Half Yearly Report

RNS Number : 6596Q

Mineral & Financial Invest. Limited

03 September 2014

 



Mineral & Financial Investments Limited

("MAFL" or "the Company")

Unaudited Interim Results for the Six Months Ended 30 June 2014

Mineral & Financial Investments Limited today announces its unaudited interim results for the six months ended 30 June 2014.

Chairman's Statement

I believe the past six months have shown that the evolved strategy your board has set and that the management team is implementing is beginning to yield positive results. We are still not where we plan to be, but these results can provide some temporary satisfaction to shareholders. Our Net Assets, as of June 30, 2014 have risen 46 per cent from 12 months ago, to £1,377,000. Our cash position continues to be strong at £636,000. This represents 46% of our net asset value.

During the six month period ending June 30, 2014 M&FI generated a net profit of £311,000, equating to a return on equity of 26.8%. We continue to scour the marketplace for opportunities for our shareholders. We believe that we will make our first strategic investment before year-end.

Our strategy remains to invest in, finance and advise junior mining companies. We are seeking to provide capital, after thorough due diligence, to companies that have attractive mineral assets which we believe can progress to production. We will invest meaningfully (5% to 20%), expect our voice to be heard in the boardroom, and be willing to make follow-on investment if and when appropriate. We view ourselves as financial partners, not solely investors to the investee companies.

But until we deploy capital in our first strategic asset we must be highly protective of our capital and liquidity while also generating positive returns for our shareholders.

Mining company investments can be can be thought of as having three key elements: 1. The mineral assets; 2. The financial assets; 3. The human assets.

The cornerstone is an attractive mineral asset. If we can identify mineral assets which meet our criteria then we may consider an investment in a given company. We recognize that the past few years have starved the industry of capital. Capital remains very scarce for the mining industry as a whole.

But we can distinguish M&FI by being both willing and able to invest when few others can or will invest in the sector. This requires patience, discipline, intelligence, and a willingness to roll up our sleeves.

The metal markets continue to appear stable overall, but below the overall averages. Bulk commodities (i.e. iron ore, metallurgical and thermal coal) continue to weaken as slowed demand and slight levels of over-capacity are weighing these commodities down. We are unlikely to alter our position of not investing in the segment for the foreseeable future as we are uneasy about the fundamentals, and the amounts of capital required far exceed our current financial wherewithal.

The copper market has been steady despite a slight slowdown in demand due to production disruptions in Asia constricting global supply. Gold and silver markets appear to be building a base for an advance in 2015, while the PGM segment has performed well due to production disruptions in South Africa. We have been bullish on zinc and nickel markets as certain mines approach the end of their economic lives (at the current prices). Over the next 12 to 18 months the greatest investment opportunities will be in the precious metals segment as well as certain base metals (nickel, tin, lead and zinc).

As central bankers collectively begin releasing their grip on rates, which has kept rates artificially low, we believe that there is likely to be turmoil in capital markets. We are being cautious and vigilant while seeking to position ourselves to benefit from the expected market turbulence.

On behalf of the Board

Jacques Vaillancourt

Chairman

Chief Investment Officer's Statement

Junior mining markets remained depressed during the period, but there was some evidence of renewed strength at the larger end of the market, with majors putting in some impressive gains. As far as the metals were concerned it was a mixed picture, as iron ore weakened, copper fluctuated, gold flatlined and zinc and nickel gained markedly.

Accordingly, Mineral & Financial stuck to its stated strategy of focussing its investments on larger companies and on specific metals, rather than on the juniors. The Company also retained a significant portion of its assets in cash, such that at the period end there was £636,000 on hand, part of an overall investment portfolio valued at nearly £1.6 million.

Perhaps more significantly, the Company returned to profit after several loss-making periods, booking a £311,000 net profit.

During the period Mineral & Financial took positions in BHP Billiton, well-known as one of the world's major diversified miners, and in Independence Group, a mid-tier Australian company with exposure to nickel and gold production. Both investments performed well, with Independence Group in particular rising strongly, by more than 25 per cent. Mineral & Financial therefore took profits on this investment, and is now looking keenly for further opportunities in nickel, which may yet enjoy further strength in the coming months, after a slight recent pull-back.

The Company maintained its ETF positions in gold, platinum, and zinc, with gold steady across the period at around US$1,300 per ounce, platinum stronger by a few per cent on the back of turbulent industrial relations in South Africa, and zinc up markedly by nearly 15 per cent as stockpiles dwindle and the market begins to anticipate supply shortfalls.

Also performing strongly was the Company's long-standing investment in West African oil & gas specialist Cap Energy. Cap Energy is currently evaluating off-shore oil exploration opportunities in conjunction with a partner with considerable industry expertise, and is also anticipating an Aim listing in the near future.

Finally, Mineral & Financial continues to review its positions in its last remaining legacy assets. The Company retains a significant stake in Tern PLC, a technology specialist which is continuing in its efforts to raise new funds for investments. It also holds significant stakes in Milamber Ventures and Sutherland Healthcare. These positions remain under continuous review.

