Posted: Wed, 16 Jan 2008
[miningmx.com] -- THE private placement of up to C$15m by Pangea Diamond Fields may well signal a diversification from London to Toronto by the AIM-listed diamond explorer.
The reason is that Canadian investors have more appetite for this kind of speculative junior mining stock than investors in London which makes listing on the Toronto stock exchange more attractive.
It’s significant the money will be raised by a syndicate of agents led by RBC Capital Markets which is one of the leading Canadian financial institutions involved in the resource sector.
Ambrian Partners - the nominated adviser and broker (Nomad) which handled Pangea’s listing on AIM in October 2006 after placing shares at 60p to raise ₤15,9m - is “included” in the syndicate.
Diamond stocks generally have not done well over the past year despite widespread predictions that a shortage of diamonds is looming as jewellery demand rises at around 5% annually but no major new mines have been found.
According to Pangea, a shortage of rough supply is expected for the next ten years as global production stays constant and demand increases which will push up the price of rough diamonds.
“The market will be favourable for at least five years for any company bringing successful new projects on-stream,” a Pangea investor presentation stated.
Yet Pangea has fared particularly badly on AIM. The share price ticked up briefly to around 64p in May last year but since then it’s been one way traffic back down. Pangea dropped to a new low of 49.5p today.
By comparison, Clifford Elphick’s Gem Diamond has at least held onto its value since it listed in London at 950p in February last year.
Toronto-listed Rockwell Diamonds has way outdone both of them. Since listing at 40c in February 2006 Rockwell shares have twice reached the 80c level and currently sit around 60c. The company listed on the JSE in December.
Shareholders in JSE listed Diamond Core Resources this week overwhelmingly approved a takeover of the company by Toronto-listed BRC Diamonds to create BRC Diamond Core which will have its primary listing in Toronto.
Speaking from London, Pangea CEO Rob Still commented: “AIM is a capital raising market after which there seems to be little liquidity for trading the shares.
”Investors also seem wary of many of the junior mining stocks and what they are looking for right now seems to be cash flow. We are not there yet but we want to be cash positive by mid-2009.”
He added the money being raised was needed to take three of Pangea’s exploration projects into commercial production.
Pangea has ten projects underway in four countries which are the Central African Republic (CAR), the Democratic Republic of Congo (DRC), Angola and South Africa.
So far one project is at a “pilot” mining stage while three are at bulk sampling stage with a target set of getting six of them to the bulk sampling stage by the first quarter of 2008.
The pilot mining is being carried out at the Cassanguidi project in Angola while bulk sampling is underway at the Dimbi project in the CAR as well as the Harts River and Patsema/Geluksdal projects in South Africa.
Lithium has been removed due to my involvement in the acquisition of lithium prospects in Africa. Contact Carel van der Merwe at email@example.com or +27 62 538 7750 if interested.
Africa > Algeria - Angola - Benin - Botswana - Burkina Faso - Burundi - Cameroon - Central African Republic - Chad - Congo (Brazzaville) - Congo (Kinshasa) - Côte d'Ivoire - Djibouti - Egypt - Equatorial Guinea - Eritrea - Ethiopia - Gabon - Gambia - Ghana - Guinea - Guinea-Bissau - Indian Ocean Islands - Kenya - Lesotho - Liberia - Libya - Madagascar - Malawi - Mali - Mauritania - Morocco - Mozambique - Namibia - Niger - Nigeria - Rwanda - Sao Tome and Principe - Senegal - Sierra Leone - Somalia - South Africa - Sudan - Swaziland - Tanzania - Togo - Tunisia - Uganda - Zambia - Zimbabwe