THE Carvill family may have diluted its stake in Kenmare Resources after last week's £2.74 million sterling private placing, but they still control a useful 10 per cent.
Shareholders at this week's a.g.m. heard an upbeat Michael Carvill outline the company's current prospects in Mozambique, aided by a slide show showing the prospects and their location.
The inferred resource at its Niassa gold prospect is now 300,000 ounces, and remains still open at depth and on both sides. But at least 500,000 ounces are needed to make any sort of mine viable, while double that amount would make it what Carvill described as a "good sized" mine.
Gold is sexy and will always whet shareholders' appetites but Kenmare's other prospects in Mozambique also warrant attention.
The recently announced joint venture with BHP for the Congolone mineral sand project, for example, is an interesting deal which could be rather fruitful for Kenmare.
Under the agreement BHP will earn a 75 per cent interest after spending $24 million on developing the project. Kenmare can either retain its' stake by funding any further development costs on a pro rate basis, or dilute its interest.
According to Carvill, the reserve potential of the Congolone ilmenite, which is used in the plastics and paint industries, is five billion Australian dollars (£2.47 billion) and based on a worst case scenario of the projected costs, almost half of this sum would be divided between paying taxes, running the plant and paying shareholders.
If all of the company's plans come to fruition, the Carvills could do very nicely.
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