TIDMMAFL
RNS Number : 7875Y
Mineral & Financial Invest. Limited
08 March 2017
MINERAL & FINANCIAL INVESTMENTS LIMITED
("Mineral & Financial", "MAFL", or the "Company")
NET ASSET VALUE UPDATE
HIGHLIGHTS
-- NAV of 6.25p (unaudited)
-- TH Crestgate drilling progressing
-- Results expected shortly
-- Gains in equity portfolio
-- ETFs weaken on lower precious metals prices
MAFL, the AIM quoted resources Investment Company, today
announces an NAV and operations update on its activities for the
period ended 31(st) December 2016.
CHAIRMAN'S STATEMENT
This Net Asset Value (NAV) statement covers the quarter ending
December 31, 2016. This period was affected by the volatile
performance resulting from the election of Donald Trump and the
impact of a summer fund raise by the Company which increased the
number of shares in issue by 10,000,000 ordinary shares.
We believe the global economic backdrop continues to improve
modestly, but steadily. The outlook for 2017, as forecasted by the
IMF, indicates that the global economic activity in 2017 should
increase by +3.4%, an improvement from the 2016 performance of
+3.1% growth. The future performance of the resource sector will
increasingly be determined by the economic activity outside the
United States. However, for the foreseeable future most commodities
markets will continue to price commodities in US dollars. If the
USD rises, all things being equal, it should cause a decline of the
USD price of commodities. During the period there was a rise in
value of the USD resulting from the hoped-for economic reforms from
a Trump administration. This USD appreciation partially masked the
continuing fundamental improvements for metals generally.
The valuation approach to our investment portfolio continues to
be very prudent. In our opinion 2016 has been a very successful
year for M&FI. Our stated NAV is up 63.8%, year over year, to
$1,494,360. During the period we raised capital by issuing
10,000,000 ordinary shares and that has slowed the progress of per
share NAV to 6.25 pence, as at December 31, 2016.
Our focus on cost control remains constant. During the first 9
months of the year, our Administration costs were GBP196,210, of
which transaction-specific legal costs were GBP43,792. Excluding
the extraordinary legal costs our administrative costs would be
down 11.2% Yr./Yr. The valuation of the non-public investments in
our portfolio is at cost, or at a level that we feel highly
confident we could realize a prompt monetization of the investment.
Nevertheless, we believe that until we realize on investments, we
prefer to adopt a cautious and understated approach.
Our first Strategic Investment is in TH Crestgate Gmbh, a
private Swiss investment company which we have financed by
purchasing 49% of its equity and have subsequently provided it
additional capital through Loan Notes. TH Crestgate has sold two of
its projects to Ferrum Crescent (FCR), an Australian and LSE-AIM
listed company. The proceeds from this sale were partly in cash,
from which TH Crestgate fully recouped its outlays, with the
remainder comprising 109.5 million shares of FCR. We understand
these net proceeds significantly exceed the net cost of TH
Crestgate's investment in these Spanish assets.
The cash from the sale of the Spanish assets has been used to
finance the development of a Portuguese project called Lagoa
Salgada. To summarize TH Crestgate's activities over the 12 months,
it:
1. Re-negotiated title terms with the Portuguese government;
2. Recapitalized Lagoa Salgada's holding company - Redcorp Empreedimentos Lda.;
3. Repaid Redcorp's creditors;
4. Completed a petrographic study on the Lagoa Salgada project
highlighting the presence of abnormally high levels of indium in
the evaluated ore zones (Note: Indium is a mineral used in touch
screens and flat televisions technologies as well as solar panels.
Indium currently sells for US$570,000 per/tonne);
5. Completed a geo-physical work program;
6. Re-assayed holes in the "Central Sector", which lies 1km SE
of the LS-1 zone which hosts the 4.5 M/t preliminary resource) and
intersected 93 meters of 2.85% copper equivalent ore, and;
7. TH Crestgate is currently completing a 1800m drill program on the Central Sector.
The results of the drilling program should be available within
the next couple of weeks. As the assay results become available we
will issue a press release with the details. TH Crestgate's
objective remains to seek a partner who would spearhead the
project, allow for the recognition of the some of the value that
has been created, and ensure that TH Crestgate and M&FI's
shareholders benefit from the future value accretion of the Lagoa
Salgada project.
During the period we have made some personnel changes, adding
Sean Keenan, a geologist by training, and investment banker and
private equity financier by experience to your Board of Directors.
Additionally, Alastair Ford's title has been changed to Chief
Operating Officer better to reflect his activities and
responsibilities within the Company.
Mineral pricing will continue to benefit from the lack of
exploration capital deployed over the past 5 years. We believe that
2017 will be a year of significant progress for the company as we
begin to harvest the rewards of some of the investment decisions it
has made over the past 18 months and deploy the new capital which
we have raised.
Jacques Vaillancourt, CFA
CHIEF OPERATING OFFICER'S STATEMENT
Market conditions showed continued improvement during the final
quarter of the year, and as 2017 has got underway confidence in the
mining sector continues to rise, albeit with a healthy dose of
caution thrown in.
It was interesting that the mood at the Indaba mining conference
this year was broadly positive, but that news-flow coming out of
the event remained at fairly modest levels, unlike the frenzy of
announcements we have witnessed in boom years.
The company's own Net Asset Value declined marginally across the
period to 6.25p, which was disappointing, and was largely a
reflection of a slight weakening in previous metals prices and a
consequent modest downgrading in the valuation of our gold, silver
and platinum ETFs.
Since the end of 2016, gold, silver, and platinum prices have
all improved in the face of the interesting mixture of uncertainty
and optimism that surrounds Donald Trump's agenda.
We expect Mr Trump's bullish approach to almost everything to
continue to rub off on the mining markets, at least for the next
couple of quarters, and would anticipate continued strength in the
zinc price too - zinc being the strategic metal at the heart of our
49% stake in TH Crestgate.
Meanwhile, our small equity portfolio continues to make gains.
During the quarter in question the valuation of our holding in
Glencore rose by more than 20%, while the increase in the value of
our holding in Anglo Pacific ran to just over 13%.
We continue to value our sizeable stake in Cap Energy at a
significant discount to the price at which the company last raised
money, and will keep that valuation under review.
Alastair Ford
For more information:
Katy Mitchell, WH Ireland +44 161 832 2174
Alastair Ford, Director +44 20 3289 9923
Notes: The net asset value calculation is subject to audit and
is made on the basis that the Company had 24,034,562 shares in
issue at the end of the period in question. All listed investments,
including investments on ISDX, are valued at the closing bid price
as at 31(st) December 2016. The Company has an investment in one
unquoted gold company that is currently valued at the price at
which the gold company in question last raised money, although this
is subject to review. The Company also has an investment in one
unquoted zinc and base metals company, the valuation of which is
subject to quarterly review and is currently recognized at
cost.
This information is provided by RNS
The company news service from the London Stock Exchange
END
NAVUBUNRBOAORAR
(END) Dow Jones Newswires
March 08, 2017 02:01 ET (07:01 GMT)
Mineral & Financial Inve... (LSE:MAFL)
Historical Stock Chart
From Apr 2024 to May 2024
Mineral & Financial Inve... (LSE:MAFL)
Historical Stock Chart
From May 2023 to May 2024