition before gold sales can commence). This project represents an extension into traditional gold mining for Goldplat, from its processing model – a well stated ambition since the company listed on AIM. Gold sales from Kilimapesa mine are expected towards the end of Q3 2009.
Looking into the future what is of note is that Goldplat is utilising its relationship with International Gold Exploration AB well, by the set up of a joint venture, Lolgorien. This will explore the potential of ten, already identified, developing targets in a 213 sq km licence area in western Kenya. The management is also interested in acquisition of additional, small, known deposits of 200,000 – 1m ounces of gold (too small to be of interest to larger miners).
Goldplat’s capital structure is fairly solid; there is only £647k worth of debt, while equity stands at £11.5m. Debt to Capital Ratio is hence a lowly 5.3%. The cost of capital is around 8% (CAPM, including country risk).
The annual revenue to June 2009 increased by 44.5% compared to previous reporting period and came in at £11.1 million. However, higher cost of sales in 2009 caused operating profit to progress by only 4.9% on 2008.
However, annual EPS for 2009 was 1.67 pence (0.95 pence in 2008), an uplift of almost 76% on previous period (greatly assisted by profit generated on sale of subsidiary, increased finance income and decreased finance expense). This kind of income gives us return on equity of 16.3%, indicating a clearly profitable business.
Total Assets added up to £14.4m at 30.6.09 (£11.2m in previous period). The increase has come from higher capital assets, increased receivables and higher cash (cash was £2.2m at end of 2009). Total liabilities added up to £2.8m at 30.6.09 (£2.2m in previous period). The increase was caused by higher borrowing, as well as higher payables.
Liquidity is exceptional at Current Ratio of 3.22. The entire cash inflows from operations, £1.1m in 2009 (£775k in 2008), went towards CapEx investments.
The current quotation of 10 pence a share for a gold miner with cash in the bank, almost no debt and annual earnings per share of 1.67 pence doesn’t suggest the market is giving the company much credit for progress to date.
On a P/E (Price/Earnings) valuation the stock must be worth at least 15 pence a share on current fundamentals, without taking into consideration future discoveries and mine developments (assumptions: Return on Equity (high) = 16%, (stable) = 14%, Growth (high) = 15%, (stable) = 10%, Cost of Equity (high) = 12%, (stable) = 11%).
Despite shareholders’ voiced issues on internet chat rooms about trading volumes and Demetri’s (CEO) large shareholding, the company is clearly heading places.
Already operating in Africa’s largest (South Africa) and second largest (Ghana) gold producing regions, Goldplat continues to search for additional opportunities in its current locations as well as in Tanzania and Zambia.
Add to this the company’s management all having mining experience and the fact that all are based in Africa and you have got an interesting little miner.
September 25th, 2009, 03:43 PM
Kenya's government has issued 14 new oil and gas exploration licences in the past year, and has discovered coal deposits. According to reports, it has been drilling in various basins, but so far only an undetermined amount of coal has been found. Out of 35 wells drilled in the eastern districts of Kitui and Mwingi, 20 have shown a presence of high quality coal, Energy Minister Kiraitu Murungi said.
He confirmed that the government has contracted out the work of establishing the extent of the reserves and the commercial viability of the coal, to be completed by mid-2009.
Further coal explorations are planned for the Karoo belt on the eastern coastline, he said.
September 25th, 2009, 03:47 PM
Nairobi — International companies have been asked to bid for a tender to extract coal in parts of Kitui and Mwingi districts.
The Ministry of Energy asked interested firms to bid for the last phase of the exploration in the Mui basin as part of efforts to determine the commercial viability of the reserves. This comes in the wake of rising global oil prices, which have in turn pushed up the cost of basic goods locally, including the price of fuel.
According to the tender notice published in the local dailies on Thursday, successful firms will be required to drill 20 more wells to ascertain the quality of the coal and recommend the best method for its extraction.
The companies are expected to start drilling in September. They will, among other things, carry out a detailed analysis of the coal seams and determine the quantities available.
However, there are fears that the fresh bids may not attract the best drilling companies. This is the second time the ministry is inviting private companies to boost Government efforts which have been slowed down by lack of proper equipment.
Last July, the ministry floated similar bids but failed to get responses from firms within East Africa to carry out extensive drilling. Sources at the ministry said most of the respondents were only specialists in light borehole drilling and lacked the capacity as they had not ventured into coal mining before.
