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African Battery Metals: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Expansion into new metals, new countries helping African Battery Metals focus on its changed nomenclature

ABM is also actively evaluating additional projects which it believes have potential to significantly advance the company's stated strategy of focusing on battery materials
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INVESTMENT OVERVIEW: ABM The Big Picture
Previously known as Sula Iron & Gold PLC – as indicated by that name – ABM was focused on iron and gold exploration at Ferensola in Sierra Leone

Having changed its name at the start of the year to reflect a refocusing, African Battery Metals PLC (LON:ABM) has set about making a series of acquisitions taking it into new countries and new metals to fulfil its nomenclature.

Previously known as Sula Iron & Gold PLC – as indicated by that name – ABM was focused on iron and gold exploration at Ferensola in Sierra Leone.

READ: African Battery Metals to discontinue activities in Sierra Leone after review of assets

But the AIM-listed group has now decided to discontinue its activities in Sierra Leone after a review of its assets following the acquisition of two new nickel and cobalt projects in Cameroon and Cote d'Ivoire, which complement the prospective cobalt licences ABM holds in the Democratic Republic of Congo.

ABM is also actively evaluating additional projects which it believes have potential to significantly advance the company's stated strategy.

The firm said its strategy of rapidly building the company both organically and through acquisition has been endorsed by new shareholders led by highly successful international resource entrepreneurs, including Stephen Dattels and Ian Stalker.

Announcing the withdrawal from Sierra Leone – which is expected to see a local liquidator appointed to manage the process – ABM’s CEO Roger Murphy, said: " We believe that in order to maximise shareholder value we need to focus resources on our core strategy.

“We have a platform from which to grow, both through the development of our current portfolio and by securing additional highly value accretive acquisitions and in the process deliver a leading battery metals-focussed resource company."

Attractive long-term market fundamentals for battery metals

ABM believes that there are attractive long-term market fundamentals for battery metals, hence its move at the start of August to acquire stakes in two private companies - Cobalt Blue Holdings Inc (CBH) and Regent Resources Interests Corp (RRIC).

CBH has four prospecting licences in Cameroon, while RRIC has the right to acquire 70% of the Lizetta II cobalt, chrome and nickel project in Cote d'Ivoire.

Murphy told Proactive’s Andrew Scott at the time that the deals will help diversify ABM’s geopolitical and commodity exposure.

WATCH: African Battery Metals picks up nickel assets as it diversifies country risk

The considerations for the acquisitions were satisfied by the issue of ABM shares to both companies and at the same time the firm raised £200,000 via a placing of new shares to provide additional capital to support the company’s portfolio development and its growth

Under the placing some 6.6mln ABM shares were issued at 3p per share, a price which was adjusted for a subsequent capital reorganisation – designed to attract new institutional investors and increase market liquidity by reducing volatility - which reduced the number of shares in issue by a factor of 100.

ABM shares currently trade at 3.25p, just above that placing price as investors await further news on the refocusing.

DRC prospects

ABM announced in June that it had completed two auger programmes at its 53 square kilometre Kisinka permit in the Katanga Province of the Democratic Republic of Congo.

The programmes collected soil samples along lines across the seven-to-eight kilometre length of the licence, which is highly prospective for cobalt and copper, with assay results still to be announced.

The initial work at Kisinka - which is about 40 kilometres east of the city of Lubumbashi – is to be followed up by a licence-wide sampling programme including geophysics and soil sampling to test for further anomalies in what is recognised as a highly prospective mineralised district, with seven producing cobalt/copper mines already operating within 30km of the Licence.

ABM also has a licence at Sakania licence, which is over 200km to the south-east of Lubumbashi and further from the traditional cobalt copper mining areas of Katanga within the DRC. 

The group said the area was identified because it is currently being targeted by artisanal miners who very frequently provide the first evidence of mineralisation and represents “a low-cost option to be a first mover in a new prospective area”.

Financials steady

In terms of financial results, in June the newly rebooted company reported a £0.79mln loss for the six months to March 31, almost unchanged on the £0.78mln loss reported a year earlier.

At the end of March, ABM had £6.09mln of net assets including £601,000 of cash and equivalents.

Such losses are likely to continue until the new prospects start to produce results, but with ABM’s underlying asset strength and the significant potential for battery materials as the electric car revolution gains pace, the future could hold much excitement for the group.    

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