First-half figures for Liberia-focused gold explorer Aureus Mining don't tell investors much of importance - other than management burned through $11.7m (£7.4m) of cash in the half. The funds were put to good use, however, as Aureus has advanced its New Liberty gold project in the country nearly towards a construction decision, with just a few final hurdles to go - leaving recent share price weakness looking like a decent entry point.
Aureus upgraded its resource estimate for the project twice - it now stands at just over 1.7m ounces - while a bankable feasibility study for the project is due later this month. That should point to the existence of a robust gold mine with relatively low cash costs, capable of producing around 120,000 ounces a year. Armed with that management can approach banks for funding. Admittedly, current conditions aren't ideal for securing mine finance but, importantly, capital expenditure should be low at around $130m. Environmental permits are also expected later this month.
Broker RBC Capital estimates a risked net asset value of 122p a share.
AUREUS MINING (AUE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 55p | MARKET VALUE: | £66.6m | |
| TOUCH: | 54-56p | 12-MONTH HIGH: | 92p | LOW: 46p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 62¢* | NET CASH: | $19.4m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | nil | -3.84 | -3.00 | nil |
| 2012 | nil | -5.76 | -4.90 | nil |
| % change | - | - | - | - |
*Includes intangible assets of $56.6m, or 47¢ a share £1=$1.58 | ||||
