TIDMMAFL
RNS Number : 3911W
Mineral & Financial Invest. Limited
21 December 2021
Mineral and Financial Investments Limited
Audited Full Year Financial Results for Period ended 30 June
2021
and Net Asset Value Update [1]
HIGHLIGHTS
-- Audited year-end Net Asset Value GBP6,438,000 up 17.6%, from
GBP5,474,000 for the same period last year
-- Net Asset Value Per Share ("NAVPS") fully diluted (FD)
18.22p, up 17.5%, from 15.5p in FY 2020
-- NAVPS FD has increased at compound annual growth rate (CAGR) of 26.8% since 30 June 2017
-- Net Asset Value has increased at CAGR of 27.4% since 30 June 2017
-- Investment Portfolio now totals GBP5,822,000 up 9.5% during
past 12 months, from GBP5,315,000.
-- NAVPS performance exceeds that of the FTSE 350 Mining and
Goldman Sachs Commodity Indices since 2017
Camana Bay, Cayman Island - 21 December 2021 - Mineral &
Financial Investments ("M&FI" or the "Company")) , the AIM
quoted resources investment company, is very pleased to announce
its Net Asset value and audited fiscal year update on its
activities for the 12 months ended 30 June 2021
NET ASSET VALUE
Net Asset Value ('000) GBP2,443 GBP2,623 GBP5,114 GBP5,474 GBP6,438 27.4%
--------- --------- --------- --------- --------- ------
Fully diluted NAV per
share 7.05p 7.49p 14.50p 15.50p 18.22p 26.8%
--------- --------- --------- --------- --------- ------
Goldman Sachs Commodity
Index [2] 373.4 487.4 425.4 325.5 535.9 9.5%
--------- --------- --------- --------- --------- ------
FTSE 350 Mining Index(2) 14,671 18,877 20,688 17,714 22,207 10.9%
--------- --------- --------- --------- --------- ------
CHAIRMAN'S STATEMENT
In this, my first Statement to you as Chairman of M&FI, I
would like to thank the board and management for the work,
cooperation and results achieved during a challenging year. Mineral
& Financial Investments Limited ("M&FI") is an active
investing company working to provide our shareholders with
significant returns by leveraging our in-house expertise to provide
investment capital to finance modern, responsible mining companies
and exploration projects globally. We focus on global metals market
trends to take advantage of changes in metal markets and only
invest in favourable jurisdictions with proven management teams. We
will seek to provide financing and act as a good partner in
exchange for meaningful ownership levels in public or private
companies, and board representation or active oversight, if needed
and appropriate. We will provide advisory services to add value
when possible and will be willing to make follow-on investments in
the investee companies if milestones are achieved. The full details
of our investing policy are set out in the Directors' Report on
page 13 of the M&FI 2021 Annual Report.
During the twelve-month fiscal period ending 30 June 2021 the
Company generated net trading income of GBP1,362,000 which
translated into a net profit of GBP964,000 or 2.72p Fully Diluted
(FD) per share for the period. At the period end of 30 June 2021,
the Company's Net Asset Value (NAV) was GBP6,438,000, an increase
of 17.6% from the 30 June 2020, NAV of GBP5,474,000. The Net Asset
Value per Share - fully diluted (NAVPS-FD) as of 30 June 2021 was
18.22p up from the 15.5p NAVPS FD achieved in the previous fiscal
period. Since 30 June 2016, the Company's NAV has increased on
average by 43% annually. We continue to be effectively debt free,
with working capital of GBP6.5M.
I believe M&FI's investment performance during this
extraordinary and challenging year was satisfying in absolute
terms, but also in relative terms. We continue to outperform the
relevant internal Key Performance Indicators that we measure our
performance against. Since 30 June 2017 the NAV per share of
M&FI has grown at compound annual growth rate (CAGR) of 26.8%
per year. The FTSE 350 Mining Index has grown by a CAGR of 10.9%
during the comparable period, while the Goldman Sachs Commodity
Index appreciated by a CAGR of 10.9% for the comparable period. We
believe that the next 12 months will no less challenging, we
believe that we are well positioned for the upcoming year and will
do all within our abilities to meet our internal expectations, and
those of our shareholders.
