A recent 6% bounce in iron ore prices at the Chinese port of Tianjin to $53.3 a tonne may or may not prove to be the harbinger of a significant rally in the metal’s depressed price after falling from $110 a tonne last summer to a recent low of $44.10c. But it might bring some comfort to bombed-out Sable Mining Africa (SBLM), which has announced sine encouraging metallurgical test results from its key Nimba iron ore project in the West African state of Guinea.
Depressed iron ore prices and a heavy capital expenditure programme, not to mention the ebola virus, had pushed shares in Guinea-focused iron ore play Sable Mining Africa (SBLM) through the floor not so long ago, sending them crashing from an 11.25p year’s high to 0.65p, as the bad news seemed to pile up. Now, however, they have rallied to 2.05p, helped by an ‘Infrastructure Development Agreement’ (IDA) with the government of Guinea’s West African neighbour, Liberia, to facilitate the shipment of iron ore from Sable’s key Nimba project by rail 270 km. to the Liberian port of Buchanan.
For a company which has lost 94% of its stockmarket value in six years and has chalked up a $3.3 million (£2.1 million) first-half loss, funding a $300 million project to mine a mineral whose price has dropped 50% in a year must present certain challenges. Yet Sable Mining Africa (SBLM) is exuding characteristic confidence as its directors consider the alternatives open to the AIM-quoted outfit to bring its Nimba iron ore project in Guinea, one of the West African countries in the ebola front line, to fruition.