Coal deposits in the Mui basin are being touted as a viable energy alternative to cushion the country's economy against the effects of escalating global oil prices. Energy experts also said the discovery came at the right time because Kenya needs a lot of energy to drive the Vision 2030 development agenda, which seeks to turn the country into an industrialised country in 22 years.
Coal is used in a various ways but mainly in the generation of electricity. In South Africa, where coal mining is a major activity, electricity is four times cheaper than in Kenya.
Sixty seven per cent of Kenya's power is generated from water, 10 per cent from geo-thermal and 23 per cent from thermal sources which are affected by international fuel prices.
Acting chief geologist Alfred Odawa said using coal would free some of the country's foreign exchange reserves for other purposes. According to him, Kenya could become fully industrialised by 2020 if it had its own sources of energy.
Exploratory drilling spearheaded by government geologists which, began in 2001, has been yielding encouraging results, raising hopes of Kenya becoming a coal producer. However, the geologists have been using an old and ineffective rig until last year when the Government bought a new one.
Out of the 30 wells drilled so far at varying depths, geologists have encountered
September 29th, 2009, 11:18 PM
Renewed hopes as UK firm finds more gold in Kenya
By John Oyuke
Kenya will become an important gold producer in Africa if a mining firm, hopeful of pulling a significant gold discovery is anything to go by.
The London-listed gold producer Goldplat says it has concluded a deal in which it acquired 100 per cent of Kilimapesa Gold, a gold mining firm operating in Trans Mara District as a show of this confidence.
The firm will operate Kilimapesa Hill gold mine and adjacent exploration assets located within the historically gold producing Migori Archaean Greenstone Belt.
The locally registered Kilimapesa Gold has a license to explore the gold potential of the 213 sq km Migori gold belt and is seeking to expand into Tanzania and Uganda. Its current plant can produce up to about 100kg gold per annum.
Viability of the project
Goldplat Chief Executive Demetri Manolis said the viability of the project was underpinned by the early production at Kilimapesa Gold, which is performing well and producing excellent results.
He said the firm is well placed to build the project into a highly profitable gold mining operation.
"With the current favourable gold outlook and consensus pointing to a strong year ahead, we intend to take full advantage of the current gold demand as we increase our production and efficiencies at the mine," he said.
This, he added, would complement the firm’s profitable gold recovery operations in South Africa and Ghana and increase its robust investment case.
He said after acquiring a majority stake of Kilimapesa Gold Limited, increased cash generation and strong balance sheet, Goldplat would acquire additional high quality grade assets to fulfill its strategy of building a mid-tier gold producer in Africa.
Western Kenya produces about 2,000 kg of gold per annum, mainly handled by small-scale traders who sell their metal to middlemen. This is not captured by the national data.
The mining firm’s entry will boost the country’s foreign exchange earnings, employment and diversify western Kenya’s economy now relying on the dwindling fishing industry, tobacco and sugarcane farming.
The project is expected to stir up activity around Migori and Trans Mara districts that are among the poorest regions. Statistics show Kenya earned Sh592 million from trading 0.3 tonnes of gold last year, but with the capacity of 34 tonnes in the Migori belt, the country could earn close to Sh67 billion from trading gold.
The local mining industry is dominated by production of non-metallic minerals, such as soda ash (trona), flourspar, diatomite, vermiculite, and natural carbon dioxide.
The Kilimapesa Gold plant was commissioned in January this year.
October 19th, 2009, 07:28 AM
Posted: Monday , 17 Aug 2009
Red Rock Resources (AIM:RRR) which is perhaps better known for its proposed association in Western Australian manganese and iron ore with Brian Gilbertson's Pallinghurst and Jupiter Mines, has announced it has entered into a deal with Kansai Mining (TSXV:KAN) which could bring it operating control over the latter's very interesting Migori gold project in south western Kenya, close to the Tanzanian border.
The Migori project tenements are on the Migori Greenstone Belt lying just north of the Tanzanian border. This belt hosts outcropping gold shows, structures and geochemical anomalies along the entire 68km strike length of the two tenements. It also hosts the famous Macalder copper-zinc-gold-silver volcanic massive sulphide (VMS) deposit, discovered by Falconbridge in the 1930s and mined until the early 1960s. It is one of ten such greenstone belts in the area, eight of which are across the border in Tanzania which has seen dramatic growth in gold exploration and exploitation in recent years. Historically the area has seen a number of gold mining operations.
