Investment Case

The Group has acquired a valuable portfolio of exploration and mining assets over many years. It has two significant income-producing gold and nickel operations with revenues in excess of $120m.

MULTI-COMMODITY EXPOSURE

  • The Group offers exposure to precious and base metals including nickel, gold, copper and diamonds.
  • BNC is the only integrated nickel mine, smelter and refinery operation in Africa.
  • Freda Rebecca is the largest gold producer in Zimbabwe with a production target of 70,000 — 90,000 oz per annum
  • Zani-Kodo gold exploration licenses in DRC are in highly prospective greenstone belts, in a region known to host world-class gold deposits
  • Highly prospective copper exploration in DRC with 38% free-carried interest with JV partner Hailiang, the largest copper tube manufacturer in the world
  • SEMHKAT is a separate, wholly owned copper exploration licence in DRC
  • Multi-diamonds interest:
    • South Africa: 74% interest at Klipspringer kimberlite mine
    • Angola: 18% free-carried interest in Camafuca — the largest known undeveloped diamond-bearing kimberlite complex
    • DRC: 20% stake in MIBA (Société Minière de Bakwanga)

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LARGEST GOLD ASSET UNEXPLOITED

  • The Group holds an 80% interest the Zani-Kodo project. It comprises four licences covering 1,605km² in the highly prospective Ituri district in the north-east DRC, in the same Archaean greenstone belt that hosts the giant Kibali project (22Moz) and the Mongbwalu Project (5Moz)
  • Zani-Kodo project combined JORC-compliant gold resource currently stands at 2.97Moz at 2.43g/t (based on a cut-off grade of 0.5g/t).
  • Only 9 km² drilled, further drilling programme planned to increase overall resource, has the potential to be >10Moz resource 


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SIGNIFICANTLY UNDERVALUED ASSETS

  • Our market cap has fluctuated between £20m and £35m throughout 2016 and 2017. However, the Group's NAV is in excess £200m (FY2016). This valuation is without unlocking its largest gold asset in Zani–Kodo.
  • BNC is quoted on ZSE as having a market cap of $75m in 2014 — Group’s interest is 74.3%
  • Investment in BNC’s smelter is in excess of $20m to date
  • Freda Rebecca's NAV is £75m — Group’s interest is 85%
  • Over £40m invested in gold licences in Zani-Kodo, with a JORC-compliant gold resource currently stands at 2.97Moz at 2.43g/t (cut-off grade of 0.5g/t). Group’s interest is 80%.
  • Katanga Copper JV with Hailiang — 38% free-carried interest. SEMHKAT Copper — 100% wholly owned by Asa Resource. Combined valued of copper assets — £29m
  • Diamond interests carried at nil value

(1) MARKET CAP @ 16 August 2017: £32,540,000
(2) NET ASSET VALUE @ FINANCIAL YEAR END 31 MARCH 2016

COSTS UNDER CONTROL

  • Group cost structure overhauled with corporate overheads at a historical low below
  • AISC C3 costs for nickel-in-concentrate (at Trojan) target of $5,000/t — $6,000/t 
  • AISC C3 costs target for gold circa $1,000/oz as Freda Rebecca ramps up production
    to 70,000oz — 90,000oz over the medium term

 

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