West African Minerals (WAFM) reported a reduced loss at the full-year mark, but its share price plunged by 30 per cent over the next three days after the company announced the resignation of co-chairman and chief executive Stephen Dattels. The departure of the mining financier could increase market anxieties in light of the fact that Gualtiero Giori, a non-executive director and co-founder of WAFM, sold his entire beneficial holding of 35.9m shares (12.5 per cent) at the end of April.
The market value of WAFM has fallen by over 80 per cent since mid-March, as early speculation over the potential size of its iron ore deposits in Cameroon was not matched by successive drill results, which failed to find enough high-grade mineralisation. Nevertheless, the company is targeting a maiden resource statement in September from the South Djadom permit in Cameroon following completion of the Phase II drilling programme. South Djadom has turned in the most encouraging results to date, but WAFM also aims to generate a resource estimate through an infill drill programme at the coastal Binga prospect by the end of this year.
Analysts at broking house SP Angel give a discounted valuation of $997m (£651m) for a single licence in Djadom based on the adjacent discovery made by Sundance Resources, but this estimate is predicated on untested assumptions; a meaningful resource estimate cannot be gauged by the limited drill work carried out so far - and that also applies to unit cost estimates.
| WEST AFRICAN MINERALS CORP (WAFM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 12p | MARKET VALUE: | £34.6m | |
| TOUCH: | 11.5-12.5p | 12-MONTH HIGH: | 85p | LOW: 15.25p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 10.3p | NET CASH: | £9.4m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | nil | -1.01 | -1.42 | nil |
| 2012 | nil | -3.56 | -2.81 | nil |
| 2013 | nil | -3.06 | -1.08 | nil |
| % change | - | - | - | - |