Alastair Ford

Chief Investment Officer

For further information please call:

Mineral & Financial Investments Limited Laurence Read	[phone]
Katy Mitchell W H Ireland	[phone]

Statement of comprehensive Income

for the 6 months ended 30 June 2014

		UNAUDITED	UNAUDITED	AUDITED
		6 months to 30 June 2014	6 months to 30 June 2013	12 months to 31 December 2013
	Note	£'000	£'000	£'000
Continuing operations:
Investment income		-	3	3
Net losses on disposal of investments		(489)	(274)	(450)
Change in fair value of investments		884	(254)	22
Total income		395	(525)	(425)
Operating expenses		(80)	(109)	(225)
Operating profit/(loss)		315	(634)	(650)
Finance cost		(4)	(15)	(13)
Loss before taxation		311	(649)	(663)
Taxation expense		-	-	-
Loss for the period attributable to owners of the Company		311	(649)	(663)
Loss per share attributable to owners of the Company during the period	3	pence	pence	Pence
Basic:		2.3	(5.7)	(5.3)
Diluted:		2.2	(5.7)	(5.3)

Statement of Financial Position

as at 30 June 2014

		UNAUDITED	UNAUDITED	AUDITED
		30 June 2014	30 June 2013	31 December  2013
		£'000	£'000	£'000
CURRENT ASSETS
Financial assets		943	693	469
Trade and other receivables		9	21	16
Cash and cash equivalents		636	486	797
		1,588	1,200	1,282
CURRENT LIABILITIES
Trade and other payables		46	40	55
		46	40	55
NET CURRENT ASSETS		1,542	1,160	1,227
NON-CURRENT LIABILITIES
Convertible unsecured loan notes		165	217	161
		165	217	161
NET ASSETS		1,377	943	1,066
EQUITY
Share capital		2,882	2,859	2,882
Share premium		4,537	4,423	4,537
Loan note equity reserve		85	85	85
Capital reserve		15,736	15,736	15,736
Retained earnings		(21,863)	(22,160)	(22,174)
Shareholders' equity		1,377	943	1,066

Statement of Changes in equity

for the 6 months ended 30 June 2014

	Share capital	Share premium	Loan note reserve	Capital  reserve	Accumulated losses	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000
At 31 December 2012	2,859	4,423	104	15,736	(21,511)	1,611
Loss for the 6 months to 30 June 2013	-	-	-	-	(649)	(649)
Repayment of loan notes	-	-	(19)	-	-	(19)
At 30 June 2013	2,859	4,423	85	15,736	(22,160)	943
Loss for the 6 months to 31 December 2013	-	-	-	-	(14)	(14)
Share issues	23	114	-	-	-	137
At 31 December 2013	2,882	4,537	85	15,736	(22,174)	1,066
Profit for the 6 months to 30 June 2014	-	-	-	-	311	311
At 30 June 2014	2,882	4,537	85	15,736	(21,863)	1,377

Statement of Cash flow

for the 6 months ended 30 June 2014

		UNAUDITED	UNAUDITED	AUDITED
		6 months to 30 June 2014	6 months to 30 June 2013	12 months to 31 December 2013
		£'000	£'000	£'000
OPERATING ACTIVITIES
Profit/(loss) before taxation		311	(649)	(663)
Adjustments for:
Loss on disposal of financial assets		489	274	450
Fair value adjustment to financial assets		(884)	254	(22)
Investment income		-	(3)	(3)
Finance costs		4	14	13
Operating cashflow before working capital changes		(80)	(110)	(225)
(Increase)/decrease in trade and other receivables		7	(4)	1
Increase/(decrease) in trade and other payables		(9)	11	26
Net cash outflow from operating activities		(82)	(102)	(198)
INVESTING ACTIVITIES
Purchase of financial assets		(312)	(90)	(215)
Disposal of financial assets		233	294	743
Investment income		-	3	3
Net cash inflow/(outflow) from investing activities		79	207	531
FINANCING ACTIVITIES
Proceeds from share issues		-	-	137
Redemption of convertible loan notes		-	(251)	(306)
Net cash outflow from financing activities		-	(251)	(169)
Net (decrease)/increase in cash and cash equivalents		(161)	(147)	164
Cash and cash equivalents at start of period		797	633	633
Cash and cash equivalents at end of period		636	486	797

Notes to the unaudited interim statement

for the 6 months ended 30 June 2014

1. General information

The Company is a limited company quoted on AIM 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 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 2013.

This interim financial information for the six months to 30 June 2014 was approved by the board on 1^st September 2014.

The unaudited interim financial information for the 6 months ended 30 June 2014 does not constitute statutory accounts. The comparative figures for the year ended 31 December 2013 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 2013	6 months to 30 June 2012	12 months to 31 December 2012
		£'000	£'000	£'000
	Weighted average number of shares for calculating basic earnings per share	13,722,062	11,435,062	12,393,723
	Weighted average number of shares for calculating fully diluted earnings per share	14,240,354	11,435,062	12,393,723

The diluted loss per share for the comparative periods, the 6 months ended 30 June 2013 and the year ended 31 December 2013, are the same as the basic loss per share as the losses in each period have an anti-dilutive effect.

 

END

 

 

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