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West African Minerals' share movement gives good entry point, reckons SP Angel

Published: 07:02 24 Apr 2013 EDT

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The recent movement in the shares of Africa-focused iron ore explorer West African Minerals (LON:WAFM) should provide a good entry opportunity for shareholders, says City broker SP Angel.

"We expect the company to build new asset value with the publication of larger iron ore resources and for news on other nearby iron ore projects to help the stock this year," it says in a note.

The comments come after a site visit to Cameroon, where the firm has six licences, including its flagship large scale Djadom South deposit.

The broker said its first impressions were "positive" noting there was "huge" future potential for iron ore production in the country.

WAFM is currently drilling Djadom, which is next to Sundance Resources’ Mbalam project, and vice chairman Brad Mills recently told Proactive that a maiden resource could be ready by this summer.

Work has revealed high-grade haematite close to surface and significant banded iron formations down to 100 metres and along a more than 6km strike.

"It seems likely that the new heavy duty rail line to Djadom should be built if financing comes available to the Sundance and Affero projects in the area.

"Government and other support looks likely to enable the planning and future construction of the railroad and investors should watch developments here closely," said the broker, which added that it would be impractical to truck iron ore from Djadom to the coast so this line is essential.

The broker also notes that a new deep water port is being built and iron ore capacity can be added to meet railroad construction.

In Cameroon, the company holds six permits, known as Binga, Minko, Sanaga, Lélé, Dja and Djadom, covering an area of around 6,000 sq km.

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