Sovereign Mne - Re: SMA Stream Log - Sovereign (SMA) partnering up with...

Sovereign (SMA) partnering up with the Guinea government,strategic partner or a complementary acquisition. By PLATTS With the advice of people who know the region well, including experienced geologist John Prochnau, Pearl has signed a sovereign partnership with the Guinean government, ensuring favourable treatment at the exploration stage. While politicians may come and go, senior civil servants stay put and some are on the board of the local operation of Sovereign Mines Of Africa (AIM: SMA). As with many African countries, mining offers Guinea its best chance of wealth and prosperity. Guinea has the world’s largest reserves of bauxite, the main source of aluminium; Rio Tinto plans to bring the massive Simandou iron ore mine into production in 2015; and AngloGold Ashanti, Rusal, Bellzone and Avocet are others operating in the country. The Chinese are investing heavily, improving Guinea’s infrastructure in return for supply agreements, and that could help Sovereign . This is part of the prolific Siguiri gold belt and Sovereign has rights over three gold properties . Sovereign Mines has three prospective gold projects based in Guinea , covering a total of around 1,363 square kilometres. "In order to help develop our (Mandiana-Magana) project ( Guinea ) we are continuing to search for a strategic partner or a complementary acquisition. Phase 3 drilling programme at Mandiana in the Republic of Guinea. The positive assay results saw shares in the company rise in value more than two-and-a-half times over to 2.00 pence, easily making it the best performer on the AIM All-Share. "These very encouraging results confirm the impressive grade of high-grade shoots within a broader extensively mineralized envelope," said John Barry, the company's director of exploration. Drilling programme encounters wide intervals of significant gold. Speculative Buy at with a 14.2p target price. Valuation Mandiana-Magana (MM) is where most of the company’s attention will be focused initially as this project lies within a world-class gold district which straddles a major gold mineralised system. MM seems to have been the subject of little in the way of modern exploration methods; but there is no doubt of the prospectivity of this project as it encompasses a site of a gold rush where local artisanal gold miners have dug more than 9,000 pits. The Government of Guinea has served an ace here as this area has never been drilled and just begs attention given the impressive gold discoveries on neighbouring or nearby properties such as Gold Fields’ Yanfolila (sourced by John Barry) and SearchGold’s Mandiana. Already the early sampling work by SMA has uncovered grades as high as 11.6g/t; even though the goal is to discover a large tonnage of lower grade gold resource that could support a large scale open pit operation. Moving ahead it looks as though there could be a healthy flow of news from the Mandiana-Magana drilling results, but sensibly the management will ensure that the Guinea subsidiary has made good progress before signing up the second African country. The drilling programmes should lead to resource definition with a maiden JORC resource target of between 500,000 and a million ounces of gold. Peer group analysis of gold explorers in West Africa has revealed that on discovering the target JORC resource, SMA could attract an Enterprise Value £23.6 million which equates to 14.2p per share. Our recommendation is Speculative Buy with a target price of 14.2p. .