News

February 16, 2009

The Paradox Of Cash: African Aura Attracts The Wrong Kind Of Attention With Its Strong Balance Sheet

By Alastair Ford

On the face of it, it’s far, far better in these troubled times to have cash on the balance sheet than not to have any - especially if one’s chosen form of business is exploration, where any prospect of cash flow may be either a distant dream, or, conceivably, not in the plan at all. So it is for African Aura, a company set up with the clearly stated goal of providing exploration and development opportunities in West Africa, and which never really had any specific intention of looking for production opportunities. A successful fundraising last year, before things got really bad, has left the company looking reasonably secure - from one perspective, at least. The C$6.7 million that African Aura has in the bank will, says chief executive John Gray, last the company a couple of years or so.

Of course, that wasn’t the original plan. Exploration expenditure has been cut by 75 per cent, and there is a new urgency to the company’s quest for joint venture partners. But urgency only in the sense that if joint venture partners don’t come in then some of the projects in African Aura’s portfolio won’t get funded. Some will, though: the flagship Batouri gold property in Cameroon, a granite-hosted quartz vein project that has to date delivered grades as good as 65.9 grammes per tonne over...