M&FI continues seek suitable strategic investment
opportunities that we believe will generate above average returns
while adhering to our standards of diligence. We thank you for your
support and we will continue work diligently, thoroughly and with
prudence to advance your company's assets.
FINANCIAL AND OPERATIONAL REPORT
The Company generated gross profit of GBP1,362,000 during the
fiscal year, an increase of 87.6% from the previous financial
year's gross profit of GBP726,000. The operating profit for the
full year, ending 30 June 2021 was GBP1,021,000, an increase of
152% over the previous full year operating profit of GBP405,000.
The full year net income was GBP964,000, an increase of 173% from
the previous full year's profit of GBP353,000. M&FI's NAV per
share increased 17.4% year over year to 18.22p. The overall cash
and investment portfolios increased by 19.4% year over year to
GBP6,680,000.
We believe the key to creating shareholder value for Mineral
& Financial Investments is, as with any investment company is
to generate positive investment returns and maintain low operating
costs. More specifically operating costs which grow at a slower
rate than the accretion in the Net Asset Value. Our full year total
administrative costs totalled GBP341,000, a 7.9% increase over the
previous year's costs of GBP321,000 which further aided in
improving our results.
The world is recovering from the unexpected and difficult
challenges resulting from the global pandemic caused by the spread
of the Covid 19 virus. Global economic output declined by 3.1%
(Fig. 3), as measured by the International Monetary Fund (IMF). In
the IMF's most recent global economic analysis(1) , Global Output
for 2021 is estimated to have grown by 5.9%, which is forecasted to
be followed in 2022 by a further output increase of +4.9%. We
believe the recovery has been propelled by both fiscal and monetary
intervention by most governments globally, acting as both a
mitigant to the economic damage of the pandemic, and secondarily as
a propellant as we exit the lockdowns imposed around the world.
Inflationary pressures were initially expected to be contained due
to diminished economic activity. However, due to the
afore-mentioned stimulus and global supply-chain bottlenecks, we
have noted inflationary pressures increasing significantly. The
IMF's forecast estimates that global inflation should increase from
3.2% in 2020 to 4.3% (+34%) in 2021. We anticipate the largest rise
in inflation will be in Advanced Economies, which benefitted from
more fiscal and monetary stimulus, seeing inflation quadrupling
from 0.7% to 2.8% in 2021.
IMF - WORLD ECONOMIC OUTLOOK [3] (Fig. 3)
3.3% 3.8% 3.6% 2.8% -3.1% 5.9% 4.9%
----- ----- ----- ----- ------ ----- -----
Advanced Economies 1.8% 2.5% 2.3% 1.7% -4.5% 5.2% 4.5%
----- ----- ----- ----- ------ ----- -----
Emerging Markets and Developing
Economies 4.5% 4.7% 4.5% 3.7% -2.1% 6.4% 5.1%
----- ----- ----- ----- ------ ----- -----
2.7% 3.2% 3.6% 3.5% 3.2% 4.3% 3.8%
----- ----- ----- ----- ------ ----- -----
Advanced Economies 0.7% 1.7% 2.0% 1.4% 0.7% 2.8% 2.3%
----- ----- ----- ----- ------ ----- -----
Emerging Markets and Developing
Economies 4.3% 4.4% 4.9% 5.1% 5.1% 5.5% 4.9%
----- ----- ----- ----- ------ ----- -----
The growth in supply of US dollars, as measured by the US
Federal Reserve Bank, M1 is up from US$4.0T, as of January 2020, to
the Fed's latest revelation of M1 reaching US$20.0T - is a 400%
increase in 20 month. At the same time, for a few years prior to
the pandemic we believe the natural resource sectors had
experienced years of constrained access to capital markets,
resulting in diminished levels of exploration to satisfy future
demand. The combination of these two macro-factors along with
positive economic growth will, we believe, be positive for
commodity pricing in 2021 and 2022. Moreover, we believe that
inflation will be longer lasting than is inferred and that precious
metals should benefit disproportionately from this economic
setting.
