TIDMPRS
RNS Number : 7235H
Paternoster Resources PLC
12 June 2017
12 June 2017
PATERNOSTER RESOURCES PLC
"Paternoster" or the "Company"
Quarterly Update to 31 March 2017
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 March 2017.
Highlights
-- Net asset value per share was 1.8 times the share price as at 31 March 2017
-- Total cash held was equivalent to 32% of market capitalisation at the period end
-- Listed investments and cash represented 1.4 times market capitalisation at the period end
-- Around 83% of the investment portfolio, which is currently
worth around GBP3 million, now comprises cash and listed
investments
-- GAEA Resources Limited became a major shareholder
Nicholas Lee, Chairman of Paternoster, commented:
"Since 31 December 2016, the Company's net assets have
decreased, principally due to the fall in the Plutus PowerGen plc
("Plutus") share price as a result of uncertainty surrounding the
statement by OFGEM with respect to TRIAD payments to local embedded
power generators. Plutus, however, is confident in its business
model going forward and, since the period end, its share price has
already recovered significantly, increasing by over 25%.
Furthermore, Alecto Minerals plc is expected to come back to the
market shortly having made a transformational acquisition. Also,
through its investment in Glenwick plc, the Company is expected to
receive shares in i3 Energy Limited when it completes its listing
on AIM. We are therefore looking forward to an uplift in net assets
in the short term. Also, during the first quarter, we welcomed a
new major shareholder and expect this relationship to provide
significant benefits to the Company going forward."
The key unaudited performance indicators are set out below.
COMPANY STATISTICS 31 March 2017 31 December Change
2016
-------------------------------- ----------------- ------------ ---------
Net asset value GBP3,057,678 GBP3,657,304 (16.4)%
Net asset value - fully diluted
per share 0.301p 0.361p (16.6)%
Closing share price 0.17p 0.18p (5.6)%
Share price premium/(discount)
to net asset value (44%) (50%) -
Market capitalisation GBP1,728,234 GBP1,829,894 (5.6)%
--------------------------------- ---------------- ------------ ---------
Category Principal investments Cost or valuation
(GBP)
at 31 March 2017
---------------------- ----------------------------------- ------------------
Metal Tiger plc, MX Oil plc,
Plutus PowerGen plc, Shumba
Coal Limited, Pires Investments,
Ortac Resources Limited, Polemos
Listed investments plc and Alecto Minerals plc 1,924,441
---------------------- ----------------------------------- ------------------
Cash resources 555,450
----------------------------------------------------------- ------------------
Cash and listed
investments 2,479,891
----------------------------------------------------------- ------------------
Unlisted investments 522,149
----------------------------------------------------------- ------------------
Total 3,002,040
----------------------------------------------------------- ------------------
Details of some of the developments during the period at certain
of the Company's investments are set out below:
Plutus PowerGen plc
During Q4 2016, the Plutus share price increased from 1.5 pence
to 2.6 pence, however, in Q1 2017 it fell significantly as a result
of the uncertainly surrounding the OFGEM statement regarding TRIAD
payments to local embedded power generators. Given that Plutus
benefits from multiple earnings streams, it believes that its
business model going forward continues to be attractive. It also
has a number of projects in the pipeline that are expected to
deliver additional fees and revenues. Since the period end, the
company's share price has already recovered by over 25%.
Alecto Minerals plc
The company continues to progress the proposed acquisition of
the Mowana Copper Mine in Botswana ("Mowana"). As this constitutes
a reverse takeover under the AIM Rules for Companies, the company's
shares continue to be suspended.
Production at Mowana is now ongoing on a full-time basis
following completion of the first blast on 29 April 2017 and a
successful trial period which saw the company produce saleable
concentrate comprising up to 28% copper ("Cu"). To date, over 1,900
tonnes of copper concentrate have been produced and sold to
Alecto's offtake partner Fujax Minerals and Energy Limited.
