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Monday, May 20, 2013

Minesite Newsletter 20th May 2013

Untitled Document
Minesite.com Informed comment and independent mining news
Minesite Weekly Roundup 13th - 20th May 2013
Dear Minesite subscriber,
Weekly Review

The average life-span of a dog, according to the trusty fount of knowledge that is the internet, is between about 10 and 14 years. Or at least that's the average life of a smaller dog - like Twigg, the dog that Mark Parker named his first mining company after.

Twigg (the company) subsequently changed its name to African Eagle, meaning that for pedants, the precise age of the company is difficult to establish.

It's either 17 (dating from the establishment of Twigg), or 13 (dating from the incorporation of African Eagle proper).

But either way it's now clear that its life-span is nearing its natural completion. Mark is long gone, off to bigger and greater things in the Sudan. African Eagle still survives, but only just. It is now dying.

Last week it announced that it couldn't raise any money and was thus shutting down its local operation in Tanzania. Since this is where the company has its key asset, it's a pretty serious move.

Lest anyone think the directors are slashing operating costs to preserve money to pay themselves, the same announcement also says that senior directors will go, and in any case Trevor Moss is paid only around 60 per cent of what Mark was getting.

But with the best will in the world, cutting costs only matters if there's money coming in. And with African Eagle there isn't.

The market still values the company at around £2 million, on the basis that a trade buyer might come in for the asset, probably at a knock-down price.

But even allowing for that outcome, African Eagle's days as a miner now seem numbered. Which is sad, as it's been a popular favourite with punters for a long time.

But it's probably also good, as a junior miner that's been around for 13 years without ever having created any serious value for its shareholders has probably reached the end of its natural life-span anyway.

It won't be the last to fall by the wayside either. You can read all about the casualties - and the survivors - here every week on Minesite.

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