From the financial review this morning. Tawana shows African...

From the financial review this morning.

 

Tawana shows African iron ore dream lives on
Blue skyEdited by Luke Forrestal - 23 Nov 2013 03:40:15

Wayne McCrae, chairman of copper explorer Cudeco. Photo: Tamara Voninski
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The much-touted emergence of the African iron ore industry hasn’t quite played out as expected, but the stable price of the commodity has ensured that juniors toiling away on projects are still able to attract interest.

There is perhaps no better case in point than Perth-based Tawana Resources, which has shed its gold and diamond assets to focus on developing the Mofe Creek iron ore project in Liberia.

In early October, Tawana closed a $2.9 million share placement priced at 1.2¢ a share through investment bank Cannaccord Genuity.

Within a day of resuming trading, the company’s shares had risen to 2¢, suggesting investors who had shaved back their subscriptions had gone and bought on market.

The stock has continued its run and is now trading at 3.4¢, undoubtedly to the pleasure of those who took part in the placement.

Overseeing the raising was former Brockman Resources chief executive Wayne Richards, who joined Tawana as executive chairman in August.

Richards says he was attracted to Mofe Creek, the first African project he has tackled, by the quality of the iron ore and its proximity to established infrastructure.

Whereas giant developments such as Rio Tinto’s Simandou in Guinea and Sundance Resources’ Mbalam on the border of Cameroon and the Republic of Congo require lengthy rail lines and new ports, Mofe Creek is but 20 kilometres from the coast and 85 kilometres by sealed road to the deepwater port of Monrovia.

Earlier this month Tawana commissioned Tenova Australia to complete a scoping study on the project. It anticipates announcing a maiden resource in the March quarter next year.

An exploration target of more than 500 million tonnes has been set and the expectation is that the coarse itabirite ore will be easily upgradeable to 60-65 per cent iron content.

While some might shudder at the thought of investing in Liberia, which has a history of violent civil war, Richards says the country has moved on and is open for business.

The fact that big steel and iron ore industry players such as Vedanta, ArcelorMittal, Severstal and China Union are pursuing projects there suggests this is not an exaggeration.