Semafo shares take off

Shares in Semafo (SMF-T) jumped 10, or 7.5%, to $1.43 in Toronto on May 27, on news that its Moroccan-based majority shareholder Managem was looking at options for its 52% stake in the Montreal-based junior.

Semafo says its parent company has hired investment bankers Rothschild to advise it in “seeking and reviewing alternatives to its investment in Semafo.”

“Managem’s review of alternatives may include the consideration of a number of transactions. There can be no assurance that any transaction will be entered into or completed as a result of this process,” Semafo said in a statement.

Managem is the mining subsidiary of Moroccan industrial conglomerate Groupe ONA. The company provided project management during construction of the Samira Hill gold mine in Niger.

Samira Hill is owned by Nigerien-based La Socit des Mines du Liptako, which, in turn, is held 80%-20% by African GeoMin Mining Development (AGMD) and the government of Niger, respectively. Semafo and Etruscan Resources (EET-T) each have a 50% interest in AGMD.

Semafo ended the recent first quarter with a loss of US$821,000, or 1 per share, compared with net earnings of US$3.9 million, or 4 per share, during the corresponding period of 2004. The year-earlier results include a US$5.45-million gain on the sale of some subsidiaries.

Gold sales during the latest first quarter quadrupled to US$12.6 million, with 36,926 oz. sold at an average price of US$341 per oz. The increase is owing to the startup of the Samira Hill mine in October 2004.

Semafo’s gold production for the quarter came in at a record 39,958 oz. at a cash operating cost of US$232 per oz.; the Kiniero mine in Guinea chipped in with record production of 16,821 oz.

Semafo has nearly 90.4 million shares outstanding.