TIDMPRS
RNS Number : 0398Y
Paternoster Resources PLC
28 February 2017
28 February 2017
PATERNOSTER RESOURCES PLC
"Paternoster" or the "Company"
Quarterly Update to 31 December 2016
Paternoster Resources plc, the AIM quoted investing company
focused on the natural resources sector, is pleased to provide a
quarterly update for the three months to 31 December 2016.
Highlights
-- Net asset value per share was double the share price as at 31 December 2016
-- Total cash held was equivalent to 35% of market capitalisation at the period end
-- Listed investments and cash represented 175% of market capitalisation at the period end
-- Net asset value increased by 2.1% during Q4 2016
-- Net assets increased by 24% during 2016
-- Share price up 10% since 30 September 2016
Nicholas Lee, Chairman of Paternoster, commented:
"The value of Paternoster's portfolio has continued to increase
during the fourth quarter of 2016. Around 90% of its investment
portfolio, which is currently worth around GBP3.65 million, now
comprises cash and listed investments."
The key unaudited performance indicators are set out below.
COMPANY STATISTICS 31 December 2016 30 September Change
2016
-------------------------------- ----------------- ------------ --------
Net asset value GBP3,657,304 GBP3,581,184 2.1%
Net asset value - fully diluted
per share 0.36p 0.353p 2.0%
Closing share price 0.18p 0.163p 10.4%
Share price premium/(discount)
to net asset value (50%) (54%) -
Market capitalisation GBP1,829,894 GBP1,661,137 10.2%
--------------------------------- ---------------- ------------ --------
Category Principal investments Cost or valuation
(GBP)
at 31 December 2016
---------------------- ----------------------------------- ---------------------
Bison Energy Services Limited,
Elephant Oil Limited and
Unlisted/pre-IPO New World Oil and Gas plc 392,149
---------------------- ----------------------------------- ---------------------
Metal Tiger plc, MX Oil plc,
Plutus PowerGen plc, Shumba
Coal Limited, Pires Investments,
Ortac Resources Limited,
Polemos plc and Alecto Minerals
Listed plc 2,564,493
---------------------- ----------------------------------- ---------------------
Investment portfolio 2,956,642
----------------------------------------------------------- ---------------------
Cash resources 633,890
----------------------------------------------------------- ---------------------
Total 3,590,532
----------------------------------------------------------- ---------------------
Since 30 September 2016, the Company's net assets have increased
by a further 2.1%, making a total increase of 24% for 2016. During
Q4, the Company has made new investments in Pires Investments plc,
with an additional investment in Glenwick plc since the year
end.
Plutus PowerGen plc
During the period, the company has been very active. It has
secured debt financing for one of its sites as well as planning
permission for additional sites. Also, the company announced both
the commissioning of its first site and revenue from its first
sales of power; these are significant developments. The company has
also started discussions with a Big Six utility company with a view
to potentially funding new projects. Furthermore, it has also
secured capacity mechanism contracts for three of its sites whereby
each site will receive an additional GBP450,000 of revenue per
annum for 15 years, starting in 2020. The company's recent interim
results showed a profit for the six months to 31 October 2016 -
this represents a milestone in the company's development.
The company's share price has continued to perform well,
increasing from 1.5 pence to 3.0 pence during Q4, albeit finishing
the quarter at 2.6 pence.
Alecto Minerals plc
Alecto Minerals plc ("Alecto") has continued to make progress
towards bringing the 400,000 tonnes per annum open-pit Matala Gold
Project in south-central Zambia into low-cost production in the
near to mid-term. Presidential elections in Zambia in September
2016 resulted in delays to putting in place the requisite vendor
financing with the company's Chinese funding partners, although
commissioning is still expected to take place in 2017. In addition,
some pre-development activities have also started, including ground
clearance for the process plant area, fencing and security gate
construction.
