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M P Evans plc (AIM:MPE)
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Mkt Cap: ??182.64m
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Price: 358.25p
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BUY
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Decision of Indonesian Court
on Dispute
???The board is pleased to announce that Dr. H
Rahmat Shah's appeal to the Supreme Court in Jakarta to overturn the ruling, in the
Group's favour, of the Medan District Court and Jakarta Administration Court
has been unsuccessful.
Accordingly, the sale and purchase agreement
signed in March 2002 stands. Under this agreement the Group,
through its 80% subsidiary, PT Pangkatan Indonesia, acquired
80% of PT Sembada Sennah Maju, the owner of the 1,813-hectare oil-palm
estate, Sennah, in Sumatra. It is possible
that Mr. Shah may file a request for a judicial review to the Supreme Court
but only if he is able to produce new evidence in support
of such a review. The Group's Indonesian legal advisers do not consider this
a likely prospect.???
Comment
We
think that this says it all. It is one of those pieces of news that had the
decision of the court gone the other way it would have created shock waves
not only for M P Evans but for the industry as a whole.
Nevertheless it is pleasing to see the result and we continue to recommend
MPE as a BUY and our favoured stock in the sector.
Comparables
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Medusa Mining plc (AIM:MML)
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Mkt Cap: ??68.8m
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Price: 49p
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BUY
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Bonanza style grades
reported at Co-O
Medusa Mining has reported
assay results from the final hole, MD45, of its latest drilling programme at
its Co-O gold mine in the Philippines.
Significant gold intersections have been reported in this hole, including
high grade zones 300-350m below the main adit level, indicating the
mineralisation remains open at depth. Two diamond drilling rigs are
continuing drilling on-site.
Significant intersections from diamond drill
hole MD45 include:
??? 2.40m @ 25.61g/t Au
??? 5.20m @ 107.51g/t Au (including
0.5m @ 271.44g/t Au and 0.35m @ 1,077.5g/t Au)
??? 0.40m @ 160.6g/t Au
This hole and the other twenty completed will
form the basis for a new resource estimation expected to be announced in
September 2007.
Comment
These
new intersections, particularly given that they come from a single hole, are
excellent results and are indicative of the long-term potential of the
high-grade, low-cost business model for mining at Co-O. Together with the
summary of other significant intersections (>3g/t Au) from the programme,
they demonstrate that this model is sustainable, particularly given the depth
of some of the intersections at 300-350m below the main adit which demonstrate
that significant exploration potential remains at Co-O.
We
also note that of the significant intersections reported more than a third of
them are 15 gram metres equivalent (i.e. are richer than a 1m @ 15.0g/t Au
intersection) or higher. We consider that Medusa are likely economically
mining 1m widths at 7.0g/t or less, which gives an indication of the highly
promising nature of these results.
In
gold mining there is an expression that ???grade is king??? and in Co-O
Medusa has one of the highest grade commercially operated gold projects on
AIM, if not the highest. This should enable Medusa, which has established
very simple, low overhead mining operations there, to maintain and improve
upon their already low cash operating costs of US$217/oz. Beyond the resource
upgrade expected in September the next challenge is to increase production
rates. With good exploration potential and the ability to replicate the
operations at Co-O there is plenty of growth potential, particularly at
current price levels. We retain our BUY recommendation.
Ambrian is
engaged as corporate broker to this company.
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African Copper plc (AIM:ACU)
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Mkt Cap: ??124.9m
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Price: 86p
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N/R
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Deep Foundations for
Growth, Like the Great Baobab
African
Copper a copper mine developer with assets in Botswana
today issued half year results for the interim period ending June 2007. The
company announced that it expects production of its first copper concentrate
from its Mowana Mine at the end of Q1 2008.
Mowana, formerly known as the
Dukwe Mining Project has been eponymously renamed ???Mowana??? meaning the
baobab tree in the local Tswana language. This refers to the presence of an
ancient baobab standing near the entrance to the mine property.
Significant construction progress has been made
at the mine with with African Copper reporting that the deep footing
foundations for the primary, secondary and tertiary crushers were completed
during Q2 ???07 and that the final installation is expected before end of Q4
???07.
Furthermore in June 2007 the company reported
an updated mineral resource estimate which included 9,000 meters of
additional drilling. The results were evaluated by Caracle Creek
International Consulting with a cut off grade of 0.2 % copper, are tabulated
below;
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Mineral Resource Estimate
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MT
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Cu
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Cut Off
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Grade
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%
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%
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Measured
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28.0
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0.92
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0.20
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Indicated
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29.9
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1.08
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0.20
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Inferred
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30.6
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0.88
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0.20
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The estimate of material between the surface
and 175 meters below surface, considered for open pit extraction includes;
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MT
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Cu
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Cut Off
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Grade
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%
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%
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Measured
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11.5
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1.10
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0.20
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Indicated
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6.1
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1.33
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0.20
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Inferred
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6.3
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0.87
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0.20
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Comment
From
this the company has embarked on an open pit optimisation plan, to be
followed through with a complete production forecast and practical mining
plan. African Copper anticipates this to be completed late Q3, early Q4 2007.
Mowana
which will ramp up to full production during 2008, will feed a flotation
concentrator with a design capacity of 3,000 tonnes per day or 91,250 tpm.
A
reported working capital facility of GBP 46.3 million at June 2007 will
ensure that the GBP 30.5 million capital cost of the flotation concentrator
will be met, of which GBP 10.5 million has already been spent. This should ensure
that Mowana Mine will successfully come into production on schedule.
- Ambrian Metals &
Mining Team