|Thu, 18 Dec 2014|
Posted: Tue, 01 Feb 2005
[miningmx.com] -- ONE outstanding feature of Diamond Core Resources, formerly Mazal Mining & Exploration, is that it’s the only South African mining exploration firm digging in South Africa. Another remarkable feature is that roughly 50% of the firm’s shareholding is institutional. One doesn’t normally see that level of support for a junior miner, particularly for an entity that nearly slipped into liquidation about two years ago.Part of the reason that Diamond Core is back on the map must be the faith placed in management and its advisers. Some good names have put their weight – and reputations – behind this venture, including Charles Booth and Richard Simpson, of RMB Asset Management; QuestCo, a corporate advisory team led by Peter North, and Theo Botoulas, a mining engineer first asked to recover Mazal’s Paardeberg East mine, a property in the Northern Cape. Botoulas is MD of Diamond Core. RMB’s Simpson says the company is a long-shot but could deliver value as demonstrated by other ventures behind which RMB Asset Management has put its weight including Kroondal Platinum, a junior mining firm that was bought by the UK-listed Aquarius Platinum. Part of the attraction was the operational track-record of Botoulas, Simpson says. “I’ve followed his career and have been impressed,” he adds. Mazal Mining, listed in March 1999, developed the sort of reputation that has given South Africa’s junior sector a bad name. By October 2002, the company was in dire financial straits and its listing on the JSE was suspended. One of its existing shareholders, Shalom Nachom brought in Botoulas in an attempt to recover his substantial investment in the company. Nachom had bought rough diamonds from Mazal’s Paardeberg East property, a marginal mine that nonetheless provided a mix that Nachom quite liked. Though Nachom’s primary motive was to retain access to the mine, Botoulas wanted to recover the company as well. Consequently, Mazal Mining was refinanced, renamed and replenished with a number of diamond industry worthies, including former Ocean Diamond Mining CEO André Louw, now chairman of the Diamond Core board. In addition to the personalities, the rehabilitation of an old Mazal project – Skeyfontein, previously explored by De Beers for its diamond potential – has given Diamond Core some blue sky. Paardeberg East may make money, but Skeyfontein could be the company’s future, says Questco director James Allan. Incidentally, the Skeyfontein farm – located near Finsch in the Northern Cape – is a well-known and once profitable De Beers mine. However, De Beers lost the right to explore the property when the Skeyfontein community recovered land from a local farmer in SA’s first successful land restitution claim. Botoulas makes no bones about the task at hand. “We’re fighting the credibility gap at the moment. We don’t know what the end game will be but we hope to find and mine more diamonds.” The basic geology is promising, he adds. Diamond Core is a pennystock of note, trading at between 5c and 14c/share. But if it can discover diamonds, the market will do the rest, owing to a growing supply deficit of rough diamonds. RMB Asset Management, a well-known backer of junior mining in SA, owns roughly 19% of the company after injecting R10m in seed capital. The identity of the other shareholders remains confidential following a R6,8m capital-raising exercise in October 2004. Allan says the company’s strategy is, unsurprisingly, to bring its projects into operation and concurrently to identify suitable assets for acquisition. There are other properties the company hopes to consolidate into the group’s exploration portfolio. Earlier this week, the company announced terms to merge with Samadi Resources, a British-controlled junior miner of which Nachom, Botoulas and David Levithan (a nonexecutive Diamond Core director) are directors, into Diamond Core. The upshot would be that Diamond Core would add alluvial diamond prospects to its portfolio, because Samadi Resources is trawling the upper reaches of the Orange River for them. Simpson comments this is a positive development. “Adding the prospect of alluvial diamonds means there’s a much higher likelihood the company will one day find and mine diamonds,” he says.