Tanzanian explorers smashed on ASX

Exploration companies Orecorp, Cradle Resources and Graphex Mining have been pummelled on the ASX as the market continues to react to changes to mining and exporting laws in Tanzania.

Orecorp shares, which were worth 63 cents each in February, were down 32 per cent to 19 cents at the close of trade today, while Cradle shares plummeted 42 per cent to 18 cents each.

Graphex shares were down 20 per cent to 24 cents a share.

Other Tanzanain-focused exploration companies such as Black Rock Mining, Kibaran Resources and Magnis Resources remain locked in a trading halt.

Gold-focused Orecorp is one of the larger WA-based companies with operations in Tanzania with about $27 million cash in the bank, whereas many of the other WA explorers operating in the African country hold between $1 million and $5 million.

In a statement today, the company said it had established an independent in-country presence as operator of the Nyanzaga joint venture and “has been able to materially enhance the value of the Nyanzaga project for all stakeholders”.

“The company is eight months ahead of schedule in the proposed Nyanzaga joint venture timeline, which allows sufficient time to assess the full impact and implications for the Nyanzaga project,” it said.

“The company will continue to work with all Tanzanian stakeholders and regulatory bodies to deliver the best outcome for Tanzania and the company.”

The proposed changes were approved in Tanzanian parliament last week, and are expected to be proclaimed as law once formally and officially signed as approved legislation.

Under some of the changes, the Tanzanian government would have a free-carried interest of no less than 16 per cent in the capital of a mining company that operates within the country, and also has the entitlement to acquire up to have of the shares in those companies.

The new legislation also provides for a ban on exporting raw resources outside of Tanzania that would have any beneficiation outside the country, and any revenue made from mineral developments would have to be retained in the banks and financial institutions established in Tanzania.