TIDMMAFL
RNS Number : 7769L
Mineral & Financial Invest. Limited
15 January 2021
MINERAL AND FINANCIAL INVESTMENTS LIMITED
Quarterly Net Asset Value and Operational Update
HIGHLIGHTS:
-- Net Asset Value [1] as of 30 Sept. 2020 was GBP5,568,940, up
4.2% yr/yr from GBP5,346,041 last year.
-- Net Asset Value Per Share (FD) on 30 September 2020 was 15.77p, up 4.1% vs. 15.15p a yr. ago.
-- Volatility in foreign exchange rates weighed down performance by 3.8% this quarter.
-- Precious metal holdings reduced when gold was over
US$2,000/oz, protecting the NAV performance from price
correction.
-- Cash position increased by 68% from previous quarter.
George Town, Cayman Islands - 15 January 2021 - Mineral and
Financial Investments Limited (LSE-AIM: MAFL) ("M&FI", "MAFL"
or the "Company") is very pleased to provide an unaudited quarterly
update of its Net Asset Value and an operational update for the
quarterly period ending 30 September 2020. At the end of the first
quarter the NAV was GBP5,568,940 up 4.2%, from GBP5,346,041 one
year ago. The Net Asset Value Per Share, on 30 September 2020, was
15.77p, up 4.1% from one year ago. Earnings for the first quarter
of fiscal year are GBP95,993, or 0.27p. The Company's working
capital, as of 30 September 2020 was GBP5,628,940 [2] .
The following is a summary of the NAV, updated to include this
unaudited NAV calculation:
2021/ 2020 /
30 Sept 2020 2016
30 Sept 30 Sept 30 Sept 30 Sept
2016 2017 2018 2019 2020 % Change CAGR (%)
Net Asset Value GBP1,558,156 GBP2,387,321 GBP2,358,580 GBP5,346,041 GBP5,568,940 4.2% 38.5%
------------- ------------- ------------- ------------- ------------- ---------- ----------
NAVPS (FD) 6.50p 6.90p 6.75p 15.15p 15.77p 4.1% 24.8%
------------- ------------- ------------- ------------- ------------- ---------- ----------
FTSE 350 Mining
Index 12,713 16,547 17,707 18,135 18,180 0.2% 9.4%
------------- ------------- ------------- ------------- ------------- ---------- ----------
GS Commodity
Index 364.47 399.31 486.28 403.61 350.18 -13.2% -1.0%
------------- ------------- ------------- ------------- ------------- ---------- ----------
Global sentiment and expectations continue to be in, our
opinion, optimistic as measured by the FTSE All-World Equity Index
which stands at 433.74 (12/01/2021) is up 12.62% over the past 3
months. We believe that the full economic impact and ramifications
of the altered corporate and individual practices and consumption
patterns resulting from the global COVID 19 restrictions will be
long lasting and financially disruptive. The debt markets are
reflecting a changed environment - since June 30, 2020 US 10-year
treasury yields have increased by 83.1% to 1.16% (from 0.63%), and
yet the US dollar, as measured by the trade-weighted DXY Index is
down 7.4% in the same period. Additionally, the financial aid being
provided by governments around the world will need to be funded.
This creates a real risk of higher taxes and higher interest rates
which would negatively impact real disposable income. We do not
believe that these issues are fully priced into capital markets.
Nevertheless, we are optimistic that commodity pricing will benefit
from constrained commodity production in 2020, some very modest
global growth in 2021 and a weaker US dollar.
NET ASSET VALUE [3] :
As of 30 September 2020, the unaudited Net Asset Value was
GBP5,568,940, up 4.2% from GBP5,346,041 one year ago, equating to
15.77p per share on a fully diluted basis. Our cash position was up
343% year over year to GBP460,912, while our working capital was
GBP5.63million. Our financial performance was hampered by a 5.2%
appreciation of the GBP versus the USD, while the GBP was up by
6.05% versus the Canadian Dollar on a yr/yr basis. Had currency
exchange rates remained unchanged from levels of our June 30, 2020
year-end our September 30, 2020 NAVPS would have been 16.33p
(+7.9& yr/yr).
TACTICAL PORTFOLIO:
Our tactical portfolio, which we consider to be part of our
treasury, appreciated by 17.1% yr/yr in the period. The Tactical
Portfolio does not include our cash holdings which, as mentioned
above, were up 342.7% yr/yr. The Tactical Portfolio was negatively
impacted by the decline in the market value of the Company's
shareholding in Ascendant Resources (ASND) during the period. The
value of the ASND position has increased by 123% (as at January 13,
2021) since the calculation of this September 30, 2020 NAV.
