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  1. Ripsnorter

    934 Posts.


    Redback Mining is another Australian with its eyes on an AIM listing and the reasoning is crystal clear. If its market value per resource ounce of gold is compared with that if Moydow International, the Dublin based explorer which operates close by in Ghana, there is no contest. And the Irish company is listed in Canada where ratings tend to be even lower than Australia, so it is clearly down to the fact that it operates in Africa. Investors Down Under just do not seem to like that.

    Red Back has a lot going for it. There was a slight hold-up over the permissions required for mining on forestry land during the recent election, but this seems to be sorted out on the basis of a recommendation that the existing guidelines should be accepted. This puts it back to the Forestry Commission and away from politicians and the formalities should be completed by the end of January. Not that Ross Ashton, the boss of Red Back has a problem with the politicians. In fact he points out that the election which brought in deposed President Rawlings proves that Ghana is a true democracy, unlike a number of its neighbours.

    In 2000 the company saw its resource double to 1,380,000 ozs at a grade of 2.2 g/t gold at the Chirano gold project which is just down the road from the 4.5 million oz deposit at Bibiani owned by Ashanti Goldfields. It is on the same gold belt which has been very underexplored and this is true also of Red Back's licence area which is steadily being expanded. At this stage, however , the company is concerned to get at least 750,000 ozs of resource converted to reserve and get its open pits optimised as part of the pre-feasibility.

    Thanks to a funding last October it has funds to carry this out and a fair bit of the money came from London through the corporate mining boutique of Loeb Aron. African Lion Ltd, a specialist African mining fund also took another dose and one of its directors, Terry Ward, has joined the Red Back board.

    While it is still carrying out pre-feasibility work the company will also be continuing with exploration. Three new targets have been detected by IP surveys and the results from follow-up drilling should be released soon.The fascinating thing about Red Back Mining is that it offers an each way bet. The reserves at Bibiani are starting to run low and the most logical outcome would be for its plant to maintain maximum throughput by treating ore from the pits Red Back is proposing to develop.

    Red Back, however, is a shade sceptical of Ashanti and is keeping its options open with a stand-alone plant capable of treating 1.5 mtpa to produce 115,000 ozs a year for 6.5 years in its pre-feasibility . The Bibiani option has immense attractions in terms of capital requirements, but Red Back retains total control by going alone. The company has already attracted a following in London so an AIM listing is a logical progression.

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