Sovereign Mne - Re: SMA Stream Log - SMA when it was 7p...

SMA when it was 7p !! remember loads of big players surround us with proven working mines. Shore Capital reckons that a realistic target for the drilling is a resource of between 500,000 and a million ounces. But that’s only the start, as the company is currently focussing on only a small portion of the entire Mandiana-Magana territory. And there are plenty of other concessions inside Sovereign’s portfolio besides Mandiana-Magana. But on the basis that Shore’s initial target is met, there is a strong case, the broker reckons, for a share price of around 23p. At the moment the market has not caught up with the prospects of near-term news on a resource, and the shares are languishing at a relatively lowly 7.13p. Still, given current market conditions, that doesn’t compare too unfavourably to the 12 month high of 11p, and is still within reach of the 10p level at which the last money was raised back in July. Shore Capital reckons that the initial resource at Mandiana-Magana is likely to consist of shallow oxides hosted in soft saprolite, which would be relatively easy and low cost to mine and process. “In the medium term”, comments the broker, “we would not be surprised if the resource at Mandiana-Magana turned out to be several million ounces (let alone the potential resources at the other concessions)”. Shore also expects significant positive news flow over the next 12 months from all five of Sovereign’s properties in Guinea. While the generous percentages the company has allowed the government of Guinea to hold in its concessions have allowed it to have its pick of concessions and secure excellent local working relations. Overall the company has five early stage gold properties covering a total of around 3,600 square kilometres, and any of which could, in the board’s opinion, become a significant gold asset. Sovereign’s strategy for expansion is to sign similar joint ventures for mineral exploration with other governments in Africa. Of the other Guinea concessions, Maréla and Dalgana are known to contain substantial alluvial gold, as well as several untested bedrock gold occurrences. Stream sediment sampling results have promoted Maréla up to second place in Sovereign’s list of priorities, and a number of highly prospective areas for follow-up soil geochemical sampling having been outlined. But for now, all eyes will be on the assay results from Mandiana-Magana when they come out, both from the recent drilling, and from the drilling that’s set to recommence shortly. It should be interesting to watch.