Under the agreement, Red Rock can acquire up to 60% of Mid-Migori Mining Company, the Kansai subsidiary set up to develop the project and which owns the beneficial title and mining rights of the tenements.
Commenting today, Red Rock chairman Mr Andrew Bell said: "The Tanzanian craton just extends into Kenya, and due in part to its location this Kenyan belt has not attracted attention. There is potential here for the development of a gold field with several million ounces, including surface and high grade zones that can be brought into early production."
Talking to Mineweb in London last week, Bell said that Kansai had already determined an NI 43-101 1.17 million ounce indicated gold resource, and there is additional easy-mining potential in old mine tailings which contain over 67,000 ounces of gold.
So far, Bell asserts, only the western 10km of the belt has been explored to any degree in recent times and he expects the resource figure to rise significantly once drilling is resumed. Bell also feels that there may be further VMS orebodies similar to Macalder present.
"This is an attractively structured deal" says Bell "allowing us to produce and get cash flow as we explore. It is a huge opportunity for us, and potentially the company-defining event we have been looking for."
Under the terms of the agreement with Kansai, Red Rock has paid a non-refundable cash deposit of US$25,000 and has until September 10 to complete due diligence. Subject to a satisfactory outcome, Red Rock will then be allotted 15% of MMM's issued share capital in return for payment of US$725,000, comprising a mix of cash (US$350,000) and new Red Rock shares (US$375,000). Payment will be made in three tranches, the first on completion (which shall not be later than September 30), and the second and third tranches three and six months thereafter. The number of shares to be issued will be determined by reference to the volume-weighted average price of Red Rock shares in the three days before each payment is due. Red rock will be taking over the exploration programme assuming the due diligence is favourable.
A late 2007 drill programme aimed at raising the resource base to over 2 million ounces of gold was curtailed when the drilling company withdrew its rigs from the country during the period of instability that followed the Presidential election. Samples from the completed holes at Kakula, Gori Maria and Macalder were analysed, but no revision of the 43-101 resource base has yet been carried out, pending the completion of the programme with planned holes at MK and Nyanza.
While much of the ground explored to date has shown a relatively low grade gold resource of from 0.9 to 1.0 g/tonne there are significant high grade areas too with the Nyanza zone having been shown to contain multiple gold bearing veinlets and stockworks with some high grade intersections running in excess of 1oz/tonne gold. The current indicated resource on this zone is 842,000 tonnes at 5.32g/t gold for 144,000 ounces. The zone has been identified over about 300 metres along strike but remains open, and drilled to a vertical depth of less than 100m.
MK too is considered to be a highly prospective zone, and has an indicated resource of 1,444,000 tonnes grading 2.32 g/t gold for 108,000oz gold, 63,000 oz of which is in material grading over 9g/t at shallow depth. Drilling to a vertical depth of about 100m has indicated there may be at least two further high-grade shoots present with some underground development completed from an adit 25m below outcrop. There is a possible strike length of over 700m.
Given the similarity to the Tanzanian greenstone belt across the border, Red Rock is very hopeful of proving a significant gold discovery and putting Kenya on the map as yet another important African gold producer.
October 19th, 2009, 02:41 PM
Tanzania produces gold, but they are still a poor nation.
The same is for Mauretania who has a lot of copper, iron etc reserves, but still they are poor. The same is for Zambia, Congo, Uganda etc.
The only one who makes a lot of money from it are the foreign mining companies.
Gold, iron, copper etc are good if it is controlled 100% by the state.
October 19th, 2009, 05:26 PM
Tanzania produces gold, but they are still a poor nation.
The same is for Mauretania who has a lot of copper, iron etc reserves, but still they are poor. The same is for Zambia, Congo, Uganda etc.
The only one who makes a lot of money from it are the foreign mining companies.
Gold, iron, copper etc are good if it is controlled 100% by the state.
The other problem is that, Tanzania always been a strict socialist economy, they have just opened up thier, market.
The same goes for Zambia , Congo. They had socialists economies , plus stupid dictorships( massively corrupt). and only depended on that one export cash earning.
Kenya is different because their economy is already divertified and are heavily capitalis nation than any country in central and east africa.
and yes, the Gold mines must be 100% governement controled.
October 19th, 2009, 06:54 PM
^^good points BUTEMBO
this is alot of good news in this thread. Kenya seems to be having a resource boom period