September 18, 2007 Moto Goldmines Still Awaits A Decision On Moto Property In DRC
By Jack Hammer
So to recap… Phil Edmonds has been hit for six out of the park, a rebel general is running rampage across the country near to Banro's properties, and there's an ongoing and somewhat fishy-looking review of mining licenses nationwide. Yes, it's another simple year in the mining sector in the Democratic Republic of Congo (DRC). Most of the recent action has, for obvious reasons, been taking place down to the south of the country along the copperbelt. But up in the eastern side of the country, where supplies come in from Uganda rather than Zambia, and where all the real killing took place back in the 1990s, a small Australian company is struggling over a rather large gold asset.
With an indicated and inferred resource of over 19million ounces the Moto property - owned by Moto Goldmines - is probably the largest gold asset inside an AIM listed company. One day it will be a mine, no doubt about it. The question is: when? Moto is currently working on a bankable feasibility study, due for completion at the end of the year. And, in spite of other distractions, chief operating officer Andrew Dinning is keen to emphasise that on the ground the company has been working hard: "We've continued business as usual this year", he says, "but some people in Europe think we haven't been doing anything".
That's because questions have been hanging over Moto's license since January when the Vice Minister of Mines claimed in writing that Moto had not been meeting certain obligations. With nearly 20million ounces at stake, it was perhaps inevitable that somebody, somewhere, would get obstructive. It's gone quiet on that front for now, but with the recent ructions over CAMEC echoing in everyone's minds, Mr Dinning stresses that Moto isn't out for confrontation. Not for him the indignant froth and reams of legalese that issued from the offices of CAMEC after the problems with Luita. "We've preferred a more conciliatory approach", he says. "We just want to be left alone to get on with the job". And so far so good. It's been quiet since April, and as Mr Dinning says, Moto has been working away with infill drilling and other early development work.
But now the danger is that it's gone perhaps a little too quiet. Moto had originally understood that the license review would be completed by August this year. But there's no sign of that. As yet, there's no sign even of a mooted interim review. "The indications to date are that it will take a while yet", says Mr Dinning. On the plus side Moto's joint venture partner, state-owned Okimo, has had its' properties reviewed and been given the green light. But if Moto doesn't get the go- ahead soon, then when the bankable study is completed there's a very real likelihood that the project will be left high and dry.
Under the current circumstances, Mr Dinning is quite clear that it would be pretty hard for Moto to move things forward. "I don't think the board would want to commit", he says bluntly. And who can blame them. The plan instead would be to step up definition drilling and to move ounces up into more certain categories. The metallurgy is already done and dusted - the ore is sulphidic and amenable to flotation, so no need for any BIOX. Recovery rates will run at slightly better than 80 per cent. But as long as the strongmen and bureaucrats dither, no one's going to put up any money for development, so in a sense all that's academic for the time being.
There are a few months yet before the end of the year, and Mr Dinning remains hopeful. "I guess we're cautiously optimistic", he says, "it's just how long it will take". With A$35million in the bank, at least there's no impending cash crunch for Moto. But come January, the company may very well find itself sitting on its hands. "If the commission is definitive and it gives up a lasting outcome, then I'm quite willing to wear it", says Mr Dinning. B
MOE Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
