27 September 2016
Mineral & Financial Investments Limited
("MAFL" or "the Company")
Unaudited Interim Results for the Six Months Ended 30 June 2016
Mineral & Financial Investments Limited today announces its unaudited interim results for the six months ended 30 June 2016.
· TH Crestgate completes on option for sale of Spanish zinc
· Improved performance of commodity portfolio
· Further acquisitions under consideration
· Continued disposal of legacy assets
Chairman's Statement
The Company realized a net profit of £209,000 during the six months to June 2016, as against a net loss of £137,000 booked during the corresponding period in 2015. 2016. On a per share basis, MAFL generated earnings of 1p per share, as against a loss per share of 1.5p for the corresponding period a year ago.
MAFL's NAV at the end of the period was 7.47 pence, up 14.8% sequentially from the first quarter of this year, when the NAV was 6.5 pence
Post the period end MAFL has also raised equity through the issuance of £475,000 of equity.
We are now essentially debt free, following the repayment of £159,000 of debt in the autumn of 2015. The board is committed to maintaining a strong balance sheet.
We continue to monitor the few legacy investments your board inherited, and now believe that the remaining legacy investments in our portfolio are on steady footing and will be able to progress forward.
UK capital markets were thrown into a maelstrom of uncertainty due to the unexpected "Exit" Brexit vote. The most notable impact on Metals & Mining markets and MAFL is that the weaker British Pound has a buoyed upwards commodity prices in GBP.
Precious metals appear to have found their lows in the first few weeks of 2016. Base metals are a little more mixed - bulk commodities continue to be guided by currency movements, while long neglected commodities such as zinc and lead continue to find new believers in the strong fundamentals underpinning their supply/demand relationship.
Our 49% investment in TH Crestgate GmbH ("TH Crestgate") is beginning to bear fruit. TH Crestgate has successfully sold its Spanish subsidiary, GoldQuest Iberica S.L. (GQI) to Ferrum Crescent Limited ("Ferrum Crescent") for £342,500 in cash and 110 million shares of Ferrum Crescent worth £341,000 for a total of £683,500. The structure will allow MAFL to continue to benefit from the value being created in these assets by Ferrum Crescent, the strengthening of the supply demand outlook for zinc and lead and the very highly prospective geological features of Toral, the most advanced asset of GQI.
On behalf of the Board
Jacques Vaillancourt
Executive Chairman
Chief Investment Officer's Statement
Although it would be premature to trumpet a full recovery in the mining equity markets, there was some evidence of improvement in the sector during the first half of the year as the prices of many commodities came off multi-year lows and companies found markets increasingly open to fundraisings.
That in turn led to some improvement in valuations, although in terms of equities there is still much ground to be made up.
Accordingly the Company maintained a prudent approach to portfolio management during the period, and our investments remained predominantly weighted towards the commodity ETFs and the larger capitalized companies, in particular Glencore.
Our commodity ETFs performed well and we took profits on our zinc position, judging that the company's investment in TH Crestgate, which owns base metals assets in the Iberian peninsula, would allow us continued upside to this metal.
Instead we took a new position in silver and, after this booked useful gains, increased the size of this position.
At the same time we continued our work to solve the legacy issues left by the previous investment manager, most of which have now been resolved. The Company has now disposed of its residual stake in Milamber Holdings, and with the exception of the remaining stake in Sutherland Health is now exclusively focused on the resources sector.
Our biggest holding remains our investment in Cap Energy. MAFL has adopted a conservative approach to the valuation of this holding, which has been set at a near 40% discount to the price at which Cap raised money earlier in the year. MAFL's directors are mindful that this is an unquoted company and the oil markets have shown considerable volatility this year. However, the potential of Cap's West African acreage remains significant and so there remains considerable upside in this holding.
Alastair Ford
Chief Investment Officer
For further information please call:
Mineral & Financial Investments Limited
|
+44 20 3289 9923 |
Katy Mitchell
|
+44 161 832 2174 |
Statement of comprehensive Income
for the 6 months ended 30 June 2016
|
|
UNAUDITED |
UNAUDITED |
AUDITED |
|
|
|
6 months to 30 June 2016 |
6 months to 30 June 2015 |
12 months to 31 December 2015 |
|
|
Note |
£'000 |
£'000 |
£'000 |
|
Continuing operations: |
|
|
|
|
|
Investment income |
|
- |
1 |
2 |
|
Net gains/(losses) on investments |
|
209 |
(137) |
(317) |
|
|
|
|
|
|
|
Total income |
|
209 |
(136) |
(315) |
|
|
|
|
|
|
|
Operating expenses |
|
(69) |
(75) |
(181) |
|
Operating profit/(loss) |
|
140 |
(211) |
(496) |
|
Finance cost |
