PROACTIVE NEWS SUMMARY: Cluff Gold, Ferrex, Copper Development Corporation, Baobab Resources, Allocate Software

Proactive Investors today drew investors' attention to junior gold miners operating in West Africa including Cluff Gold (LON:CLF, TSE:CFG), Aureus Mining (LON:AUE, TSE:AUE) and Avocet Mining (LON:AVM).

According to broker Oriel, these three companies are the best bets in the emerging gold hot spot of West Africa.

The broker, which has just visited the region, said West Africa is an under-explored gold region that is highly prospective for the discovery of multi-million ounce gold deposits.

Its countries of preference are Burkina Faso and Liberia, which have political stability as well as favourable permitting processes, fiscal regimes and an ease of doing business.

Liberia especially is a “post conflict success story” following the democratic re-election of President Ellen Johnson Sirleaf with one of the most attractive fiscal regimes in the West African region, said the broker.

It added that Cluff represented the greatest valuation upside potential of the West African gold stocks under coverage. It trades on 0.68 times NAV of 126p/sh (205p/sh or P/NAV 0.42 times on spot gold).

The next major drivers for Cluff will be the award of environmental permitting and the completion of feasibility studies for the Baomahun project in Sierra Leone in the first half of this year.

The company has already committed US$16 million for early infrastructure work including site access rehabilitation, exploration camp upgrades and plant site earthworks to enable construction to start in late 2012. First production is targeted for 2014.

“We expect a re-rating of the stock as the market gains confidence in the company’s ability to develop Sierra Leone’s first commercial gold mine,” said Oriel.

Other two feature stories by Proactive were dedicated to mining stocks Ferrex (LON:FRX), which emerged among the top risers in the markets today, and Copper Development Corporation (LON:CDC).

Ferrex shot up over 20 per cent today as it revealed positive results from two projects.

In South Africa the group has confirmed the potential for a low capex iron-ore mine at the Malelane project.

Meanwhile, in Togo it believes it may have another cheap mine development on its hands, with the Nayega manganese project.

Ferrex completed 1,713 metres of drilling at Malelane and a systematic pitting programme at Nayega. Resource estimates are now awaited for both projects.

"Resource delineation programmes at both our Malelane iron ore project in South Africa and Nayega manganese project in Togo have returned impressive results,” said managing director Dave Reeves.

“We are on track to deliver maiden resources at both projects in the first quarter and the second quarter respectively.”

Investors welcomed the news. On AIM, Ferrex shares gained 0.43p, or 20 per cent, to trade at 2.5 pence.

City broker Collins Stewart said the group’s strategy of identifying and advancing relatively low capex projects, which are already supported by infrastructure, appears to be developing well.

“These results continue to confirm the attractiveness of the projects, which are set to benefit investors as the projects advance towards production,” it said in a note to clients.

Another article took a close look at Copper Development Corporation, a fully-funded, AIM-listed gem whose efforts in the Philippines don’t really seem to be receiving the market recognition they deserve.

The recent drilling results from the company’s Basay deposit on Negros Island are a case in point.

They threw up some of the best high-grade intersections identified to date, including 14.3 metres grading 5.47 per cent copper.

Yet this barely seemed to move the dial so far as the share price is concerned.

“In the last five years how many times have we seen intersections like those?” asked chairman Mitch Alland. “The market has slept through this one.”

The rather indifferent response to the latest data and a succession of earlier very positive updates reflects the state of the small-cap market at the moment with risk-averse investors taking their money off the table.

This has been an indiscriminate sell-off, though in recent weeks, we have seen the first green shoots of a recovery.

The upturn can’t come quickly enough for CDC, which has a decent tale to tell. It is essentially two copper investments wrapped up in one.

The first, Hinoba-an, will provide a near term interest, while Basay, the second, possibly more exciting investment, has the potential to be a company maker.

Additionally, the CDC owns most of the tenements covering the 25 kilometres between the two deposits, which becomes very important if Basay fulfils its potential.

CDC owns 92.5 per cent of the Hinoba, a 319 million tonne deposit grading 0.35 per cent copper.

For a relatively small project on world scale, the economics are compelling and at 38.5 per cent internal rate of return it is up there with some of the giant copper projects being developed by the industry’s super-majors.

Proactive also covered today’s report from Baobab Resources (LON:BAO), which said that International Finance Corporation is supporting the company’s 2012 exploration programme with US$1.9 million of funding.

The IFC is a member of the World Bank Group and was set up to promote sustainable private sector investment in developing nations.

It is a joint venture partner with Baobab having acquired a 15 per cent stake in the company’s Tete magnetite-ilmenite project in Mozambique in 2009. It is also Baobab’s biggest investor with a 5.78 per cent.

Chairman Jeremy Dowler said: "We are very pleased to announce the continued support of our partner IFC as we move from resource definition towards pre-feasibility studies at Tete.

“The corresponding contribution in 2011 was approximately US$1.29 million and we anticipate that the IFC will become more involved as the project progresses, for example in the facilitation of access to port, rail and power infrastructure."

Away from mining stocks, one of today’s main stories by Proactive was dedicated to staff rostering specialist Allocate Software (LON:ALL), which said today underlying revenues grew in its latest half-year as momentum continued to build in its core NHS market.

Revenues overall rose to £16 million from £15.9 million in the half year to November, with underlying sales up by 15% excluding acquisitions and a £3 million contract in Australia in the previous year.

Allocate added eleven new NHS trusts to the customer list for its core HealthRoster staff scheduling software during the half.

That was similar to the 12 added in the same period in the previous year and in spite of the uncertainty caused by proposed reforms to the NHS.

Chief executive Ian Bowles said it showed that the NHS was still investing with the company.

“If you look at our healthcare revenue in general, it is only £400-500,000 behind this time last year when we had in excess of £3 million from the Australian healthcare deal.”

“It adds a real strong underlying momentum to the business” he said. “Organic underlying growth in healthcare was 14%, which in this day and age is not too shabby.”

“We expect this year to secure a similar number of HealthRoster agreements to those contracted last year and the recently acquired Zircadian business is performing in line with our expectation,“ he added.