An Alternative View20 Sep 2013 10:51
http://www.fm.co.za/business/money/2013/09/19/comair-african-eagle-resources
When investors are in the mood they'll back anybody with a half-decent story, a steely glare and a few pairs of properly empire-building shorts, but then the mood changes, the investors move on to another hot new thing, and you can barely find anybody to buy you a drink, let alone sink a few million into a half-finished copper project.
The big problem is that bringing projects to fruition is such a lengthy and costly business that you are constantly having to go back to your backers to ask them to top up the piggy bank. When there's money sloshing around, you convince yourself that you don't want to give away more of the project than you have to. Then all of a sudden you hit a few delays, costs go through the roof, you discover that the money tap's been turned off and hey presto you're negotiating from very obvious weakness just to survive.
As recently as November 2011, African Eagle was proudly announcing that the IFC was sticking an investment of US$5m into its Dutwa nickel project, and things were looking peachy. In April last year, it raised another £9,5m for the project, and in September it was reporting that everything was progressing to plan, test results were encouraging, grades were high and the estimated size of the resource was being increased.
But then by April this year African Eagle was saying that it was looking for a partner, and in May it admitted that interest in the project was rather less than it had previously hoped. Things came to a head rapidly after that. The company has now flogged its assets and reconstituted its board by appointing three new directors with experience in capital raising, and is preparing to try to have another bite at a different cherry.
It remains uncertain whether new hands at the tiller will have more luck than the last bunch, but it's clear that it is a major undertaking to raise money. Once more unto the breach, dear friends, once more.
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