Middle East Diamond Resources is a South African company with historical interests in the exploration, evaluation and development of platinum group metals, primarily in the Bushveld complex of the North West, Gauteng and Limpopo. The company held an interest in four PGM project areas, namely Abrina, Klipfontein, Doornpoort and Syferfontien. It had total prospecting rights across 63 000 hectares. The company recently restructured and put most assets up for sale in a bid to buy into diamond mining, investigating acquisition prospects around Kimberley.

Against the backdrop of difficult conditions for the mining industry today, Middle East Diamond Resources has struggled to raise capital and has yet to progress further than early exploration of its properties, with Middle East Diamond Resources share price stagnating.

The company was extensively restructured in 2014 and 2015, and suffered overwhelmingly negative data for the year ended February 2016. The net loss totalled R63 million, with negative equity of R843 000 attributable to shareholders. This was despite reducing operating costs from about R1 million per month to around R450 000. Middle East is currently exploring options to raise further capital to buy into further exploration and cover all general and administrative costs. It is struggling to secure the buy in of past investors to inject further cash into the group, and further issue of shares is under review. In the event that no further capital is raised, the group will cease to be a going concern.

There was some good news for the company in August 2016, when it announced that it has entered into an agreement to buy the Kamfersdam dumps in the Northern Cape for R14 million from diamond exploration company Blain Capital Solutions. The purchase price may be reduced if Middle East meets its profit target of R3.45 million every six months, through sale of diamonds.

The acquisition of the Kamfersdam dumps signals a small light on the horizon, but most investors will be unlikely to consider Middle East Diamond Resources shares an attractive buy. Junior and exploration mining companies are finding it very difficult to make headway in the current economy, and Middle East is likely to be no exception. The forecast is that Middle East Diamond Resource share price will not strengthen significantly any time soon.

Materials

Metals & Mining

Other Mined Minerals

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