A new fortnightly African Review from Tim Strong at Kangari Consulting
KANGARI'S AFRICA ROUND-UP
Whilst things are generally slow in the industry due to the COVID-19 outbreak there is still some (and by some, I mean minimal!) activity happening on the continent.
Resolute Mining (ASX/LSE: RSG) has pledged US$1 million to the Government of their host nations (Mali & Senegal) to help combat COVID-19, this was a swift follow up of Barrick’s (TSX:ABX/NYSE:GOLD) pledge of US$1.5 million for the Malian government, US$1.7 million for the Tanzanian government, US$1.3 million to the Ivorian government, US$972,000 to the Senegalese government, US$530,000 to the Zambian government and US$1.5 million to the DRC. It is great to see these major companies contributing to their host countries in times of need.
In other COVID-19 related news, the diamond industry is in disarray (more so than usual). African focused producer Petra Diamonds (LSE:PDL) is asking for more credit from its lenders to the tune of US$54m due to a decrease in production and demand for diamonds.
The global diamond market has seen a gradual decrease in demand, which has culminated an almost complete cessation of demand since COVID-19 appeared on the scene in January. Since that time, Petra’s share price has fallen from a high of GBP£11.10 to a closing price of GBP£2.39 on Thursday, gulp!
Petra has spent a considerable amount of money developing and improving their Cullinan Mine in South Africa.
Other news from South Africa, all mines are closed. Workers were told to pack up tools and go home within 24 hours. The issues being raised is that these mines will take a lot longer to bring back from shut down than they were to close – risking supply to the gold market. South Africa is the 7th largest producer of the precious metal.
In brighter non COVID-19 news Exore Resources Ltd. (ASX:ERX) has released some positive drilling results from their Bagoe Project in Northern Cote d’Ivoire. Initial Aircore drilling returned 12m @ 3.88g/t gold from 8m. The project is located south of Perseus Mining’s (ASX:PRU) 1 million ounce Sissingue project. Exore also report that field activities are continuing and that they have a whopping AUS$12.7m in cash – a very strong balance sheet for a junior in these times.
Other positive news from the continent, Pensana Metals Ltd (ASX:PM8) reported some positive drill results from its Longonjo Neodymium/Praseodymium (REE) project in Angola. They drilled 30 meters @ 3.25% REO from 74m of depth. Pensana promote this project as one of the highest grade and largest NdPr deposits in the world, they also highlight the excellent infrastructure close by. It seems investors here are liking the news as this week they saw a surge of 45% in their share price since the 3rd of April.
Finally, last week I had the pleasure to be a panelist on Spotlight Mining’s COVID-19 E-Conference, you can check it out HERE.
During the E-Conference, I discussed the impacts of COVID-19 on the mining industry in West Africa. This included current production interruptions, both in the junior and major sectors, as well as the likely long term effects on the industry should this health crisis continue.
Another topic which caught a lot of interest was that of the mental health and human capital cost of this pandemic, especially to FIFO works in Africa – some of whom may be reading this now, how is the 3rd month of work going?