The company has now agreed the final terms of its joint venture
partnership with Ashanti Gold Corp ("Ashanti"), a Toronto Venture
Exchange listed public company, with respect to its Kossanto East
Gold Project in western Mali. Ashanti is now the operator of the
Kossanto East gold project and will fund all exploration and
development works up to and including a preliminary feasibility
study. Kossanto East comprises a single exploration permit covering
66.4 km(2) located in the felsic volcanic rocks between the two
major regional structures, the Main Transcurrent Shear Zone ("MTZ")
and the Senegal-Malian Fault ("SMF"). The project already has an
independent JORC-code compliant inferred mineral resource estimate
of 6.72 Mt grading at 1.14 g/t for an aggregate of 247,000 oz Au
(at a cut-off grade of 0.5 g/t).
Randgold Resources (Mali) Limited's exploration teams have
commenced their new field season activities at Kossanto West. This
includes pitting to check regolith profile and test further
anomalous zones alongside the generation of regional targets that
present potential structure (alteration, lithology and
mineralisation) for a multimillion ounce discovery.
More significantly, on 21 December 2016, the company announced
the proposed acquisition of the Mowana Copper Mine in Botswana
("Mowana"). This constitutes a reverse takeover under the AIM Rules
for Companies and, as a result, the company's shares have been
suspended. The board believes that this will be a transformational
transaction for the company as Mowana is a former producing copper
mine that can be brought back into production at relatively low
cost.
Mowana has a mineral resource inventory of 683,000 tonnes copper
("Cu") in the Measured and Indicated categories (JORC-code
compliant) with an additional 945,000 tonnes Cu in the Inferred
category. It was commissioned in 2008 at a cost of US$60 million.
It operated successfully between 2008-2015, processing an average
of 775,406 tonnes per annum ("tpa") of ore at an average grade of
1.72% copper. In 2013/14, Mowana produced 43,301 tonnes of
concentrate, representing 9,724 tonnes of Cu. A mining contractor,
Giant Transport Holdings Limited, has recently been appointed to
commence mining operations.
The company and its partners have re-modelled the mine to ensure
that it can produce with a much lower cost base to generate profit,
even at depressed commodity prices. At a copper price of US$2.50
per lb, the company's internal estimate for the project's NPV is
US$245 million. Alecto intends to perform process route upgrades,
including the installation of a Dense Media Separation plant to
increase throughput from 1.2 million tpa to 2.6 million tpa to
achieve an average copper production of 22,000 tonnes saleable Cu
per annum. The process route upgrades, which are expected to cost
US$20 million, will be funded through an agreement with Fujax
Minerals and Energy Limited and Northern Heavy Industries Group
Company Limited. Alecto has agreed a 10-year management contract
for Mowana with its partners and will receive management fees equal
to 1.5% of revenue. A GBP1 million convertible loan note has been
issued to raise part of the consideration funding.
New World Oil and Gas plc
This company's shares were cancelled from admission to AIM in
November 2016. The company has a significant investment in the form
of a convertible loan to Big Sofa Technologies Group plc ("Big
Sofa") along with cash resources. Big Sofa was listed on AIM on 19
December 2016 and its share price has performed strongly since
then. The company is currently working on a revised strategy to
deliver a return to shareholders.
Ortac Resources Limited
Since the Company's investment, Ortac Resources Limited
("Ortac") has increased its shareholding in Casa Mining Limited
("CASA") to around 21.25%. CASA is a private company that holds
prospective gold mining and exploration licences in the Democratic
Republic of Congo. CASA holds three contiguous mining licenses
(covering a total 133km(2) ), issued in March 2015 and valid for 30
years. These licences, encompassing a 60km strike length of the
Tanganyika graben within the Rusizian belt or Misisi Corridor,
include the Akyanga deposit along with the Lubitchako, Tulongwe,
Kilombwe and Mutshobwe prospects. It is expected that the Misisi
Gold Project, with over 1 million ounces of gold discovered so far,
has the scope to become a low cost, open pit operation that can be
brought into production quickly.
The company has increased its shareholding in Andiamo
Exploration Limited ("Andiamo") to around 27%, with Andiamo now
anticipating an active 2017 exploration season, subject to the
conclusion of its refinancing which is currently taking place.