|
- |
- |
- |
|
|
|
|
|
|
|
Profit/(loss)before taxation |
|
140 |
(211) |
(496) |
|
|
|
|
|
|
|
Taxation expense |
|
- |
- |
- |
|
|
|
|
|
|
|
Profit/(loss)for the period attributable to owners of the Company |
|
140 |
(211) |
(496) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per share attributable to owners of the Company during the period |
3 |
pence |
pence |
pence |
|
Basic: |
|
1.0 |
(1.5) |
(3.6) |
|
Diluted: |
|
1.0 |
(1.5) |
(3.6) |
Statement of Financial Position
as at 30 June 2016
|
|
UNAUDITED |
UNAUDITED |
AUDITED |
|
|
30 June 2016 |
30 June 2015 |
31 December 2015 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
Financial assets |
|
961 |
721 |
691 |
Trade and other receivables |
|
9 |
8 |
6 |
Cash and cash equivalents |
|
137 |
655 |
263 |
|
|
1,107 |
1,384 |
960 |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
Trade and other payables |
|
48 |
46 |
41 |
|
|
48 |
46 |
41 |
NET CURRENT ASSETS |
|
1,056 |
1,338 |
919 |
|
|
|
|
|
NON-CURRENT LIABILITIES |
|
|
|
|
Convertible unsecured loan notes |
|
10 |
169 |
10 |
|
|
10 |
169 |
10 |
|
|
|
|
|
NET ASSETS |
|
1,049 |
1,169 |
909 |
|
|
|
|
|
EQUITY |
|
|
|
|
Share capital |
|
2,885 |
2,882 |
2,885 |
Share premium |
|
4,559 |
4,537 |
4,559 |
Loan note equity reserve |
|
6 |
85 |
6 |
Share option reserve |
|
12 |
12 |
12 |
Capital reserve |
|
15,736 |
15,736 |
15,736 |
Retained earnings |
|
(22,149) |
(22,083) |
(22,289) |
Shareholders' equity |
|
1,049 |
1,169 |
909 |
Statement of Changes in equity
for the 6 months ended 30 June 2016
|
Share capital |
Share premium |
Loan note reserve |
Share option reserve |
Capital reserve |
Accumulated losses |
Total equity |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
At 31 December 2014 |
2,882 |
4,537 |
85 |
12 |
15,736 |
(21,872) |
1,380 |
Loss for the 6 months to 30 June 2015 |
- |
- |
- |
- |
- |
(211) |
(211) |
At 30 June 2014 |
2,882 |
4,537 |
85 |
12 |
15,736 |
(22,083) |
1,169 |
Loss for the 6 months to 31 December 2015 |
- |
- |
- |
- |
- |
(285) |
(285) |
Repayment of loan notes |
- |
- |
(79) |
- |
- |
79 |
- |
Share issues |
3 |
22 |
- |
- |
- |
- |
25 |
At 31 December 2015 |
2,885 |
4,559 |
6 |
12 |
15,736 |
(22,289) |
909 |
Profit for the 6 months to 30 June 2016 |
- |
- |
- |
- |
- |
140 |
140 |
|
|
|
|
|
|
|
|
At 30 June 2016 |
2,882 |
4,537 |
85 |
12 |
15,736 |
(22,149) |
1,049 |
Statement of Cash flow
for the 6 months ended 30 June 2016
|
|
UNAUDITED |
UNAUDITED |
AUDITED |
|
|
6 months to 30 June 2016 |
6 months to 30 June 2015 |
12 months to 31 December 2015 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
Profit/(loss) before taxation |
|
(211) |
(211) |
(496) |
Adjustments for: |
|
|
|
|
Loss on disposal of financial assets |
|
58 |
131 |
131 |
Fair value adjustment to financial assets |
|
(267) |
6 |
186 |
Investment income |
|
- |
(1) |
(2) |
Finance costs |
|
- |
- |
- |
Operating cashflow before working capital changes |
|
(69) |
(75) |
(181) |
(Increase)/decrease in trade and other receivables |
|
(3) |
(5) |
(3) |
Increase/(decrease) in trade and other payables |
|
7 |
6 |
1 |
Net cash outflow from operating activities |
|
(65) |
(74) |
(183) |
INVESTING ACTIVITIES |
|
|
|
|
Purchase of financial assets |
|
(155) |
- |
(151) |
Disposal of financial assets |
|
94 |
132 |
133 |
Investment income |
|
- |
1 |
2 |
Net cash (outflow)/inflow from investing activities |
|
(61) |
133 |
(16) |
FINANCING ACTIVITIES |
|
|
|
|
Redemption of convertible loan notes |
|
- |
- |
(134) |
Net cash outflow from financing activities |
|
- |
- |
(134) |
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents |
|
(126) |
59 |
(333) |
Cash and cash equivalents at start of period |
|
263 |
596 |
596 |
|
|
|
|
|
Cash and cash equivalents at end of period |
|
137 |
655 |
263 |
Notes to the unaudited interim statement
for the 6 months ended 30 June 2016
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 190 Elgin Avenue, George Town, Grand Cayman, KY1-9005, Cayman Islands. The financial statements are presented in Pounds 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 consistence with those set out in the Company's Annual Report and Accounts for the year ended 31 December 2014.
This interim financial information for the six months to 30 June 2016 was approved by the board on 26 September 2016.
The unaudited interim financial information for the 6 months ended 30 June 2016 does not constitute statutory accounts. The comparative figures for the year ended 31 December 2015 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 to 30 June 2016 |
6 months to 30 June 2015 |
12 months to 31 December 2015 |
|
|
£'000 |
£'000 |
£'000 |
|
Weighted average number of shares for calculating basic earnings per share |
14,034,562 |
13,722,062 |
13,874,459 |
|
Weighted average number of shares for calculating fully diluted earnings per share |
14,552,854 |
*13,722,062 |
*13,874,459 |
*The weighted average number of shares used for calculating the fully diluted loss per share for the comparative periods, the 6 months ended 30 June 2015 and the 12 months ended 31 December 2015, is the same as that used for calculating the basic loss per share as the losses in those periods have an anti-dilutive effect.