27 Jul | Berkeley Mineral Resources
Anyone looking at the three month chart below (courtesy of SharePrice.co.uk) could be forgiven for assuming that June contained a profit warning or the like for Berkeley Mineral Resources. But not so! Just another month in the life of an AIM-listed minerals share.
In fact, since June of this year, in this amateur’s humble opinion, there’s been pretty much nothing but good news coming out of Berkeley Mineral Resources.
Let’s take a closer look.
Below is the nuts and bolts of the past couple of months worth of BMR’s news releases in a timeline. For the full releases that these (italicised) snippets are taken from, head on over to BMR at Interactive Investor or visit the Berkeley Mineral Resources website.
10th June 2011
Berkeley Mineral Resources…announces that due diligence on BMR’s proposed purchase of all the remaining stockpiles of tailings not presently owned by it at the Kabwe mine in Zambia has been completed satisfactorily and the vendors have been notified of this. Accordingly, the parties are now proceeding towards formal Completion of the acquisition agreement which is expected shortly.
Good news? Masoud Alikhani, Chairman of BMR obviously thought so:
“Completion of the Kabwe acquisition will mark a further significant milestone in the development of BMR into a major producer of zinc and lead. Directly thereafter, we intend to finalise the design and sourcing of the processing plant, which is fully funded, to enable us to rapidly exploit the very substantial resources acquired at Kabwe.
“We are also progressing the acquisition of the tailings dumps at Luanshya and reviewing other opportunities to expand the business”.
Personally I like the term, “fully funded”.
Then as promised, June 22 saw the formal completion of the acquisition agreement.
22nd June 2011
Further to the announcements made on 28 March 2011 and 10 June 2011, Berkeley Mineral Resources Plc, which is primarily engaged in processing mining tailings, announces that the Company has completed the purchase of the remaining stockpiles of tailings not presently owned by it at the Kabwe mine in Zambia.
BMR is paying US$2.5 million in cash on completion. In addition, the vendor has the right to receive further consideration of either £4.8 million in cash or 80 million new shares in BMR or a combination of both. BMR has agreed that the vendor must make its election regarding the nature of the consideration within the next 14 days.
and some options:
BMR has also obtained an exclusive option, valid until 15 July 2011, for it to acquire certain further Stands at Kabwe upon which are located an existing partially constructed crushing, screening and flotation plant, an office block and associated infrastructure. This area is scheduled to be used as the site for the beneficiation plant for the tailings.
A further exclusive option has been procured, valid until the same date, to acquire an existing licence to all the residual partly mined or unmined underground ore bodies remaining at the former Kabwe mine, together with shafts and other infrastructure; in all, these ore bodies are historically estimated to contain in excess of 22 million tons comprising some 1.2 million tons of zinc, lead, silver, cadmium and other valuable minerals.
There was a placing announced too, but you can’t make an omelette without breaking eggs:
Pursuant to the terms of the Underwriting Agreement announced on 11th May 2011, the Placing Shares have now been subscribed for in full. As a result the Company will issue 145,000,000 new ordinary shares at a price of 4p per share. In addition to the Placing Shares, the Company will issue one warrant for every two Placing Shares subscribed, exercisable at 6p per warrant at any time up to three years from issue. Through this placing the Company has raised a total of £5.8 million before expenses. The monies will provide additional working capital.
Nice! Masoud Alikhani, commented:
“BMR first obtained mining rights in Zambia in July 2008, recognising it as an excellent mining jurisdiction. As evidenced by the current proposed acquisition of Metorex Plc, the former owners of the Kabwe dumps, by Brazilian multinational Vale, Zambia is rapidly becoming a favoured international mining destination. We are pleased to have now completed our latest and most important acquisition in the country and look forward to BMR achieving a swift transformation into a substantial minerals producing company”.
Good news? Well for the most part you would have thought so, but the market didn’t agree forcing the following news out of BMR in late June reiterating that the company was fully funded (that term again) for all existing projects.
27th June 2011
Berkeley Mineral Resources…announces that it is aware of no reason for the recent movement in the share price. The Company is fully funded for all existing projects.
Good news? Well, not bad news, if anything, no news. It’s seemed to stem the flow though.
Then following some late-month UBS notifications of major interest we got a Luanshya update.
1st July 2011
Berkeley Mineral Resources…announces that, having carried out due diligence, it intends to enter into a Shareholders’ Agreement with Ng’wena Mining Resources Ltd to acquire a majority holding in the Luanshya copper tailings, as per the Memorandum of Understanding announced on 4th May 2011.
Total consideration for the 76% interest to be acquired is US$6 million, of which US$1.75m is payable on completion with the balance of US$4.25m payable in 2012.
A report completed in 2008 by RSG Global concluded that the three tailings Dams contained SAMREC – and JORC- Indicated resources of 162Mt of tailings material at a copper grade of 0.24%, in total containing 380,700 tons of copper metal.
Then on 14th July we got a JORC date for the entire tailings resource at Kabwe and an update on the options alluded to in the RNS of 22nd June 2011.
14th July 2011
The Company can confirm that a JORC compliant resource definition for the entire tailings resource at Kabwe is on schedule to be published by the Mineral Corporation prior to 31 July 2011.
In order to secure and optimise the long-term future of its tailings treatment business, BMR has now exercised the options it has with two Zambian-registered companies, Silverlining Ventures Limited (“Silverlining”) and Alberg Mining Limited (“Alberg”).
Silverlining owns stands 5203, 5209 and the remainder of stand 5203 in the Industrial Township of Kabwe. These stands are located opposite BMR’s stockpiles site (stand 5187) and contain an historic crushing, screening and flotation plant, including refurbished thickener dams, new flotation cells, a power sub-station, water supply, railway sidings and an extensive furnished and IT-connected office block. This infrastructure is capable of being overhauled to provide the site beneficiation plant necessary to process the Kabwe stockpiles. The precise process is currently being evaluated by Metanza.
Alberg owns the mining rights to 703 hectares at Kabwe which contain all the residual partly mined or un-mined underground ore bodies remaining at the former Kabwe mine, together with existing shafts and other infrastructure.
Sorry, lots to take in in a single post.
Now I don’t claim to be a minerals expert (just an amateur investor who fluffs as many as he nails) but even to the layman, Berkeley seems to be doing some good business down there in Zambia and appears to have laid some fairly solid foundations.
So, I put my money where my mouth is and topped up and topped up again.
We’re now holding 157,913 shares averaged in at 4.94 pence a share. We’ve got a BMR top-heavy portfolio awaiting a little JORC-related news before the end of the month and I couldn’t be happier.
Please don’t take my word for it, never invest money you can’t afford to lose and always do a ton of homework, gathering data from a wide range of sources. Thanks again for dropping by.