Bezant Brings Mankayan's Million Tonnes Of Copper And Four Million Ounces Of Gold To The Negotiating Table
By Alastair Ford
minesite.com
Investors in Bezant Resources are involved in a bit of a waiting game at the moment, as the company’s manoeuvres for a development deal for its huge copper-gold project in the Philippines. Following a successful drill campaign, Bezant was able to deliver the hoped-for upgrade to the historic resource numbers on its Mankayan deposit back in July. This showed Mankayan to contain 1.1 million tonnes of contained copper in the indicated category, with a further 200,000 tonnes in the inferred category. There was also 4.3 million ounces of gold, most of which is in the indicated category too. That’s plenty enough copper and gold to go to work on, especially in a pricing environment which has seen copper virtually double in price over the last six months, from around US$1.50 per pound to just shy of US$3.00, and in which gold has rarely strayed below a very attractive US$875 an ounce.
Not surprisingly the market liked the news of the resource upgrade when it was delivered, and pushed up Bezant’s shares by nearly a third to over 29p. The shares have slipped back slightly since then, to 25p, for no better reason than that the freshness of the good news has worn off, and because August is traditionally a light month for trading. At that price Bezant is capitalized at just over £11 million, a valuation that compares well enough to Bezant’s peers on the Aim market, but rather belies any hope that the company will on its own raise the likely US$150 million it’s going to take to get a mine built at Mankayan. Hence Bezant’s investors are now playing a waiting game while their directors manoeuvre Mankayan towards a development deal with a larger partner.
A million tonnes of copper and four million ounces of gold is not to be sniffed at. And indeed there are several mining companies and other interests in Bezant’s area cutting deals. Mankayan is located in what’s called the Mankayan-Lepanto district of the Philippines, a major copper porphyry belt that lies around 240 kilometres north of Manila, and which has been the subject of the attentions of miners for centuries. One of the most famous of Philippine mines, the Lepanto mine, takes its name from the name of Bezant’s district, and indeed the same Lepanto mine is not a stone’s throw away from Bezant’s Mankayan project. The two projects share a boundary, and the key mineralized areas at Mankayan are a mere six kilometers away from the Lepanto mine.
All of which means that any acquisitive company taking a look at Lepanto and wondering where the upside is will do a lot worse than trot across the tenement boundary for a word or two with Bezant’s representatives. And there is such a company. It’s called First Pacific, it’s based in Hong Kong, and it’s currently conducting due diligence on the Lepanto mine having confirmed that it was interested in making an offer back in July.
This is a development that’s hardly come as a surprise to Bezant’s technical director Bernard Olivier. He’s talked several times in the past of how potential corporate activity at Lepanto might benefit Bezant, and as far as First Pacific is concerned, as the waiting game goes on Bezant shareholders must surely feel heartened when he says, “we know them well”. But it’s by no means a racing certainty that Bezant will jump into bed with First Pacific. The crucial element of First Pacific’s move on Lepanto as far as Bezant is concerned is that interest in the district is hotting up. The way forward from Mankayan is quite clear to Bernard Olivier. “The next step is really finding the right JV partner”, he says. But it needn’t be First Pacific. “We’re also talking to other, larger groups”, continues Bernard.
One ace that Bezant holds is that it’s got plenty of cash in the bank. With work on the ground now all but complete, with ticks in what Bernard calls “all the potential boxes that a partner would ask for”, and with £1.3 million in the bank, the company, and its investors can afford to wait - to wait for First Pacific to finish its due diligence on Lepanto and decide if it wants to add Mankayan to its portfolio at the same time, or for another of Bernard’s “interested parties” to come in with an offer. There’s not much chance that Bezant would try to go it alone – not with a US$150 cash requirement. Bernard refers to such an outcome as “a very slim possibility”. But with minimal cash burn, the company is unlikely to be railroaded into making a deal on anything but the terms it wants. That may entail some more waiting for shareholders. But, with the price of over a million tonnes of copper and four million ounces of gold at stake, the wait will probably be worth it. |