GLOBAL STOCK INDEX PERFORMANCE(2) (Fig. 4)
Standard & Poor 500 3,106.7 4,291.8 38.1%
--------- --------- ------
Nikkei 225 22,288.1 28,791.5 29.2%
--------- --------- ------
Euro Stoxx 50 3,234.1 4,064.3 25.7%
--------- --------- ------
Shanghai Shenzhen CSI
300 4,163.9 5,224.0 25.5%
--------- --------- ------
Hang Seng 24,301.6 28,994.1 19.3%
--------- --------- ------
FTSE 100 6,169.7 7,037.5 14.1%
--------- --------- ------
We believe the Fiscal and Monetary responses by most "advanced
economy" governments have created fertile ground for equity markets
to advance this year. We note that key equity markets (Fig. 4)
benefited from strong positive advances in the period that
coincides with our fiscal year. The strongest market gains were
experienced by the S&P 500 rising by 38.1%, while the FTSE 100
was up 14.1% during the same 12-month period.
World commodity price performances during our fiscal year was
positive (Fig. 6) for all but one of the commodities that we
follow: Uranium (-1.5%). All other commodities have had positive
price performance during the period. However, the notable laggard
amongst the performances has been gold. We have committed to an
overweight position in precious metals, particularly gold. We
remain committed to the belief that metals, and more specifically
precious metals will outperform overall equity markets in the
upcoming period.
PRICE PERFORMANCE FOR VARIOUS COMMODITIES(2)
(US$, Fig 6)
% Ch.
METALS 30/06/18 30/06/19 30/06/20 30/06/21 30/11/21 30/6/20 to 30/6/21
----------- --------- --------- --------- --------- --------- ----------------------
Gold $1,255 $1,389 $1,782 $1,835 $1,788 3.0%
Silver $16.20 $15.30 $17.85 $26.19 $22.92 46.7%
Platinum $853 $837 $804 $1,065 $51 32.5%
Palladium $945 $1,535 $1,835 $2,709 $1,707 47.6%
Rhodium $2,080 $3,150 $5,800 $18,200 $12,850 213.8%
Copper $6,525 $5,969 $6,013 $9,319 $9,652 55.0%
Nickel $14,740 $12,670 $12,748 $18,254 $20,284 43.2%
Aluminum $2,238 $1,779 $1,594 $2,504 $2,641 57.1%
Zinc $3,089 $2,575 $2,057 $2,951 $3,351 43.5%
Lead $2,436 $1,913 $1,786 $2,289 $2,343 28.2%
Uranium $59,730 $54,454 $72,312 $71,209 $101,964 -1.5%
INVESTMENT PORTFOLIOS
The performance of various indices, commodities and share prices
appear to have been strong during our fiscal year ending June 30,
2021. We note that the mining indices appear to have generated
strong gains during this period. We believe that this performance
is somewhat misleading, as it is our belief that markets were still
mostly depressed in June 2020, and most appreciated sharply from
the Q1-Q2 lows. However, some of these indices, as at our 30 June
2021 year end were still below the pre-COVID levels. For example,
the FTSE 350 Mining Index is up 25.4% June 2020 to June 2021,
however, if we measure its performance as of 1 January 2020 (i.e.,
prior to the COVID related market correction) to 30 June 2021, the
FTSE 350 Mining Index was up 2.34%, while the Company's NAV rose
from 15.19p to 18.22p (+20.0%) during the comparable period.