We used the run up in the price of gold to over $2,000/oz. as an
opportunity to take some profits in our overweighted gold
positions. We will be re-weighting this sector in the near
future.
STRATEGIC PORTFOLIO:
Our Strategic Portfolio appreciated by 2.2% yr/yr, this gain was
muted by the GBP480,000 provision we took against our CAP Energy
holding. Had we maintained our previous valuation of CAP the
Strategic Portfolio, the portfolio would have appreciated by 13.7%
yr/yr. During the hyper-challenging COVID 19 shutdowns of 2020 the
price of oil collapsed, as did the share prices of oil and gas
companies. We felt that it was prudent and appropriate to take the
provision. The price/bbl of Brent has, as of the writing of these
comments, almost fully recovered to the price levels of September
2019. The price of a barrel of Brent in September 2019 was $58, in
September 2020 Brent was around $42/barrel, today it is
$56.25/barrel. When CAP has a financing event which provides us
with an objective valuation metric, we will review our valuation of
CAP accordingly.
Ascendant Resources, the operator of the Lagoa Salgada project,
notified us that it was initiating an exploration on the project
beginning in the autumn of 2020. The exploration program consists
of 7 drill holes and downhole IP surveys which will be completed in
several phases and the results of some of these drill holes were
announced on 13 January 2021. The main objective of the program is
to significantly increase and upgrade tonnage at the copper-rich
South Zone. This is designed to build upon the existing 2.47Mt of
Measured and Indicated resource and 6.09Mt of Inferred resource
delineated in the South Zone as highlighted in the Company's
technical report titled, "Technical Report and PEA for the Lagoa
Salgada Project (Setúbal District), Portugal " dated February 27,
2020 with an effective date of December 19, 2019 (the "Preliminary
Economic Assessment"). The South Zone remains open in all
directions according to geological data collected during the
Company's previous exploration activities. The most southern drill
hole in the South Zone (LS_ST_11) was one of the best holes
encountered, with assays reporting 67.6m true width at a 1.57%
Copper Equivalent ("CuEq") grade. Indications are that the
mineralization is open and expanding southward where the Company's
first drill targets in this program are situated.
We have made two investments in Cerrado Gold, the first at
US$0.42 and subsequently at US$0.50 per share. The last investment
was prior to it successfully acquiring the producing Don Mario Mine
in Argentina. Cerrado is now planning to list in the first quarter
of 2021. We expect that this should generate a meaningful lift in
our Cerrado investment valuation.
Golden Sun continues to progress. It has been in small scale
production. It has received approval from the Costa Rican
government to re-activate its full mining licenses. This is a very
important milestone for Golden Sun. This will allow it to evolve
from its pilot heap leaching activities to more traditional mining
and Carbon In Leach (CIL) extraction methods. More importantly this
should result in higher levels of gold production. The Golden Sun
strategy has long been to go from purchase to full scale production
with minimal outside financing. Our initial investment has
appreciated by 26%, and we expect this to continue.
M&FI is currently reviewing several other investment
opportunities. The directors look forward to providing shareholders
with more information on all the investments, in due course, if
they progress.
FOR MORE INFORMATION:
Jacques Vaillancourt - Mineral & Financial Investments Ltd. +44 780 226 8247
Katy Mitchell and Matthew Chan - WH Ireland Limited +44 207 220 1666
Jon Belliss - Beaufort Securities Limited +44 207 382 8300
Dominic Baretto - Yellow Jersey PR Limited +44 203 004 9512
ABOUT MINERAL AND FINANCIAL INVESTMENTS LIMITED:
Mineral and Financial Investments Limited is a Swiss and Cayman
Island based investment company quoted on AIM, a market of the
London Stock Exchange. M&FI has in excess of 17 investments in
the natural resource sector with the majority in the metals and
minerals. M&FI's Net Asset Value per share (NAVPS) is 15.77p,
as of September 30, 2020. M&FI's NAVPS has risen at a Compound
Annual Growth Rate (CAGR) of 28.2% since December 31, 2016.
[1] All financial results reported for the period are unaudited.
[2] Current Assets of GBP5,769,346 less Current Liabilities of
GBP154,321 = Working Capital of GBP5,628,940.
[3] The NAV calculation is subject to audit and is made on the
basis that the Company has 35,135,395 shares O/S (basic) and
35,465,395 shares O/S (FD) in issue.
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