TIDMMAFL
RNS Number : 0338U
Mineral & Financial Invest. Limited
31 March 2021
Mineral & Financial Investments Limited
Interim Results (unaudited) for the Six Months Ended 31 December
2020
HIGHLIGHTS:
-- Unaudited fully diluted net earnings for the first 6 months
of the fiscal 2021 period were 0.6p per share, compared to 0.7p for
the same period last year.
-- NAV per share at 31 Dec 2020 up 6.0% vs. same period last year, to 16.1p
-- The 5 Year Compound Annual Growth Rate (CAGR) of the NAV per share is 26.7%
-- M&FI has outperformed the FTSE 350 Mining Index and GSCI during the past 5 years
-- Strong Improvement in Sterling neutralized GBP435K of NAV gains in the period
-- Company is debt free, with a good cash balance and a strong Working Capital position
GEORGE TOWN, CAYMAN ISLANDS, March 31, 2021 - Mineral and
Financial Investments Limited (LSE-AIM: MAFL) ("M&FI" or the
"Company") is very pleased to announce its unaudited interim
results for the six months ended 31 December 2020.
CHIEF EXECUTIVE OFFICER'S STATEMENT:
The Company generated a profit after-tax of GBP207K and a fully
diluted EPS gain of 0.6p per share compared to a profit after-tax
of GBP247K and a fully diluted EPS gain of 0.7p per share for the
same period last year. The NAV per share increased 6.0% from 31
December 2019 to 16.1p or GBP5,681K, a new high for M&FI.
The Company has increased its cash position to GBP578,000. The
NAV growth was negatively affected by a corrective phase in
precious metal prices and continued strength of the GBP versus the
USD in the period. Although we reduced our precious metals
weightings in the Tactical Portfolio, we did retain certain
holdings which corrected along with the price of gold and silver.
Additionally, the British Pound was up 10.1% versus the US Dollar
in the past six months, since our most recent year end (30 June
2020). Virtually all of our investments are directly, or
indirectly, valued in US dollars and we report in British Pounds,
thus the strong performance of the British Pound has caused
significant headwinds to our NAV performance. Had the GBP remained
unchanged from 30 September 30, 2020 our NAV would have been
GBP250K higher, and had the June 30, 2020 Currency levels been
maintained our NAV would be GBP435K higher.
One year ago, we stated that we remained optimistic that zinc
markets would recover from the anaemic price levels of US$1,800/t
reached in March of 2020. They have since reached US$2,900/t in
February 2021. Additionally, and importantly, spot Tolling Charges
(TC) at zinc refineries are down from a high of $300/t in February
2020 to US$65/t [1] in February 2021eriod due to a reduction on
zinc production from China resulting in refineries scrambling to
meet their capacity. These are all positives for our investment in
zinc, particularly Redcorp, Ascendant and our recent investment in
Rathdowney Resources. Ascendant and Redcorp (M&FI own 75%)
continue to make progress on the Lagoa Salgada project, and they
are completing a drilling program which should lead to drill
results being available in the next 6 to 8 weeks.
Your company's portfolio is overweight in precious metals. As
mentioned above, we reduced our weighting in the sector, but did
not eliminate entirely and thus our performance was negatively
affected by the correction in the gold price from the highs of
US$2,068/oz. We have begun adding back to our precious metal
holdings after the price of gold pierced through the 1,700/oz
level.
The following is a summary of the NAV, updated to include the
unaudited NAV calculation:
31 Dec 31 Dec 30 Jun 30 Jun 31 Dec 31 Dec CAGR (%)
2016 2017 2018 2019 2019 2020
FYE FYE FYE FYE Q2 Q2 2020/2016
-------- --------
NET ASSET VALUE (NAV)
(,000) GBP1,494 GBP2,603 GBP2,623 GBP5,114 GBP5,361 GBP5,681 39.6%
-------- -------- -------- -------- -------- -------- ----------
NAV Per Share (FD) 6.2p 7.4p 7.5p 14.5p 15.2p 16.1p 26.7%
-------- -------- -------- -------- -------- -------- ----------
FTSE 350 Mining Index 14,799 18,719 18,877 20,688 19,049 21,699 10.0%
-------- -------- -------- -------- -------- -------- ----------
Goldman Sachs Commodity
Index 398.20 442.44 487.44 425.36 439.58 409.46 0.7%
-------- -------- -------- -------- -------- -------- ----------
Tactical Portfolio:
The purpose of the Tactical Portfolio is to allow M&FI
flexibility to take advantage of short-term opportunities across
asset classes in high quality names, whilst remaining liquid enough
to deploy working capital in attractive investment opportunities
when available. We took a firmly positive view on gold in early
2018. Any changes in our tactical holdings in precious metals are
trading decisions around our long-term bullish attitude towards
precious metals - which remains unaltered.