Andiamo has recently extended its exploration licence by nearly
100sq km to the south, increasing its land holding over the western
VMS trend. This is where certain VMS targets have already been
identified by the former licence holder, along with a number of
historic targets in the Haykota licence that merit further
investigation. Andiamo has a JORC mineral resource of just under
85,000 near surface gold ounces and 21,000 tonnes of copper at the
Yacob Dewar project. It is in a good location to the South of the
highly successful Bisha mine - which now holds the immediately
adjacent licence to the north of the Haykota licence, where the
Ashelli discovery has been made. Andiamo remains one of the few
independent exploration companies working in this highly
prospective territory.
In Zambia, the company holds an option over 19.35% of Zamsort
Limited, the holder of the Kalaba small-scale mining licence. This
highly prospective large scale exploration licence is located on
the Kabopo Dome, which also hosts First Quantum's Trident Project.
Zamsort is aiming to become a producer of copper and cobalt from
its commercial scale demonstration plant, which is still under
construction. It is anticipated that commissioning of this plant
will take place during the first half of 2017.
In Slovakia, the company continues to pursue the validation of
its licence through existing and new small scale mining
applications. Although the local court has recently revoked an
underground mining permit issued to the company by the Central
Mining Bureau in 2014, Ortac is confident that the Mining Bureau
and Ministry of Economy will reverse this decision. Meanwhile, the
company continues to engage with potential local partners and
assess the alternative gold leaching technologies that are coming
to the market.
Pires Investments plc
Pires Investments plc is an investment company listed on AIM
with a specific focus on the natural resources sector. The company
has recently raised GBP675,000 by way of a placing, and is now well
placed to consider investment opportunities as they arise.
Paternoster currently has a 24.6% shareholding in the company.
Polemos plc
Polemos plc is an investment company listed on AIM with a
specific focus on the natural resources sector. The company has
recently raised GBP495,000 by way of a placing. Going forward, it
is therefore well placed to consider investment opportunities as
they arise. Paternoster will have a 12.8% shareholding in the
company post the issue of new shares as part of the recent
placing.
Glenwick plc
Glenwick plc ("Glenwick") is an investment company listed on
AIM, focused on the natural resources sector. The company has
recently entered into a non-binding heads of terms to acquire 100%
of the share capital of Cora Gold Limited ("Cora Gold"), which will
constitute a reverse takeover ("RTO") under the AIM Rules. Cora
Gold was established in 2016 by Hummingbird Resources plc
("Hummingbird") and Kola Gold Limited ("Kola") to consolidate
certain of Hummingbird's non-core gold exploration permits in Mali,
together with Kola's permits in Mali and Senegal (the "Gold
Portfolio"). The Gold Portfolio comprises 10 highly prospective
gold exploration properties covering more than 1,600 km2 located in
two significant gold areas, the Kenieba Window in Mali and Senegal
and the Yanfolila Gold Belt in Mali.
Currently, Glenwick's principal investment comprises GBP1.1
million of pre-IPO convertible loan notes in i3 Energy Limited
("i3"), an oil and gas company in the process of completing an IPO.
i3 has just acquired a 100% operated interest in the Liberator
field, an oil discovery situated within Block 13/23d of the North
Sea, immediately adjacent to the Blake field and situated 2
kilometres from Blake's producing drill centre. It is expected that
once the IPO of i3 is complete, the convertible loan note will be
converted and shares in i3 will be passed through to the
shareholders of Glenwick. Paternoster will receive a pro-rata
entitlement to the i3 shares on distribution to Glenwick
shareholders. The conversion price is set to be at a 50% discount
to the price at which any new shares in i3 are subscribed for by
investors at the time of the IPO. Paternoster will have a 10.6%
shareholding in the company once the new shares have been
issued.
For more information please contact:
Paternoster Resources plc:
Nicholas Lee, Chairman +44 (0) 20 7580 7576
Nominated Adviser and Joint Broker: +44 (0) 20 7601 6100
Stockdale Securities
Antonio Bossi/David Coaten
Joint Broker: +44 (0) 20 7562 3351
Peterhouse Capital Limited
Lucy Williams
PR:
Cassiopeia Services +44 (0) 7949 690338
Stefania Barbaglio
This information is provided by RNS
The company news service from the London Stock Exchange
END
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