Interesting to note the recent share price recovery from Bezant Resources PLC (LON:BZT), despite the potentially dilutionary effect of a recent £350,000 raising at 0.14p. The current price is steady at above 0.19p, and that in itself is roughly triple the price the shares were trading at when they hit new lows in the summer. Admittedly, there’s some way to go before the heights of yesteryear are regained, but as the market adage has it, the trend is your friend - so what’s behind the recent uptick?
The answer is that Bezant is currently a fair way into what chief executive Laurence Read calls “an important transitioning period.”
Towards the end of last year the company unloaded its interest in a Colombian platinum and gold project, realising US$500,000 in cash and releasing it from obligation on an asset that was struggling to find support in a market that tended to look more favourably on other jurisdictions.
More recently, and more significantly, it’s also parted with 80% of the sizeable Mankayan copper and gold project in the Philippines, in exchange for sizeable funding commitments and the potential of a US$10mln share stake in a Singapore-listed company that will come into its own after the completion of an already-agreed reverse takeover.
Those two transactions free up Bezant considerably, and the lightening effect has been clear for all to see, and in particular following the disposal of the majority stake in Mankayan.
It turns out that the market viewed Mankayan more of a millstone than an asset, on account of the its size and depth, and the challenges for a small London-based company of making a big asset work in the far-away Philippines. It’s all very well having the resource, but if the market doesn’t believe you’ve got the heft to get it into production, the discounts can be very severe.
This way, Bezant still has a very sizeable stake in the upside at Mankayan, but is now free to focus on undertakings more suited to it, specifically, the development of copper and base metals assets in Zambia.
The company first took this turn in April 2019 when it announced the acquisition of the Buffalo project 300 kilometres north west of Lusaka.
Seasoned investors will note that Bezant’s chairman is Colin Bird, a man with a considerable history of value creation in Zambia, the highlight of which was the US$260mln sale of Kiwara to First Quantum (LON:FQM) back in 2009.
Zambia is a country where the Bezant team feel comfortable, and where they feel they can get things done.
“There are rich pickings still to be had in Zambia, I would argue,” says Read. And indeed, after more than a century as one of the leading copper producing countries in the world, the mining industry remains as enamoured of Zambia as ever.
“They have good infrastructure by and large,” says Read.
“It’s stable, and generally they’ve managed their path pretty well.” What’s more, it’s prospective.
“One of the project types we are looking at is the classic iron-oxide copper-gold formation,” adds Read.
“But there are a lot of different project types in Zambia, which just need the right exploration approach to determine economic viability as feasible development projects.”
To kick things off, Buffalo is likely to be the subject of a limited drilling campaign next year.
But watch out for wider developments: Bezant is also on the lookout for more prospective deals, although Read at the moment is slightly reticent about what form these might take.
“We’re still finalising our strategy,” he says.
The transition phase is now well advanced, but it isn’t quite over yet, it seems.