Our largest tactical holding is Barrick Gold, which is amongst
the largest gold producers in the world. The value of our holding
was down 22.6% in GBP, but only down 12.5% in USD. We initiated the
position subsequent to the announced merger/acquisition of Randgold
Resources. The acquisition of Randgold necessitated its removal
from the FTSE indices, we understand that many institutional
investors framed by investment mandate restrictions were forced to
divest of their positions which we believe resulted in abnormal
selling pressure. We believe that Barrick continues to improve its
operations under the strong leadership of its new CEO, formerly of
Randgold will continue to drive operational and strategic
efficiencies resulting improvement relative to its history and that
of its peers.
Also, part of Tactical Portfolio is Ascendant Resources. We are
pleased to see the shares doubling in value in the quarter after
Ascendant completed a financing. Additionally, Ascendant announced
an update to their resource which aided in the upward valuation of
the company. We made a small investment in a company called
Rathdowney Resources Ltd. It is a Canadian exploration/development
company with an inferred resource of 24.4Mt with a Zinc Equivalent
grade of 7.02% (5.53% Zinc; 1.49% Lead) at a project in Poland
called Olza.
We were, and continue to be, concerned that there is a
disconnect between overall equity market performance and the
economic performance. As a defensive move to protect we initiated a
copper put position which was meant as a hedge against broad market
corrections. We believe that the concept was sound, but the timing
was poor. We have since flattened the position, but it negatively
affected performance in the period.
The Tactical Portfolio, as of December 31, 2020, includes:
Company Development Type of Security Primary Commodity Geographic Area
Stage of Activities
Ascendant Resources Exploration Common Equity Zn, Pb, Cu, Portugal
Au, Ag
----------------- ----------------- ------------------- --------------------
Barrick Gold Production Common Equity Gold, Copper Global
----------------- ----------------- ------------------- --------------------
Resolute Mining Production Common Equity Gold W.Africa, Australia
----------------- ----------------- ------------------- --------------------
ZKB Gold ETF Metal ETF Gold N/M
----------------- ----------------- ------------------- --------------------
ZKB Silver ETF Metal ETF Silver N/M
----------------- ----------------- ------------------- --------------------
Barclays Bank Food Commodities Derivative Food Commodities N/M
----------------- ----------------- ------------------- --------------------
IamGold Corporation Production Common Equity Gold Canada, West
Africa, South
America
----------------- ----------------- ------------------- --------------------
Wisdom Tree Metal Derivative Copper N/M
----------------- ----------------- ------------------- --------------------
Rathdowney Resources Development Common Equity Zinc/Lead Poland
----------------- ----------------- ------------------- --------------------
Draegerwerk Production Common Equity Medical & Global
AG Safety Technology
----------------- ----------------- ------------------- --------------------
UBS Gold Metal ETF Gold N/M
----------------- ----------------- ------------------- --------------------
Strategic Portfolio:
After the period end, we were pleased to announce the resource
update at Lagoa Salgada South which is operated by Ascendant
Resources and our 75% owned investee Redcorp Empreedimentos
Mineiros Lda. (Redcorp) (see announcement dated 3 March 2021). The
new Mineral Resource Estimate was prepared in accordance with
Canadian National Instrument 43-101 ("NI 43-101") by Micon
International (Micon) and resulted in a significant upgrade and
expansion of the resources at the South Zone at the Lagoa Salgada
Volcanogenic Massive Sulphide ("VMS") Project. The South Zone is
less than 700m from the North Zone. The Lagoa Salgada North Zone
hosts a zinc rich Measured and Indicated resource of 10.334M tonnes
(using 2.9 % cut-off grade) at an Avg ZnEq [2] grade of 9.06% and
an Inferred resource of 2.502M tonnes (using a 2.8% cut-off grade)
grading 5.93% ZnEq(2) (See RNS of January 14, 2020).
Golden Sun Exploration (Golden Sun) has succeeded in the
re-instatement of its mining licences, which it voluntarily
suspended 5 years ago, through application to the Costa Rican
government. This licence re-instatement was a cornerstone of the
business plan and will allow Golden Sun to expand its production
from the self-funding "pilot plant' phase of production to a staged
expansion and resumption of full mining and processing at the
BellaVista Mine, located in West Central Costa Rica. Furthermore,
we understand Golden Sun has built up a growing level of local and
governmental support due to its operations and stakeholder
engagement. This has resulted in Golden Sun being seen as an
acceptable mine operator in environmentally sensitive Costa Rica.
