Monday, March 1, 2021

Dowgate affirms ‘BUY’ recommendation on Botswana Diamonds stock

Dowgate Capital Stockbrokers have affirmed the Botswana Diamonds (BOD) stock rating of a BUY following news the diamond explorer has restarted exploration work at its licence area near De Beers producing mines in Botswana.

The brokerage firm stated that with results from the Orapa exploration programme anticipated in May and June, it could see a resurgence of interest from investors in the company and resultant bounce back in the share price. There is a concern that in the absence of recent exploration newsflow, the market may have forgotten and overlooked the potential of Botswana Diamonds.

“The shares have been recently changing hands at around only one third the price at which they traded back in September last year. The current market cap just about reflects a listing value, rather than attribute any value to the potential of a significant diamond discovery being made,” said Dowgate.

Botswana Diamonds has a market capitalisation of £2.7 million or about P40 million. Dowgate told the market it was worth highlighting that the management/director team behind BOD made the AK6 (Karowe) kimberlite discovery in Botswana in 2004, when the ground was held by African Diamonds (AFD) in partnership with De Beers.

Karowe mine was later developed into a mine by TSX listed Lucara after it acquired De Beers’ stake and then AFD for around US$90m. They said their current partner is international mining major Alrosa, who are providing advanced and highly innovative exploration techniques in what should be a dream team combination in this prolific diamond discovery region of the world.

“To this end, and with a ramp up in exploration ahead, we continue to recommend Botswana Diamonds as a ‘Buy’,” said the firm that acts as a joint broker to Botswana Diamonds.

John Teeling’s BOD together with Russian major, Alrosa went back to work this week as they continue to scour for economic pipeline on Blocks PL 206, 207 and 210 in Orapa. The company said a team of seven Alrosa geologists, mineralogists and geophysicists have arrived on site to join the Botswana Diamonds team and conduct follow-up exploration on blocks PL 206, 207 and 210.┬á

A comprehensive exploration programme conducted in Q3 2014 followed by detailed analyses in the Alrosa laboratories highlighted specific target areas on the above blocks.  The next stage of work will entail further soil sampling, electromagnetic and ground magnetic surveys.

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