A Competent Persons Report ("CPR") on Alecto's African assets
and Mowana has now been completed by Wardell Armstrong
International, representing an important milestone towards the
publication of the admission document required to enable Alecto to
recommence trading on AIM.
The CPR reports a current resource of circa 172Mt at 0.84% Cu,
of which 26Mt sits within two existing pre-stripped 350 metre deep
pits. These pits represent the main areas of current operation. The
company intends to increase production to an annualised rate of
12,000 tonnes Cu in Q3 2017. Production costs are expected to
average US$1.5/ lb over the mine life based on an average
metallurgical recovery of 91%. The CPR reports an NPV of US$87.5
million for the initial 12,000 tonnes Cu production scenario based
on an average copper price of US$2.8/ lb and a discount rate of
10%.
Alongside its current mining activities at Mowana, the company
intends to undertake additional test work over the coming months to
finalise its decision on the installation of a Dense Media
Separation ("DMS") unit. If pursued, this technology is anticipated
to facilitate a significant increase in throughput to 2.6Mtpa to
produce around 23,000 tonnes of Cu per annum by Q3 2018. This will
dramatically enhance the mine economics and increase the project's
NPV to US$245 million. As the company announced in December 2016,
it has conditional funding for a DMS of US$20m. Additional upside
potentially exists by developing an underground operation in the
future to access the rest of the resource, which is located down
dip and along strike from the open pits currently being mined. An
underground operation has the potential to increase the life of
mine to 20 years.
Ortac Resources Limited
In April 2017, the company announced that it has entered into an
agreement to form a joint venture with a Slovakian company to
jointly develop the Sturec Gold Project at Kremnica. The Sturec
project has a reserve of just under 900,000 oz gold equivalent
which has progressed to pre-feasibility stage. Meanwhile, the
process for final validation of the underground mining license, as
announced on 17 March 2017, continues on track.
In May 2017, the company raised GBP2 million before expenses and
invested US$2 million in a convertible loan note issued by Casa
Mining Limited ("CASA"). Following conversion and, including its
existing investment, the company would become CASA's largest
shareholder with around 45%. 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. At CASA's most advanced project, the Akyanga Deposit, SRK
has reported a Mineral Resource within a $1,200/oz gold selling
price and 0.5 g/t Au cut-off grade optimised pit shell. This
comprises an Inferred oxide gold Mineral Resource of 5.5 Mt at a
grade of 1.5 g/t Au for approximately 272 koz of contained metal.
SRK has further reported an Inferred transition gold Mineral
Resource of 16.2 Mt at a grade of 1.8 g/t Au for approximately 927
koz of contained metal.
MDM, in conjunction with SRK, completed a scoping feasibility
study for the Akyanga deposit resulting in an ungeared NPV (8%) and
IRR of $171m and 35% respectively at a $1,300/oz gold price. This
assumes a contract mining scenario with an initial capital cost
estimate of $87.4m and a total operating cost of $628/oz.
Pires Investments plc
Pires Investments plc continues to actively review various
investment opportunities and other strategies to deliver value to
shareholders.
Polemos plc
Polemos plc has recently invested in Oyster Oil and Gas Limited
("Oyster"), a company already listed on the TSX. Oyster currently
operates four blocks in the Republic of Djibouti (100% interest) of
which three blocks are located onshore and one block offshore. It
also operates a 100% working interest in a large onshore block in
the Republic of Madagascar. Oyster is expected to seek a listing on
AIM in the coming months.
Glenwick plc
Glenwick plc ("Glenwick") is continuing to progress the
acquisition of 100% of the share capital of Cora Gold Limited which
would constitute a reverse takeover ("RTO") under the AIM Rules.
Glenwick is not currently listed and so as part of any transaction
would seek admission to AIM.
Furthermore, i3 Energy Limited ("i3") in which it holds GBP1.1
million of pre-IPO convertible loan notes, is seeking to complete
an IPO by the end of Q2. 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
expected to be at a significant discount to the price at which any
new shares in i3 are subscribed for by investors at the time of the
IPO.
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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