Due in large part to Golden Sun's status, exploration subsidiary
Terra Sun, has secured the exploration rights from the government
to a nearby project called Libano, which had been a Newmont Gold
project. Additional exploration projects which have failed to meet
work commitments expected by the Costa Rican Government are being
reviewed by Golden Sun. Operationally, heap leach recoveries have
been below target due to insufficient grind size and oxygenation,
which management is addressing.
The Strategic Portfolio allows M&FI to assess the three key
fundamentals to a successful investment in the sector: management,
finance and geology. We can change the first two of these and so we
exercise in depth due diligence on geology. As such we are
constantly reviewing potential investments filtering through the
many underfunded projects left struggling by 10yrs of
underperformance. The Board continues to like zinc and gold which
is well represented in both portfolios and is reviewing investments
in other commodities, notably copper, with the potential to
outperform.
The Strategic Portfolio, as at December 31, 2020, includes:
Company Development Type of Security Primary Commodity Geographic Area
Stage of Activities
Redcorp Empreedimentos Exploration Common Equity Zn, Pb, Cu, Portugal
Mineiros Lda. Au, Ag
--------------- ----------------- ------------------ -----------------
Cap Energy Exploration Common Equity Oil & Gas Senegal & Guinea
Bis.
--------------- ----------------- ------------------ -----------------
Cerrado Gold Production Common Equity Gold Argentina /
/ Exploration Brazil
--------------- ----------------- ------------------ -----------------
Golden Sun Mining Production Convertible Gold Costa Rica
loan
--------------- ----------------- ------------------ -----------------
Ideon Technologies Development Common Equity Mineral Explo. Global
Tech.
--------------- ----------------- ------------------ -----------------
The directors look forward to providing shareholders with more
information on all the investments, in due course if they progress.
Several of these opportunities are private.
On behalf of the Board
Jacques Vaillancourt
FOR MORE INFORMATION:
Jacques Vaillancourt, Mineral & Financial Investments Ltd. +44 777 957 7216
Katy Mitchell and Matthew Chan, WH Ireland Limited +44 207 220 1666
Jon Belliss, Novum Securities Limited +44 207 399 9400
Dominic Baretto - Yellow Jersey PR Limited +44 203 004 9512
Statement of comprehensive Income
for the 6 months ended 31 December 2019
UNAUDITED UNAUDITED AUDITED
6 months 6 months 12 months
to to to
31 December 31 December 30 June
2020 2019 2020
Note GBP'000 GBP'000 GBP'000
------------------------------------ ------ ------------- ------------- ------------
Continuing operations:
Investment income 2 1 3
Net gains on investments 372 399 723
Total income 374 400 726
Operating expenses (152) (144) (321)
Other gains and losses (4) (9) (24)
-------------------------------------------- ------------- ------------- ----------
Profit before taxation 218 247 381
Taxation expense (11) - (28)
-------------------------------------------- ------------- ------------- ------------
Profit for the period attributable
to owners of the Company 207 247 353
Earnings per share attributable
to owners of the Company during pence pence pence
the period 3
Basic: 0.6 0.7 1.0
Diluted: 0.6 0.7 1.0
-------------------------------------------- ------------- ------------- ------------
Statement of Financial Position
as at 31 December 2020
UNAUDITED UNAUDITED AUDITED
31 December 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
---------------------------------- ------------ ------------ ---------
CURRENT ASSETS
Financial assets 5,311 5,105 5,315
Trade and other receivables 81 70 81
Cash and cash equivalents 578 364 275
----------------------------------- ------------ ------------ ---------
5,918 5,539 5,671
---------------------------------- ------------ ------------ ---------
CURRENT LIABILITIES
Trade and other payables 156 126 127
Convertible unsecured loan notes 10 10 10
----------------------------------- ------------ ------------ ---------
166 136 137
---------------------------------- ------------ ------------ ---------
NET CURRENT ASSETS 5,752 5,403 5,534
----------------------------------- ------------ ------------ ---------
NON-CURRENT LIABILITIES
Deferred tax provision (71) (42) (60)
NET ASSETS 5,681 5,361 5,474
----------------------------------- ------------ ------------ ---------
EQUITY
Share capital 3,096 3,095 3,096
Share premium 5,892 5,886 5,892
Loan note equity reserve 6 6 6
Share option reserve 23 23 23
Other reserves 15,736 15,736 15,736
Retained earnings (19,072) (19,385) (19,279)
----------------------------------- ------------ ------------ ---------
SHAREHOLDERS' EQUITY 5,681 5,361 5,474
----------------------------------- ------------ ------------ ---------
Statement of Changes in equity
for the 6 months ended 31 December 2020
Share
Share Share Loan note option Other Accumulated Total
capital premium reserve reserve reserves losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- -------- --------- -------- --------- ----------- -------
