African Metals Corp. (PINK:AFMCF) is one of 500 companies that we profiled in our new book (the Top 500 Gold and Silver Mining Stocks). We recently had the honor of doing an exclusive email interview with Nigel Ferguson, the President and CEO of African Metals Corp. Here’s what he had to say.
TradingStocks.me: If you had a few sentences to tell people why they should invest in African Metals Corp., what would you say?
Nigel Ferguson: AFR is under-priced and under valued at present. It will have a solid cash flow base; be very well positioned to expand operations both in the DRC, Zambia and other areas. We will be looking at any project within the base metals arena that is likely to add value through production profits. It’s a company with a solid base after 4 years of work being completed and is ready to expand and take advantage of its very good position in the country.
TradingStocks.me: Do you have any updates on the Luisha South project?
Nigel Ferguson: We are awaiting delivery of the final critical supplies and consumables into DRC so as to allow the DMS plant to be switched on and start processing ore. Ore is being stockpiled on the ROMM pad to allow blending of the grade and allow a consistent ROM feed.
The water recirculation ponds are being finalized with one pond completed as at 17th March and the tailings or slimes dam completed on the 18th March.
The DMS concentrator plant is rated at 100tph and we will ramp up production from a single 8 hour per day shift, to a 24 hour per day operation over the next 2 to 3 months or less.
Overview projected cash flow for the first 5 years is below. We are aiming to have about $20m net profit per year for about 12 years. Capital expenditure in Year 1 is to purchase floatation cells for the treatment of sulphide material from the pit which will be in operation from month 9 onwards.
Please click the image below for a larger version of African Metals Corporation’s projected cash flow for the next five years.
TradingStocks.me: Where do you see the company headed over the next three to five years?
Nigel Ferguson: On the back of a cash flow base, we will be expanding our operations in the DRC and neighboring countries. It should have at least $50m in the bank and two or three more projects on board within 18 to 24 months.
TradingStocks.me: Where do you see the price of gold going in the next year and the next three to five years?
Nigel Ferguson: We are not a gold company and this is not relevant to us. If its copper and cobalt prices. I don’t see the demand for copper weakening over the next 5 years with a projected price range of between $7500 to $8500 per tonne. The developing world is still developing and average demand will remain strong.
Cobalt is still in demand for battery manufacture and until new technology for stored power is found and accepted worldwide there will remain a good demand for Cobalt.
TradingStocks.me: Do you think hyperinflation is a genuine threat to the U.S. economy?
Nigel Ferguson: Yes I do. The US economy is in tatters, artificially held up by the US government bailouts and the printing of money. The critical underlying economic principles are not being worked on and Debt to GDP has blown out beyond any structured recovery can be achieve in a sensible period of time.
TradingStocks.me: Is there anything you think people don’t realize about African Metals?
Nigel Ferguson: We may be at the small end of the market, but with a proven track record in the DRC and production about to commence on the Luisha Project after only 22 months since its acquisition, we are well positioned to take advantage of many other assets on offer in the area. These are being offered to us on a near daily basis. We have a very pragmatic approach to exploration and development of profitable operations.
There is also a continuing trend of “fear of the unknown” with the DRC, which has had bad press over the last few decades. I can assure you that the Katanga Province is not without its troubles, BUT nowhere near the troubles portrayed in the international press and on the whole it is a peaceful place to do business compared to other African countries I have worked in.
African Metals trades under the following tickers: PINK:AFMCF, CVE:AFR and FRA:OWW.
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