12/06/2023

URA Holdings (URA) listed in March 2022 on the Main Market of the London Stock Exchange as an African focused mineral exploration company. Initially the company’s purpose was to seek unique, value-enhancing opportunities in minerals as a project generator including to prove-up early-stage exploration projects to spin out/farm out or sell.

Key Directors

Given what we now know it has certainly delivered on this original aim. It helps that key member of the board have decades of successful experience in the space, with Ed Nealon, Non-Executive Chairman, a founder and former Chairman of Aquarius Platinum Ltd dual listed on AIM and ASX, co-founder of Sylvania Platinum Ltd (AIM and ASX), and co-founder of Tanzanite One (AIM). He is currently non-executive Chairman of AIM-quoted Lexington Gold (LEX), a stock, which even in current stock market conditions, has outperformed many of its peers. Dr Bernard Olivier, Chief Executive Officer of URA Holdings is currently CEO of Lexington.

The Gravelotte Mine

Within a few weeks of listing it was announced that URAH had purchased the Gravelotte Mine, the largest emerald mine in the world during the 1960’s. In the colloquial parlance, Gravelotte was bought for a song: £123,000 in cash for each 5,000,000 carats of emeralds produced by Gravelotte up to maximum aggregate amount of AUD2,000,000 (approx. £1,230,000) as a production royalty. £100,000 of ordinary shares of URA were issued at the mid-market closing price on the date the SPA was signed.

JORC Resource

During 2022 2022 URAH established an independent maiden JORC (2012) Mineral Resource Estimate of 29 million carats of contained emerald in just two out of the openpittable deposits on the Gravelotte property. 12 Additional JORC (2012) Exploration Targets totalling between 168 million carats and 344 million carats were also established. The total contained in situ JORC Resource of 29 million carats has an estimated value of around $261 million. This has delivered something of a wow factor to the stock, something which is already starting to be evident, as the share price at 2.6p has broken above the initial 2.5p high at listing. At the time the company raised £1.05m at 2p.

As far as what happens now for the rest of 2023, it is something of a dotting the i’s and crossing the t’s exercise. Given that Gravellotte has been an existing mining property, it is just up to URA to get the site shovel ready, something which has already been going on. In terms of cost, as compared to the vast $250m plus value of the JORC Resource, it would be a nominal amount, something that should be accessed with relative ease.

Andrew Austin

Indeed, followers of the stock will already be aware that in the latest placing and subscription to raise £280,000 in ordinary shares and £50,000 by way of a convertible loan note, stock market rock star Andrew Austin of Rockrose and Kistos (KIST) fame bought into URAH. This will be viewed by many as a validation of the enormous opportunity at URAH, and the shares have responded in kind.

Looking at the latest accounts of URAH release in April, it can be seen that flesh has been added to the bones of the Gravellotte Project, with key directors working with the existing mining team to prepare the site. It is clear that we are in the run up to decent newsflow regarding Gravellotte’s development, and ultimately, production.

Conclusion:

What will be interesting to see over the course of the summer is how the gap between the current market cap of URAH at a £4m market cap is resolved in terms of the implied valuation of Gravelotte at $261m. So far we would appear to be just at the foothills of such a re-rate / convergence.