IGE - ein Elch in Afrika

Elkspotter haben IGE in Kenia ( Gold ), Burundi ( Vanadium ) und Angola (Diamanten ) gesichtet. Aber Geduld ist gefragt.

Analyse von Sundal Collier

International Gold Exploration
Sweden, Gold
IGE.OL (REUTERS) - http://www.ige.se – IGE NO (BLOOMBERG)
Share price: NOK 3.44 Market Cap (m): NOK 1,073
Target price: NOK 8.0 Daily traded shares, -3m (k): 5,306

Patience will pay off
Recommendation: BUY

IGE’s shares have been in a downward trend since the beginning of October 2006. The stock has reacted positively to good news, but has not managed to sustain this and fallen back shortly thereafter. We believe that there are several factors that will change this trend going forward, and recommend BUYING IGE now as we believe the company will enter into a very interesting period going forward, with both restructuring and several new concessions in high potential areas to be won.

· IGE has announced that it will organise its operations in three separate subsidiaries: IGE Nordic, IGE Diamonds and IGE Africa. Given this and the fact that IGE has also decided to develop its own concessions through exploration and into production, we believe that the company will continue to strengthen its management team by hiring executives with experience from building and operating mines.

· We believe that the three subsidiaries will be separately listed. This will increase the visibility in valuation in addition to having three more uniform investment profiles, and attract investors who are not interested in the diversified portfolio of projects, but would like a more pure play towards any of the three divisions.

· We believe that there are several very interesting new concessions in the pipeline, the most important includes:

We expect the kimberlite part of the first diamond concession (3,000sqkm in the Moxico province) in Angola to be ratified in the next Ministers’ meeting. Our contacts in Angola have said that this meeting could potentially take place on Wednesday or Friday this week. Be aware that these meetings have had a tendency to be cancelled at the last moment. IGE will be spending the next few months carrying out aeromagnetic surveys over this (and potentially more) concessions.

We expect IGE to be able to announce more diamond concessions in Angola shortly after the first concession is confirmed by the government. We believe that it is very likely that these potential concessions will be of the same size as IGE’s first concession (3,000sqkm). Our early estimates of the risk adjusted DCF indicate that each concession of 3,000sqkm could have a potential value of between NOK 3 and 7 NOK per share.

This week IGE has received visitors from Burundi’s government in Sweden. IGE has already received one gold and one vanadium concession in Burundi. The pre-feasibility study is ongoing and being developed by SRK Consulting. We expect IGE to receive at least one more concession in the country, and that could even happen this week as the Burundi officials are in Sweden. Burundi has several attractive concessions, including several large nickel resources with proven reserves between 29 and 46 million tonnes with a nickel grade around 1.4% (probably not 43-101 compliant). The largest resource is 180 million tonnes, which makes it one of the largest undeveloped nickel resources in the world. In comparison, Crew Mineral’s resource is 207 million tonnes with a nickel grade of 0.94%. There are also other interesting concessions in the country including more gold and also rare earth minerals (REE) to mention but a few.

Management has also focused on getting concessions that could yield cash flow within 6 to 12 months from acquisition/acceptance. This could be done during Q2.

On March 29 IGE announced that it updated its resource statement at Stekenjokk to be compliant with the 43-101 and JORC standard. Stekenjokk is a marginal Zinc and Copper field that has been produced by Boliden from 1976 to 1988. It was closed due to the low base metal prices at the time. In our DCF models we use a Copper price of 3,256 USD/tonne and Zinc of 1.678 USD/tonne from 2009, which is the first year that IGE could potentially secure its metal prices for future production. With these price assumptions and assuming investment costs of SEK 550m, 700,000 tonnes of yearly ore production, 10 year mine life, cash cost of SEK 350 per tonne, 100% debt financing at 8% interest costs and a discount rate of 12%, we get a zero NPV for this project. The NPV increases to NOK 2.8 per share if, on the other hand, we use today’s spot prices for Copper and Zinc, which are 7,807 and 3,710 respectively, so this project could turn out to be very interesting if we see continued strong base metal long-term.

IGE received a vanadium concession from Burundi in November last year. We have valued the concession at NOK 1.4 per share. See IGE presentation at http://www.abgsc.com dated November 22, 2006, for more information.

IGE has received verbal confirmation that it has received exclusivity to an area of 100,000sqkm(!) in the Moxico region which is in south west in Angola. External consultants have so far identified more than 200 potential kimberlite anomalies in this area, which equates to the size of one-third of Norway. We are however waiting for a written agreement with Endiama before we give this agreement any value.

Insiders have increased their stake in the company lately:
Ulrik Jansson (Chairman) bought 1.5 million shares on December 11, 2006 at an average price of 4.315 per share. His direct interest in IGE is 14.865 million shares (4.8%).

