A number of analysts featured African Aura Mining (LON:AAAM, TSX-V:AUR) among their published research today after it released new drill results from the Nkout iron project in Cameroon.
African Aura revealed new drilling results that will boost the pending maiden resource estimate for the Nkout project, which is due in February.
This morning’s drill results confirmed an east-to-west trending and concordant banded iron formation (BIF).
The result highlights include intersects of 178 and 100 metres of magnetite BIF grading 35.1 and 38.1 percent iron respectively. There was also a 92.5 metre intersect of haematite mineralisation (dominant cap) with 46.7 percent iron.
Charles Kernot, mining analyst at Evolution Securities, described the drill results as ‘impressive’, meanwhile he reiterated his ‘buy’ rating and put his price target under review to take into account recent developments.
“These drill results demonstrate the considerable iron potential at Nkout and bode well for the forthcoming maiden resource statement, which will give us a modelled tonnage and grade,” Kernot said in a note to clients.
“Last year’s drilling programme has focused on a 3 kilometre zone within a 20 kilometre magnetic strike, so there is significant additional exploration potential at this project.”
Meanwhile Fairfax Securities analyst John Meyer also looked at the stock. He emphasised that Nkout is becoming increasingly important for African Aura.
“These latest drilling results are further positive news flow to come from Nkout that could evolve into being the company’s flagship asset,” Meyer said in a note to clients.
He adds: “although there is considerable value to be had from the Putu iron ore project in JV with Severstal, and the company’s gold portfolio including the New Liberty gold project in Liberia.
“Putu could well hold strategic value as a rail line could be developed to service Sundance’s Mbalam project which would pass straight through Nkout’s tenement package.
“We look forward to further results across these various projects and how the split of the company into separate gold and iron ore entities will evolve, which we expect would lead to a re-rating of the asset base.”
African Aura is a diversified mineral resource junior focused on two main areas, iron ore and gold. The firm has a long held the belief that the market is not appreciating the value held in each of the businesses.
It is therefore expected to split the company into two separate entities. The gold business will become a separate company called Aureus Mining and the iron ore operation will be retained by African Aura.