pru carries the torch for other african miners

The market's embrace of the further excellent results announced this morning by PRU at its Tengrela gold project in the Ivory Coast provides a clear indication that geopolitical risk is now less prominent in gold investors' decision-making, and this bodes well for a stock like SBL.

I am very hopeful that SBL will tread a similar path to that trodden by PRU over the past 18 months as it further delineates the gold resource of its excellent tenements in Ghana, one of the more stable West African nations. Recent results from the Konongo drilling project included:

 1 metre at 438 g/t gold from 147 metres
 2 metres at 13.5 g/t gold from 165 metres
 16 metres at 9.76g/t from 170 metres
 including 6 metres at 12.3g/t gold from 170 metres
 including 8 metres at 10.3g/t gold from 178 metres
 5 metres at 7.25g/t gold from 200 metres

At just under 1m ounces in JORC approved resources and a stated objective of 1.5 - 2m ounces; and with an ore-processing mill on site able to be recommissioned within months, SBL is my pick of the overlooked juniors for this year.

Besides the world-class calibre of its resource, the best thing it has going for it from my point of view is its proximity to production. If it chose to, SBL could re-open the existing mill (80k tonne p.a. capacity) very quickly indeed and move into the ranks of producer in one of the most exciting gold belts in the world.

As I have said in earlier posts, I see the company as a "Perseus-in-the-making". It's worth a look back at where PRU's share price was just 18 months ago for the light it sheds on SBL's current potential.

At just $24m market cap for SBL, with 70% ownership of a gold resource that could well exceed 1.5m ounces by the end of the year; with projected low extraction and processing costs; with production of 100,000 oz per annum tipped for the medium term (that's revenue of $100m p.a. with gold conservatively valued at A$1000 / oz); with all of these factors in its favour, SBL cannot languish at these prices much longer I believe.

There may well be a capital raising down the track if management does fast-track Konongo into production, but the benefits of such a move would vastly outweigh any short-term drag on the SP, in my view - especially if existing shareholders are looked after in any terms struck. I also tend to think that the directors would like the SP well north of here before announcing such a move so I expect any such move to follow a slew of further strong drill results.

Established holders already know the story, but for those looking for an entry to a stock with many similarities to an early-stage PRU, I reckon it's worth your research.

Good luck all holders. Caveat emptor.

Gupper