ANGOLA - LACAGE KIMBERLITELICENSE FINALLY APPROVED

International Gold Exploration IGE AB (IGE)
announces that the first licence for primary
diamonddeposits earlier signed by IGE and ENDIAMA -
the state owned diamond company of Angola - has
officially been ratified and granted by the
council of ministers of the Angolan government.

IGE has a 43 % ownership of the contract for
primary diamond deposits and is responsible for
operations and financing which includes management
and production. ENDIAMA has a 51 % ownership and
two local Angolan companies have the remaining
parts.

The Lacage concession area, which covers 3 000
km2, is located in east-central Angola in the western
part of the province of Moxico.

Regional geological data indicate that the Lacage
concession area is located within geologically
potential ground to host kimberlites. Original
reports from early 1970`s of diamond exploration
surveys by Diamang and Condiama (Portuguese -
Angolan colonial companies), show that alluvial
diamonds and diamond indicator minerals have been
retrieved in streams draining the concession area
both to the east and northwest. Several positive
finds of diamonds are noted in these reports in
alluvial beds of drainage systems belonging to the
upper Luio River and the Lungué-Bungo River, both
of which have their headwaters within the
concession area.

The reported early findings of diamonds in the
large sediment beds of these rivers and streams are
indicating the presence of alluvial diamond
deposits and locally associated primary kimberlite
sources within the Lacage concession area. The
potential of locally located diamond deposits in
the Lacage area is further strengthened in recent
times by reported diamond finds by artisanal
miners along some of these rivers. Finds of some
extraordinary large size diamonds from the region
have been reported.

Advanced satellite picture interpretations
indicate over 90 geological signatures that potentially
could be kimberlites. Airborne geophysical surveys will
start in May 2007 using the airport at Luena as the
base of operations.

Wenn Du gegen 9:30 verkauft hast, wärens so etwa 20% in zwei Wochen gewesen.

Fürn Quickie nicht schlecht. Aber der Elch schafft hoffentlich noch mehr.

Uran Prospekte in Schweden haben sie jetzt auch, dem Zeitgeist folgend.

CAR 16.05.07.

International Gold Exploration (IGE) yesterday announced the results from the first drill hole in a drilling campaign of a total of four holes at the Solvik license in Dalsland, Sweden. IGE holds 50%, Archelon Mineral AB the remaining 50%.

The Solvik area has been known to host sulphide-rich boulders (large stones) since the 1920s. There are also closed down silver and gold mines located in the proximity of Solvik.1990-91, boulder search, geological mapping, ditching and geophysical testing was carried out but failed to identify the source for the mineralized boulders.

However, later on boulders containing grades of up to 73 g/t of gold were identified which renewed the interest for the area. IGE has compiled all the available information in order to identify the source of these highly encouraging encounters. Initially this failed but the new chief geologist, Benny Mattsson, approached the area with a new perspective and suggested a drilling campaign of 4 holes in the present area.

The new approach appears to have been correct, the first drill hole encountered 20m of mineralization @ 2,6 g/t, of which 6m @ 6 g/t. The highest grade encountered was 9,5 g/t. IGE now believes that it is the main mineralization that has been encountered, i.e. the source of the highly mineralized boulders.

Given the large and rich boulders and the 20m interception, IGE’s geologists are rather certain that the mineralization is of significant size, the question that remains is if the grades will be economical, particular if the mineralization continues to the depth and requires underground mining. The current grades are encouraging though.

Given the success of the first hole, IGE has now decided to intensify the exploration work and the drill rig will continue to drill in the area and we expect further drilling results in 5-6 weeks.

The exploration is at a very early stage and thus it is hard to estimate a value of the project. It could be argued though that if the grades are economical, the deposit would likely be in the range of 500,000-1,000,000oz if it should be of interest. Applying a value of $100/oz implies a value of NOK 150-300m (IGE holds 50%) or 0,44-0,88/share. Applying a probability of success of 20%, renders a value of 0,09-0,18/share.

We reiterate our buy-recommendation with a target of NOK 8,50.

Goldplat form JV to develop Kenyan gold mine
http://www.mineweb.net/mineweb…ge674?oid=22155&sn=Detail

Wenn ich das richtig verstehe, bringt IGE eines (Lolgorien) ihrer 8 Lizenzgebiete in Kenia in das JV ein. Der zugrunde gelegte Wert des Gebiets beträgt bloße 800.000 $, also
unter 5 Mio NOK. In der CAR-Analyse vom April letzten Jahres werden die 8 Konzessionen in Kenia mit über 300 Mio NOK veranschlagt. Da scheint doch eine gewisse Diskrepanz zu sein.