www.ovocagold.com
Ovoca Gold Plc is a Moscow-based gold exploration and mine development company with a strong balance sheet and an exciting portfolio of gold properties in the Magadan region, Russia.
The Company has a successful track record of developing precious metals assets and bringing value to shareholders. At the beginning of 2009 Ovoca Gold sold its flagship asset, the Goltsovoye silver deposit, for $47.7mn, a near 200% premium to the Company’s market capitalization at the time of sale closing. The entire asset development cycle Ovoca completed on Goltsovoye, from exploration to feasibility study to financing and start of mine construction.
UPDATE: Ovoca Gold swings to net profit in first half due to investment performance
Adds broker comments...
Russia-focused Ovoca Gold (LON:OVG) reported a net profit of €7.17 million for the first half to end-June 2011 compared with a loss of €1.17 million a year earlier.
At the end of the period, the company had cash and cash equivalents and financial assets available for sale of US$54.09 million. Ovoca had circa 800,000 Polymetal common shares worth US$15.35 million, approximately US$28.74 million in cash and US$10.01 million in a diversified portfolio of gold mining equities.
The strategy behind Ovoca's holding of Polymetal shares and the investment in the GLG fund is to give Ovoca shareholders exposure to the gold price before Ovoca has its own gold production.
Its two main projects are located in the Magadan region: Stakhanovsky and Rassoshinskaya, which together contain an inferred resource of 1 million ounces of gold.
Ovoca expects to have an exploitation license for the Olcha deposit on the Rassoshinskaya licence by the end of 2011 or in early 2012. Olcha accounts for 650,000 ounces of the total resource.
Exploration continues on a number of prospects. At Podgorniy on Rassoshinskaya, Ovoca plans to complete a drilling programme of 5,000 meters, of which 4,000 metres is already completed.
At Zet near Olcha, it has drilled 2,500 metres, with the aim of establishing that surface mineralisation shown by trench work extends to depth.
Ovoca expects first gold production at Stakhanovsky at the beginning of 2014.
In a note, house broker Fairfax said: "Ovoca Gold is one of the few junior gold explorers with assets in Russia. The management have a track record of achieving value for assets in Russia.
"The company are currently trading at a 25 percent discount to their cash and cash equivalent value assigning no value to their current JORC gold resource base of 1 million ounces. We continue to recommend the shares with a target price of 65 pence."
