Small Talk: Iron boost for African Minerals
Monday 22 February 2010
You just can't keep a man like Frank Timis out of the news. The boss of the Aim-listed African Minerals has seen shares in the iron-ore producer jump by – wait for it – an incredible 1,578.9 per cent during the last 12 months. You read it correctly the first time. The main reason for investors' excitement in African Minerals is the increasingly impressive Tonkolili asset in Sierra Leone.
The group said last week that it now estimates that the site holds 10.5bn tonnes of iron ore, making it the biggest deposit in the world, the company claims.
The news will also have raised an eyebrow in Kazakhstan. The FTSE 100-listed miner Eurasian Natural Resources Corporation (ENRC) was linked to a takeover of African Minerals last year, after Mr Timis issued a statement saying so.
The move irritated ENRC no end, but at no point did the group actually deny that the statement was true.
In the same week, ENRC bought another African miner, Camec, and last Thursday said it was buying a copper and cobalt processing plant in Zambia for $300m (£195m). A spokesman for the group said the company had nothing to add to African Minerals. Mr Timis has in the past stoked controversy, of course. In 1996 he founded Regal Petroleum, which in 2003 acquired a 60 per cent of an oil field in Greece. Regal claimed that the field was one of the biggest in Europe, containing as much as a billion barrels.
Sadly, and after the share priced peaked at 509p, giving the company a market capitalisation of £500m, it transpired that in fact the field was all but dry, leading a 60 per cent loss in the value of Regal.
Sable will help run DMC
Another Aim-focused mining behemoth that can't help attracting attention is the former England test cricketer Phil Edmonds.
Sable Mining Africa, his Aim-listed natural resources investment group, last week said it had bought a 29.33 per cent stake in the South African coal digger Delta Mining Consolidated (DMC), for $17.6m (£11.4m). The move gives Sable exposure to DMC's coal interests in South Africa and Botswana and is in line with the company's aim of investing in exploration and development projects in coal and uranium assets in sub-Saharan Africa.
Mr Edmonds has a number of interests in Africa from natural resources to high-end private hospitals. He does at least have plenty of time to invest in Sable, after he sold the aforementioned Camec to ENRC last year. The group's market capitalisation stands at £131m and has Harbinger, Fidelity and Oppenheimer among its backers.
"This deal represents our first transaction aimed at building Sable into a major mining company focussed in southern Africa," said Andrew Groves, Sable's chief executive.
"DMC has a well-defined coal portfolio and we believe we can actively assist in its development, through the application of our combined experience covering a range of natural resource development companies in sub-Saharan Africa."
Daisy's £10m cash purchase
The Aim-listed telecoms group that specialises in buying IT services from the likes of BT and Cable & Wireless, and then reselling them on to the SME sector, last week splashed out £10.45m in cash to buy the Northumbrian IP telecoms carrier BNS Telecom Group – another former Aim-listed group. The 20p-a-share offer represented a chunky 220 per cent premium to BNS's closing price on 3 June last year.
"This offer makes great sense given the scale and position of BNS within the UK SME market," said Matthew Riley, Daisy's chief executive, right. "This acquisition is another step towards the Daisy Group consolidating this fragmented sector following the integration of our previous acquisitions, Daisy Communications, Freedom4, Vialtus Solutions, Redstone Telecom, AT Communications and Eurotel, and the completion of the acquisition of Managed Communications earlier this month."
Those companies have been bought with the £84m the group raised when Freedom4 reversed into Daisy Communications last year, creating Daisy Group. Before that deal, Daisy Communications made 24 purchases since listing in 2000.
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