Dioro Exploration is a modest-size gold producer from its Frog's Leg project in WA in a 50/50% JV with La Mancha. In addition the company recently purchased the South Kal project from Harmony Gold Mines. This project included 3 years mineable reserves, the Hampton treatment plant. The project is expected to generate cashflows of $52mil at a total cost of $A690/oz. The company has $25mil in cash to help fund the acquisition, however it also intends to spend $10mil on exploration in 2008 to increase the reserves at Frogs Leg.The attached chart would suggest that $1.40 is a technical entry into this stock, but based on the fundamentals, I think $1.20 is more likely to prove the actual support level. Dioro's share of reserves at Frog's Leg stands at just 350,000 oz, though this has been the case for years. Only now the company is making a concerted effort to lift reserves, to give greater confidence to the longevity of its cashflows, such that a greater value can be placed on its shared mine infrastructure. For a further info on Dioro see Google Finance or my discussion forum.
-----------------------------------------Andrew Sheldon www.sheldonthinks.com
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