Tuesday, 10 August 2010

Algerian press smears 'foreign owned' gold mine

Two vicious and seemingly libellous smears appeared in two of Algeria's leading newspapers on 2nd August, namely El Watan and El Khabar. The subject of the smears was the London-registered company GMA Resources PLC, which owns 52 of ENOR Spa, the Algerian operating company of the Amessmessa-Tirek Gold Mine in Tamanrasset wilaya.

El Watan's headline (02.08.10) exposed what it called 'the shocking hidden side of the GMA-Sonatrach partnership', while El Khabar headlined the fact that the Algerian government was opposing the participation (27 per cent holding in GMA) of Sahara Gold Limited, a subsidiary of the Egyptian-based ASEC Company for Mining (ASCOM) SAE.

Both reports are testimony to the appalling standards of Algeria's media. We will not repeat the libels, merely to say that they gave the impression that the company was under judicial investigation on the instruction of either, or both, the Attorney-General at the Court of Algiers and the DRS; that the company was in breach of various regulations and that these investigations might uncover a whole range of 'shocking' revelations relating to the company's past performance, its relations with Chakib Khalil, Sonatrach and Tassili Airlines; all of which were under investigation for corruption, etc.

Fortunately, we know the companies and the mining operation concerned well and are able to confirm that the two press reports are entirely false. The company directors have also fully rebutted the press reports, confirming that neither GMA nor ENOR has received or been informed by any of the Algerian Mining Agencies of a breach of GMA's licensing arrangements; that both companies maintain good relationships with the Algerian Mining Agencies through their respective compliance with the Algerian mining code; that neither company has been informed of or has had knowledge of the reported investigation(s); and that the information in the El Watan and El Khaber articles has no basis.

The tenor and content of the articles suggested a DRS attack. Indeed, given Mediene's personal financial interests in both the oil and gas sector and gold prospecting, the conclusion that might be drawn from the articles was that the DRS was using the new 'Soviet-style' economic regulations to get its hands on the mine.

However, if either Mediène or the DRS, or another party was wanting to acquire the gold mine, rather like the analogy with the General's nephew wanting to expand production at Beni Messous (above), there are easier, more straightforward and probably cheaper (in the long run) ways of doing it – like buying GMA shares on the open market!

So, if the articles were not the customary DRS smear, what were they about? From our enquiries, it appears that the two newspapers were being used to manipulate the company's market share price. Within a matter of hours of the press articles becoming available, about two per cent of GMA's shares were traded on London's AIM market. That is a significant number considering that there had been scarcely any trades of GMA shares in the preceding two months! We do not yet know who was buying.

For more news and expert analysis about Algeria please see Algeria Focus, Sahara Focus and Algeria Politics & Security.

© 2010 Menas Associates

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