Globally, Africa is firmly the last place in which to mine, its ancient geology is not widely understood. They cannot conceive the massive blocks of the Wits Basin. Clay says many South African geologists left the industry during the 1980s because exploration was stagnant. However, many who stayed are doing a fine job, although their findings are not always publicised. If you are to appeal internationally, you have to tell a good story, talk the geology and the ore reserves and learn the market instead of eternally debating what discount rate to apply to the cash flow.
Few projects trade on their net present value, they trade on market perception.
Clay says it is time for change in South Africa. The few local junior companies are having to seek their financing offshore because they cannot do so domestically, but most international investors believe it is dangerous here. They also see foreign exchange control as a serious limitation and the government needs to take heed. We have to compete, but the perception is that the mining industry here is too arrogant to market itself internationally. RMB Resources is assisting in the process of change by advising resource companies to restate their asset base in an international format as well as helping SA's entrepreneurial geologists.