The commodity markets performed very similarly to most equity
markets - declining sharply from Mid-February 2020 to Mid-March
2020(2) . During this 5-week period the S&P 500 declined from
3,382 to 2300 (-32%)(2) . Since that March low the S&P 500 has
risen 105%(2) . The FTSE 100 Index, in contrast, remains 6.9% below
where it was in mid-February 2020(2) . M&FI's performance
during this period compares very favourably to the FTSE 100,
outperforming the FTSE 100 by 26.9% during the 1 January 2020 to 30
June 2021, period.
It is our belief that commodity price performances were
consistent with the overall performance of equity markets, inasmuch
that the best performing metal commodities during the 12 and
18-month periods were the base metals our belief is that any
economic recovery will lead us promptly to levels of economic
prosperity that exceeded our levels prior to the "COVID-Crash". The
best performing metal from 30 June 2020 (Fig.6), is Rhodium
(+214%), which we note also remains below its pre-covid highs,
while the worst performance was Uranium (-1.5%), and closely
followed by gold (+3.0%). We believe that the inflationary
pressures caused by the greatest increase in US money supply in
history, along with the fiscal stimuli in most advanced economies,
coupled with the supply-chain bottlenecks caused by the COVID
related shutdowns and slow-downs will, in our opinion, not be
"transitory". We also believe that equity markets appear to have
broadly concluded that the economic impact of COVID will be over
soon and that the impact of the pandemic will also be "transitory".
We hope that COVID 19 is near its end, but we believe its effects
will be with us for a long time to come as we believe it has caused
not only short-term changes to our behaviour, but longer-term
structural changes in economic activity. Equity markets, as
mentioned earlier, are trading at a higher valuation to their net
earnings (fig. 4). If our belief is correct and inflation is more
durable than expected, we believe valuations will come under
pressure. We note that the valuation of many of the senior gold
producers we own have, by our own internal calculations, valuations
and/or yields that are below their historical averages and that of
the overall markets. We do not believe that an increased
inflationary environment will be as easily subdued as pundits are
proposing and that we will be well served by being overweighted in
precious metal investments in addition to our other
investments.
CASH
Our liquidity as measured by our cash holdings as of 30 June
2021, was GBP855,000, up 211.2% from last year. The increase was
due to the receipt of US$1.0M from Ascendant on June 22, 2021. Our
intention is to keep our cash and tactical portfolio's combined
value to be between 25% and 60%. They currently represent 38% of
our total NAV, which is within our internal targets. As this mining
cycle evolves our objective is to maintain a higher cash &
Tactical Portfolio holding, so we are well placed to avail
ourselves of investment opportunities further along in the economic
and market cycles.
TACTICAL PORTFOLIO
The Tactical Portfolio gained 21.8% year over year. Amongst the
equity portfolio the following investments are noteworthy:
UBS Gold ETF (CHF): Our investments in precious metal bullion
peaked at 5.2% of our portfolio values. We reduced our bullion, and
gold equity holdings as gold exceeded $2000/oz in August 2020. Gold
prices performed well in 2020-21, reaching an all- time high spot
price of $2,075/oz during the global economic uncertainties. We
believe this was due to concerns primarily resulting from the
impact of the spread of Covid-19, reductions in short- and
long-term interest rates and large-scale fiscal stimulus measures
in major economies, a weakening of the trade-weighted US dollar,
and a search for safe-haven assets. We understand that investor
demand from gold was exceptionally strong in 2020, with the World
Gold Council (WGC) reporting that collective ETF gold holdings grew
by a record 877 tonnes during the year and reached an all-time high
of approximately 3,752 tonnes in the fourth quarter of 2020. COMEX
net long positions also reached all-time highs during 2020, a
significant reversal of sentiment from the net short position that
existed in late 2018(4) .
