Botswana Metals' copper strike in Africa has revived flagging market interest in the exploration sector.
FOR a while there last week it looked like the punters in junior exploration stocks had abandoned the sector for good. But then along came Botswana Metals with its high-grade Airstrip copper strike in sunny Africa which put a rocket under the share price of the lightly capitalised group.
By the end of the week BML had given back some of its gain. But it still closed out the week 9.7¢ a share or some 255 per cent higher at 13.5¢.
Read Garimpeiro's exclusive mid-week report online at BusinessDay
The gain was just the tonic the exploration sector needed while the broader market was suffering from an almighty ''flight to quality''.
BML's run again demonstrated that no matter what the broader condition of the sharemarket, a juicy exploration hit will be rewarded in share price terms.
The problem with all that is that you can't be on board on all of them.
But it is possible to zero in on those where there is a better-than-average chance of action in the months ahead.
It's on that score that there will be plenty of interest in the news flow that comes from Sandfire Resources and its high-grade DeGrussa copper/gold discovery in Western Australia, as well as exploration news from companies hoping to repeat Sandfire's success on their nearby tenements.
DeGrussa was the local minerals exploration story of 2009, propelling Sandfire from a 9¢ a share nothing in May to as high as $4.39 a share.
It has since settled back at $3.42 a share, which, if you're from the Warren Buffett school of investment, is a good thing because it is cheaper than it was.
In the next couple of weeks Sandfire will release an initial resource estimate for the DeGrussa and Conductor 1 ore shoots, with further drilling required to do the same for Conductor 4 shoot.
The betting is that the initial resource estimate will come in between something like 8-11 million tonnes grading 5 per cent-plus copper, with gold and silver credits to boot.
It's expected to be just the start and is enough for company analysts at StoneBridge group to set a share price target for Sandfire of $5.60 a share after diluting Sandfire's value to take account of a likely $120 million capital raising at a 15 per cent share price discount to fund the development of DeGrussa as a 50,000-60,000 tonne-a-year copper producer.
The StoneBridge valuation also includes a component for the near mine and regional exploration potential of Sandfire's broader Doolgunna project area.
The hope is that the DeGrussa find is a pointer to a new volcanogenic massive sulphide mineral field, notable in other parts of the world for clusters of deposits.
Drilling recently resumed at the project with the multiple aim of resource definition at Conductor 4, the testing of some highly ranked nearby VMS targets, plus some drilling at regional targets.
It will be game on if the exploration program snags something that shows anything like the promise of the early DeGrussa holes.
CHEERING Sandfire on from the tenement boundary will be Talisman Mining, 13.4 per cent owned by former nickel king Kerry Harmanis.
Talisman rode the Sandfire wave last year and is now trading at 87¢ a share after Friday's 6¢ a share fall.
Thanks to last week's sharemarket rout, Talisman is now a lower cost option than it was for those looking for exposure in what could be a major new mineral province for Australia.
Talisman plans to start drilling in March at its Springfield copper/gold tenements, some five kilometres east and along strike in the same sort of rocks as the DeGrussa deposit.
The drilling will target several ''strong'' VMS-style targets identified by the sort of geophysical survey work that led to Sandfire punching in the discovery hole at DeGrussa last year.
Talisman is much more than Springfield (iron ore, manganese and other copper/gold exploration sites), but it is where all the interest in the stock will be in the months ahead.
THE same can be said for Alchemy Resources. It was off 2¢ to 64¢ on Friday in the broader market sell-off. It too plans to kick off a drilling program in March to see if the excitement on Sandfire's ground is also present at its Magnus tenements, which start on the eastern boundary of Sandfire's ground and extend westwards.
Airborne electromagnetic survey work had identified 13 ''conductors'' of interest. At last report, Alchemy was refining the data collected from the survey work to define priority drilling targets at Magnus. Like Sandfire and Talisman before it, results from the program are eagerly awaited.
ELSEWHERE, Garimpeiro's interest in the market's juniors has extended to include Resource Star Ltd. It is the restructured and refinanced company previously known as Retail Star.
In those days, it was a company not worth knowing.
Things have changed. RSL is now headed up by Richard Evans, a former WMC geologist/business manager, who knows everything there is to know about doing business in Africa.
No surprise then that Africa is very much the focus of RSL, with the group's portfolio rounded out with some decent ground positions in the Northern Territory and Western Australia.
The overall flavour of the portfolio is uranium and uranium-related, the flagship project being the Machinga joint venture in Malawi where Globe Metals & Mining has picked up the running.
RSL is putting the finishing touches to a $5 million capital raising arranged by Allegra Capital (25 million shares at 20¢ a share) that should see it return to trading on or around February 25.
