"amx's takeover potential grows" - streettalk

advertising
STREET TALK
Ampella’s takeover potential grows
PUBLISHED: 8 HOURS 1 MINUTES AGO | UPDATE: 8 HOURS 1 MINUTES AGO
SHARE LINKS:email print-font+fontGIFT ARTICLE:100
EDITED BY SARAH THOMPSON AND ANTHONY MACDONALD
The sell-down in Ampella Mining’s shares over the past two weeks has made the West African gold explorer look very cheap and more of a potential takeover target, according to Patersons Securities.

While Ampella has faced headwinds over the past 12 months, Patersons said the recent slump in its share price has it trading at a level where its resource base is valued at discovery cost, $14 an ounce.

“Little value is being placed on an exploration portfolio that has been significantly de-risked, is four years advanced from initial discovery and which contains a significant and very likely commercial gold resource,” head of research Alex Passmore said.

I would be disappointed with $1.00 per share...



Ampella’s market capitalisation has now sunk below $100 million. Less than two years ago, it was around $500 million.

Factors behind the slump in value have included growing risk aversion among investors, concerns about the metallurgy of deeper ore zones at the company’s flagship Batie West project in Burkina Faso and a takeover/sales process that fell flat.

Patersons, which was lead manager on a $45 million capital raising for Ampella in February, has a 12-month price target on the stock of $1.09, which represents a 173.7 per cent return based on its current price.

The price target includes dilution for a future $100 million capital raising at 95 per cent of the current share price.

Ampella management is understood to be meeting with investors in Sydney this week.