While we understand there was strong appetite for gold from the
investment community, overall demand for gold in ounce terms fell
in 2020 (4) , as the global pandemic and rising prices that reached
all-time highs in US dollars, as well as in many non-US currencies,
including in Euro, Pound sterling, Japanese yen, Indian rupee, and
Chinese yuan, reduced both consumer demand for jewellery and net
purchases by central banks (4) . Global jewellery demand was down
34% versus 2019, with China and India - responsible for over half
of jewellery demand - down 35% and 42%, respectively (4) . Gold
demand for electronics and other industrial uses fell by 7% in 2020
as the spread of Covid-19 reduced manufacturing activity and demand
for electronics (4) . Central bank purchases of gold slowed in 2020
after 2018 and 2019 represented the two highest years of net
purchases in the last 50 years (4) . The WGC reports that central
banks still added 273 tonnes to their reserves during 2020, even
after experiencing a quarter of negative net accumulation in Q3
2020 (4) . Some Central Banks looked to their holdings of gold as a
source of liquidity in difficult economic times because of the
global pandemic - with their ability to do so providing a strong
statement as to why gold is a valuable reserve asset (4) . Russia
suspended its purchases of gold in March 2020, taking a significant
buyer out of the market during the remainder of the year (4) .
Overall, though, central banks have now been net purchasers of gold
for 11 straight years as they look to gold as a source of reserve
diversification (4) .
Overall supply of gold in 2020 decreased by 4%, the first annual
decline since 2017, mainly attributable to a 4% reduction [4] in
global mine production tempered by a modest rise in recycled gold
and net de-hedging by producers (4) . Global mine production fell
for the second straight year in 2020, further confirming that the
mining industry may have reached peak gold production for the
foreseeable future (4) . Gold production recovered in the first
half of 2021 but remains 1.6% (4) below production levels achieved
in the 12 months leading up to Q1-2020, the start of the pandemic.
The supply of recycled gold, which is historically positively
correlated with the gold price, only increased by 1% in 2020
despite record high gold prices and remains down 2% in Q2-2021
(4) as the pandemic likely limited the ability of potential sellers to access the market.
Barrick Gold Corp.: Barrick Gold is the second largest gold
producer in the world, the result of the merger of Barrick Gold and
Randgold Exploration. Barrick represents 2.7% of our investment
portfolios. The merged company is led by Barrick's CEO, Mark
Bristow, formerly Randgold's CEO. The Company acquired our initial
investment in Barrick in response to the merger with Randgold,
causing a technical sell-off as it relinquished its primary listing
on the FTSE. This meant that it was no longer eligible to be held
by European/UK funds, which we believed resulted in some temporary
selling pressure. Since 31 December 2018, Barrick has increased its
cash holding to >US$5.2B, a 330% increase in cash holdings.
Simultaneously, Barrick has reduced its debt-to-equity ratio from
0.61:1.0 to 0.16:1.0. Barrick has solidly re-focused on profits
rather than scale. We believe that Barrick will be a "go-to" gold
stock when the broader markets become more attentive to the gold
sector. Barrick has historically traded at valuations that were
higher than the overall markets, and now trades at a Price/Earnings
ratio which is 41% below that of the S&P 500 and offers a yield
that is 47% higher than the yield of the S&P 500 Index.
Cerrado Gold: We initiated our investment in common shares of
Cerrado Gold in 2019 when it was a private exploration company, and
it currently represents 6.3% of our investment portfolio. It is now
a gold producer with an Argentinian mine (Mineiras Don Nicolas
(MDN)) and expects to produce 50,000 oz of gold in the current
year. During the year Cerrado published a Preliminary Economic
Assessment (PEA) on its Brazilian exploration project, Monte do
Carmo (MDC). Monte do Carmo's PEA indicates an after tax NPV(@5%)
of US$617M along with an IRR of 94.8% based on an All in Sustaining
Cost (AISC) over the Life of Mine (LOM) of US$612/Oz of Gold.
Further details of this are set out in the Cerrado's announcement
dated August 23, 2021. The overall resource base of MDC has
expanded to an Indicated Resource of 541,000/oz, and an Inferred
resource of 780,000/oz. (i.e., Total resource to date of
1,321,000/oz); MDN, which is in production, and La Calandria
(nearby Don Nicolas) has expansion potential, and has a Measured
and Indicated Resource of 566,609/oz and inferred of 399,709 oz.
