Managenet meeting in StockholmBelow AFAs new presentation used by CEO Mr Leveille at yesterdays investor meeting in Stockholm. First a couple of items mentioned at the meeting but not highlighted in this the most recent corporate presentation:
Indications, however at this point not officially confirmed, is that Diamond average price now has reached US$ 450. This needs to be verified by official sources but this seems to be the price right now. This then , if this is true, of course some implications on calculations on e.g. slide 20 and 21
Clearly and as supply is starting to fade at the same time demand for diamonds ww is growing there will be a quite large supply gap and that the future only can be expected to increase. Many diamond mines already are showing clear signs of depletion. A situation that will escalate as less and less new production is planned to go in to production.
AFA is in the process of forming an entirely new company listed on the stock exchange together with a partner in order to try to bring out the value of the Haib mine. This company then would only focus on developing this copper mine and this not only makes it possible for AFAS to bring and make visible out some more value but in addition then focus on their marine exploration business. Mr Leveille expects the value of this new company to be given e.g. in the form of new issued shares to existing AFA shareholders and expected value then it was said could be in the C
.5 range per share.
The work and recent drillings conducted at Hibe indicates this mine will be possible to mine with a profit. More work needs to be done but so far experts have decided to develop this opportunity further as there are clear signs of more to be explored.
First sampling of EPL 3403 was made in order to be able to take the decision if to purchase this lease or not. Indication from this sampling was positive enough in order to take the decision to continue.
Next phase is to make a thorough “phased program that will include geophysics, vibracoring and samples of 5 square meters each, in order to develop a mineable resource” and then if all goes as planned start the sampling in September. With this technology analyzing the deposit prior to sampling it AFA will gain excellent knowledge of where to conduct the sampling. This is knowledge not available in the first reconnaicaicanse sampling.
At this point however AFA management believes there will be enough to mine in the deposit so that a trial cash generating mining project will be initiated early next year possibly even earlier. “on the fly” results from the next sampling will confirm if this is the case or not. If this will be confirmed during the fall then the only remaining questions related to the trial mining is when to start and how much there will be to mine e.g. scope of trial mining. IF a larger project then the trial mining gradually will be phased out to real production.
The northern part of EPL 3403 geologically is very similar to Namdebts great Atlantic 1 find but quite extensive work now is needed in that area in order to find out more about its reap potential. As all stones found so far has been in the southern region of the deposit the strategy now it to develop this area and to start cash generating trial mining asap in order to give opportunity to later on further develop the northern region. Also quite interesting is that IMDH has quite many concessions and e.g. directly east of EPL 3403 is one area that now has gotten the interest of AFAs geologists. AFA believe they within a very short while possibly already by June will be able to also include this new area of great interest in to the next coming work. This new area of interest is situated near east of Area 1. In addition to this area IMDH also has more concessions e.g. surrounding Atlantic 1on the east so if this first area would come in to fruition as outlined by Mr Leveille then this cooperation between AFA and IMDH for sure would become quite interesting adding more opportunities further down the road.
Company also has the intention to further work at Block J. The analysis regarding e.g. where to find stones etc has shown to be correct only issue at Block J is the size of the stones making it at this point of time not feasible to mine. Note worthy however is that AFA so far with its new IMDH vessel never has sampled more than 8 meters. Thus there might be more potential further down and deeper not only at Block J but at all other sites as well. Apparently at e.g. Atlantic 1 there are areas with proven availability of diamond on three separate layers deeper down in the sediment.
Combined with the vibracoring technology and give the state of the art new vessel the of shore diamond industry virtually is transforming as we speak. Not only will there be greater opportunities where to look in advance and then not only on the first layers of the sediment but significantly deeper down and then in addition to use equipment to physically also reach these levels with the IMDH exploration vessel. Combine this then with the fact De Beers has been restricted to expand their off shore business in Namibia and the fact AFA has now has real access to this necessary exploration as well as mining equipment, local political presence as well a contacts experience and knowledge of off shore mining as well as access to possible new concessions this surely puts them in a sweet spot going forward. Hopefully then this will imply the time of delays and waiting now is over. That in it self may indicate a better valuation of this company going forward as the market gets accustomed to more and more progress and real action going forward.
Clearly next coming 6 months will be quite interesting for this company. If all goes well this then could imply AFA not only is an exploration but in fact also a cash generating production company within that very same timeframe. Add to this the new and planned listing of a separate Haib related company focusing on developing that opportunity, more concession nearby to explore and well as all access no expertise and equipment necessary the only thing missing right now are diamonds of the right size and concentration. Just a matter of time..?
On a last note one of South Africa’s most famous billionaires entrepreneur has chosen to invest in this project a while ago thus creating south African interest in to this project as well as giving AFA access to quite an interesting network ww of possible investors. More about this to come..?
https://www.afri-can.com/files/ssparagraph/f370671366/presentation_update_may_16_2011_mode_de_compatibilite.pdf