These ASX small caps are set to fly after law changes in the Philippines and Angola
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The Philippines and Angola have made legislative moves that will be a big benefit to the handful of Aussie miners active in those countries.
The Philippines government has lifted its ban on exploration licences and has completed its audit of all the mining operations in the country.
This is the second new mining policy measure in recent months that has been adopted by the country’s environment and natural resources authorities.
The Philippines last month lifted a moratorium on government approvals for small-scale mining projects.
Activist President Rodrigo Duterte declared war on the mining sector in late 2016, forcing several companies to suspend operations.
Red 5 (ASX:RED), which has a market cap of about $86 million, was forced to halt work at its Siana gold mine in April 2017, which cost the company close to $100 million.
However, the company told investors this week it has now been granted approval to build a tailings storage facility at the project.
Tailings, also called mine dumps, are the materials left over after processing ore to separate valuable material from uneconomic material.
Investors welcomed the news, with shares gaining just over 9 per cent in the past two days to trade at around 7.2c.
Red 5 shares have jumped nearly 112 per cent over the past year from a low of 3.4c.
Here’s a list of ASX stocks with projects in the Philippines, courtesy of leading ASX data provider MakCorp:
|ASX code||Company||Focus||Market Cap|
|KMT||Kopore Metals||Copper, gold||$12.2m|
|MML||Medusa Mining||Gold, zinc, copper, silver||$97.7m|
|RED||Red 5||Gold, silver, copper||$81.9m|
|RTG||RTG Mining||Gold, copper, iron, silver,||$47.9m|
Another ASX-listed explorer with projects in the Philippines, RTG Mining (ASX:RTG), said the lifting of the ban on exploration was a “welcome and positive development for the industry”.
The company’s projects in the Philippines include the Mabilo copper, gold and magnetite project, which is currently the subject of a legal dispute.
RTG shares advanced as much as 33 per cent yesterday to an intra-day high of 14c before edging back to 11.5c – valuing it at about $46 million.
The Philippines is the fifth most mineralised country in the world, with the third largest deposits of gold, fourth for copper, fifth for nickel and sixth for chromite, according to the Australian Trade and Investment Commission (Austrade).
The southeast Asian country has largely untapped resources worth around $1.32 trillion and mining tenements cover just under 3 per cent of the 30 million hectares of land.
Austrade says there are untapped coal resources amounting to about 2.4 million tonnes.
There are just 37 operating mines – six gold mines, three copper mines and 28 nickel mines – which in the past two years have been the subject of an intensive compliance audit.
The $82 million Medusa Mining (ASX:MML), meanwhile, has an already producing gold mine in the Philippines.
Medusa reported last week that it beat its higher production target for the 2018 financial year, producing 95,705 ounces of gold from its Co-O mine.
Shares briefly climbed 2.5 per cent on Thursday to an intra-day high of 40.5c before slipping to 38.5c. Medusa is, however, trading up 24.2 per cent on where it was this time last year.
Mount Ridley (ASX:MRD) had been planning to buy a project close to Medusa’s Co-O mine via the acquisition of Singapore’s Prometheus Developments.
But both parties decided it would be better for Prometheus to undertake an initial public offer and list on the ASX instead.
Prometheus owns the rights to the high-grade Dilwalwal gold project.
Mount Ridley said back in May that Prometheus would pursue an IPO in calendar 2018.
Angola ‘open for business’
Looking to southern Africa now and Angola is also becoming more mining friendly – especially for diamond players.
Up until now Angola has had in place restrictive legislation over diamond operations including not allowing foreign investors to hold a majority stake and a requirement that all diamonds must be sold through a central state-owned government agency.
On top of that, the process for repatriating revenues earned in Angola back to Australia has been somewhat long and arduous.
However, following the election of a new government in August last year, the country is now seeking more foreign investment in its natural resources, including diamonds.
Angolan President Joao Lourenco has now implemented a new diamond marketing policy.
There are just 13 diamond companies listed on the ASX and the majority of them have projects in Australia. Lucapa Diamond Company (ASX:LOM) is the only ASX-listed company with operations in Angola.
Diamonds not sold at international commercial tender in Antwerp don’t fetch the best price, according to Lucapa’s head of investor relations Mark Drummond.
Lucapa’s diamonds already bring in around 15 times the global average, Mr Drummond told Stockhead last week.
But the miner had been hanging on to about 2755 carats of diamonds, including large and high-value “specials”, in the hopes it would be able to sell them in Antwerp.
Lucapa boss Stephen Wetherall said the new diamond marketing legislation represented a significant and positive step for the Angolan diamond sector.
“The fact that President Lourenco and his government have enacted the new diamond marketing laws so expeditiously is further proof that the Angolan diamond sector is open for business,” he said.
Stockhead is proud to use MakCorp as a provider of great value, accurate and reliable data on ASX-listed mining stocks. For more information head to MakCorp’s website.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.