Comedy of errors at Berkeley Mineral Resources

Zambian focused Berkeley Mineral Resources has had a topsy turvy week or so. For some who got out their profits they will be feeling pleased with themselves, for others its been another expensive lesson in AIM share trading. The episode certainly speaks of over exuberance by the management team at BMR and probably very badly worded RNS releases in the context of the source of the information i.e. the Zambian press. the shares have swung widely from 1.2p to 2.4p on the “good news” and then subsequently collapsed today. Masoud Alikhani, the chairman will be probably more careful in what he writes in RNS’s in the future, the company is based in Africa after all!

On 20th June they issued the following RNS. The shares promptly spiked….all seemed well in Zambia!

Berkeley Mineral Resources Plc, primarily engaged in processing mining tailings in Zambia, is pleased to announce that its 100% owned Zambian subsidiary, Enviro Processing Ltd (“EPL”), has today learnt via the Zambian press that approval for the processing operations at Kabwe has been granted.

Further announcements will be made in due course.

Masoud Alikhani, Chairman, commented:

“We are very pleased to have been made aware that the approval of the project at Kabwe has been granted.  Following formal notification we will look to commence processing as soon as possible.

“It has taken time to secure what are very significant assets, ensure that the Company is protected from historic environmental claims, and then to receive the approval for processing, but we are now there and shareholders can look forward to steadily growing cashflow over a number of years.”

Then would you believe it the shares started a sharp downward spiral today on bulletin board rumours that in fact that Kabwe project hadn’t been approved after all (courtesy of a poster called gummibear). Finally, an RNS was released by the company this afternoon which backed up the rumour. The shares tanked as much as 40% and are currently down 26% to 1.75p.

The RNS read:

Berkeley Mineral Resources Plc (“BMR”), primarily engaged in processing mining tailings in Zambia, announces that, further to the announcement on Friday 20^th June regarding the approval announced by the Zambian Environmental Management Agency (“ZEMA”) concerning BMR’s Kabwe operations, BMR understands that it has today been announced that the decision has been deferred by ZEMA pending the conclusion of final consultation with key stakeholders. Following discussions with ZEMA, the board of BMR expects formal approval to be granted shortly. Further updates will be made to shareholders as appropriate.

A fitting image of Masoud Alikhani, Chairman – Ambulance indeed!

Just when you thought AIM can’t get any murkier, it does! Alikhani and the rest of the board have some explaining to do. Instead of erring on the side of caution they seem to have been carried away by reading the Zambian newspapers. Investors clearly need to take BMR RNS announcements with a severe pinch of salt. A comedy of errors indeed!!

Contrarian Investor UK

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