At 30 June 2019 3,095 5,886 6 23 15,736 (19,632) 5,114
-------------------- -------- -------- --------- -------- --------- ----------- -------
Profit for the 6
months to
31 December 2019 - - - - - 247 247
-------------------- -------- -------- --------- -------- --------- ----------- -------
At 31 December 2019 3,095 5,886 6 23 15,736 (19,385) 5,361
Profit for the 6
months to
30 June 2020 - - - - - 106 106
-------------------- -------- -------- --------- -------- --------- ----------- -------
Share issues 1 6 - - - - 7
-------------------- -------- -------- --------- -------- --------- ----------- -------
At 30 June 2020 3,096 5,892 6 23 15,736 (19,279) 5,474
-------------------- -------- -------- --------- -------- --------- ----------- -------
Profit for the 6
months to
31 December 2020 - - - - - 207 207
-------------------- -------- -------- --------- -------- --------- ----------- -------
At 31 December 2020 3,096 5,892 6 23 15,736 (19,072) 5,681
-------------------- -------- -------- --------- -------- --------- ----------- -------
Statement of Cash flows
for the 6 months ended 31 December 2020
UNAUDITED UNAUDITED AUDITED
6 months 6 months 12 months
to to to
31 December 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
----------------------------------- ------------- ------------- ----------
OPERATING ACTIVITIES
Profit/(loss) before taxation 218 247 381
Adjustments for:
Net gains on investments (372) (399) (723)
Investment income (2) (1) (3)
Tax paid - - (10)
------------------------------------ ------------- ------------- ----------
Operating cashflow before working
capital changes (156) (153) (355)
(Increase)/decrease in trade
and other receivables 52 8 (3)
Increase/(de crease) in trade
and other payables 29 38 39
------------------------------------ ------------- ------------- ----------
Net cash outflow from operating
activities (75) (107) (319)
------------------------------------ ------------- ------------- ----------
INVESTING ACTIVITIES
Purchase of financial assets (906) (474) (1,279)
Disposal of financial assets 1,282 720 1,639
Investment income 2 1 3
Net cash (outflow)/inflow from
investing activities 378 247 363
------------------------------------ ------------- ------------- ----------
FINANCING ACTIVITIES
Proceeds of share issues - - 7
------------------------------------ ------------- ------------- ----------
- - 7
----------------------------------- ------------- ------------- ----------
Net increase/( decrease) in
cash and cash equivalents 303 140 51
Cash and cash equivalents at
start of period 275 224 224
C ash and cash equivalents at
end of period 578 364 275
------------------------------------ ------------- ------------- ----------
Notes to the unaudited interim statement
for the 6 months ended 31 December 2020
1. General information
The Company is a limited company quoted on AIM, a market of the
London Stock Exchange, and is registered in the Cayman Islands.
The address of its registered office is One Nexus Way, Camana
Bay, Grand Cayman , KY1-9005, Cayman Islands . The financial
statements are presented in Pound s Sterling which is the Company's
functional and presentational currency.
2. Basis of preparation
The interim financial statements of Mineral & Financial
Investments Limited have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted by
the European Union (EU) and on the historical cost basis using the
accounting policies which are consistent with those set out in the
Company's Annual Report and Accounts for the year ended 30 June
2020.
This interim financial information for the 6 months to 31
December 2020 was approved by the board on 30 March 2021.
The unaudited interim financial information for the 6 months to
31 December 2020 does not constitute statutory accounts. The
comparative figures for the year ended 30 June 2020 are extracted
from the statutory financial statements which contain an
unqualified audit report.
3. Earnings per share
The basic and diluted earnings per share is calculated by
dividing the profit/(loss) attributable to owners of the Company
by the weighted average number of ordinary shares in issue
during the year.
6 months 6 months 12 months
to to to
31 December 31 December 30 June
2020 2019 2020
GBP'000 GBP'000 GBP'000
------------------------------- ------------- ------------- -----------
Weighted average number of
shares for calculating basic
earnings per share 35,135,395 35,037,895 35,080,784
Weighted average number of
shares for calculating fully
diluted earnings per share 35,192,285 35,064,391 35,146,295
------------------------------- ------------- ------------- -----------
4. The interim report is available to view and download from the
Company's website: www.mineralandfinancial.com
[1] Wood Mackenzie & BMO Capital Markets
[2] ZnEq% = ((Zn Grade*25.35)+(Pb Grade*23.15)+(Cu Grade *
67.24)+(Au Grade*40.19)+(Ag Grade*191.75))/25.35
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR MZGFFLGRGMZM
(END) Dow Jones Newswires
March 31, 2021 02:00 ET (06:00 GMT)
Mineral & Financial Inve... (LSE:MAFL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Mineral & Financial Inve... (LSE:MAFL)
Historical Stock Chart
From Apr 2023 to Apr 2024