Ausdrill's African adventure

By Intelligent Investor · 23 Apr 1999

By Intelligent Investor ·
23 Apr 1999

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Ausdrill Limited - ASL

Current price

$2.26 at 16:05 (25 October 2019)

Price at review

$0.49 at (23 April 1999)

All Prices are in AUD ($)

With roots in Western Australia, drill and blast contractor Ausdrill is expanding internationally having established beachheads in South America and Africa. The downturn in the industry has seen a rationalisation of the group's activities in West Africa and further expansion of the Tanzanian operations will be through a joint venture with Eltin Mining, soon to be part of the merged Henry Walker Eltin group.

A recent placement of 7 million shares to raise $3.3m will help fund the group's share of the start up costs and expansion program of the jointly owned African Mining Services (Tanzania) Pty Ltd, in which Ausdrill holds a 40% interest. This shares the risk of embarking on another offshore adventure and is a good combination of skills.

We haven't reviewed Ausdrill before but will now keep it on our list of stocks that offer leverage to a mining sector revival. Because investors are always looking ahead, share prices turn well before a fundamental turnaround in the businesses is apparent, a case of looking across the valley to the other side, although bottom fishing remains a dangerous pastime. That said, subscribers already invested in the stock should continue to HOLD while others should wait a while yet.

IMPORTANT: Intelligent Investor is published by InvestSMART Financial Services Pty Limited AFSL 226435 (Licensee). Information is general financial product advice. You should consider your own personal objectives, financial situation and needs before making any investment decision and review the Product Disclosure Statement. InvestSMART Funds Management Limited (RE) is the responsible entity of various managed investment schemes and is a related party of the Licensee. The RE may own, buy or sell the shares suggested in this article simultaneous with, or following the release of this article. Any such transaction could affect the price of the share. All indications of performance returns are historical and cannot be relied upon as an indicator for future performance.

Ausdrill's African adventure

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Ausdrill's African adventure

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