"Ntorya-2 has increased the size of the discovery and
de-risked additional prospectivity"
Shore Capital has raised its share price target for Aminex
plc (LON:AEX) following an assessment of the recent Ntorya-2 appraisal well
result.The broker says on a revised view on the Ruvuma project, which includes Ntorya, the shares are worth 6p/share against a 4p per share valuation previously.
Ntorya-2 has increased the size of the discovery and
de-risked additional prospectivity, it added.
Shore notes the shares have retreated from 7p share since
April but sees this as overdone.Concerns over the flow rate at Ntorya 2 are explained by a cautious approach taken by Aminex, the broker says, with the possibility of a well blow-out if preventative action had not been taken.
“Perhaps in contrast with some other views, we were
therefore very encouraged by the outcome from Ntorya-2.”
Sanguine about Tanzania
Shore is also reasonably sanguine about the state of
Tanzania, where a ban of gold concentrate exports has hit Acacia Mining and
sentiment about the country hard.
Aminex also has a stake in the producing Kiliwani gas field
in Tanzania and Shore understands that three months of invoices are currently
outstanding.
Reduced gas pressure at Kiliwani has prompted Shore to lower
its revenues estimates this year to US$9.4mln (US$11.4mln) with profits of
US$3.15mln forecast.
"Following last year’s equity fundraising exercise,
which introduced strategic investor Zubair Corporation of Oman, we continue to
see sufficient headroom for the Ntorya-3 appraisal well, due for spudding later
this year.
“With Aminex now profitable and remaining fully funded to
drill Ntorya-3, we believe that important catalysts to reverse the current
share price trend can be identified through the coming quarter.
“We expect these to potentially include confirmation of full
repayment of the Argo loan, an update on basin modelling and Ntorya-3 drilling
plans, and announcement of submission of the Ntorya field development plan.”
Source article proactiveinvestors