The total resource (Measured, Indicated & Inferred) for Cerrado
has grown from 813,000 oz in 2019 to 2,232,701 oz of gold, a 175%
increase in 2 yrs. We believe that Cerrado will continue to expand
the resource base and succeed in getting MDC into production by
2025, by which time Cerrado could be producing as much as
215,000/oz to 285,000 [5] /oz of gold p/year.
Northern Star Resources Limited: Northern Star is an A$11.0B
Australian Gold producer. Our investment in Northern Star
represents 1.82% of our investment portfolios. Northern Star has
buys established mines within what it terms "Production Centres".
Northern Star has three Production Centres: Kalgoorlie, Yandal,
both in Australia and Pogo in Alaska. Their Production Centres are
meant to use capital more efficiently and to operate with greater
efficiencies of scale. The company's guidance is towards increasing
its production from the current 1.48M oz to achieving production of
2.0M oz of gold per year by 2026
Equinox Gold: Equinox Gold is a Canadian mining company with a
market cap of US$2.2B, 30.3M oz of M&I gold resources and has
been executing a strategy of consolidating single mine producing
companies. Guidance from Equinox suggests gold production of
600,000 oz. will be achieved in 2021. Equinox now produces from
seven operating gold mines and plans to increase production by
advancing a pipeline of growth projects. This investment represents
1.75% of our investment portfolio. This company is delivering on
its growth and diversification strategy, growing from a
single-asset developer to a multi-mine producer and is advancing
toward its vision of producing one million ounces of gold
annually.
Fresnillo Plc: Fresnillo is a GBP6.7B Mexican mining company
listed in London (as well as on Mexican and US stock exchanges) and
is the largest silver producer in the world. Fresnillo trades at
14.5x p/e and offers a 2.65% yield. We acquired our shares after an
earnings disappointment and have added to our investment since 30
June 2021. The Juanicipio Mine, of which Fresnillo owns 56%, is
entering into production in Q4 2021. We believe that Fresnillo is
undervalued and will benefit from the completion of Juanicipio
which should lead to a revaluation of its shares.
Pretium Resources Inc: Pretium Resources is a Canadian Gold
Producer with a single very high grade mine called Brucejack,
located in British Columbia. Our investment in Pretium, as at our
2021-year end, represented 1.1% of our investment portfolios.
Newcrest has since announced its intention to acquire Pretium at a
23% purchase premium after our year-end. The features which
Newcrest explain motivated it to acquire Pretium are similar to
those which attracted M&FI to invest in Pretium: The Brucejack
Mine is a high-grade gold mine, in production, in a safe
jurisdiction (British Columbia (BC), Canada) with state-of-the-art
operations and environmental features (i.e., no-tailings dam) with,
what we believe are, relatively simple logistics (i.e., near roads
and a port as well as being connected to the power grid). Pretium's
production guidance for 2021 is production of 325,000 to 365,000oz
of gold at an All-In Sustaining Cost (AISC) of $1,060/oz to
$1,190/oz
STRATEGIC PORTFOLIO
The Strategic portfolio was up to GBP4.11M, or a 5.1% year on
year increase (Fig. 6) at 30 June 2021. The Portfolio performance
was however impacted by the additional provision of GBP120,000
taken on CAP Energy Plc. This provision reduced the portfolio's
performance by 3.1%.
Redcorp Empreedimentos Mineiros Lda.: The Company owns 100% of
TH Crestgate GmbH, which in turn owns 75% of Redcorp Empreedimentos
Mineiros Lda. (Redcorp). Redcorp is a Portuguese company whose main
asset is the Lagoa Salgada Project. In 2018 we entered into a sale
and earn-in option agreement with Canadian listed company,
Ascendant Resources. Ascendant can earn into 80% ownership of the
Lagoa Salgada Project by completing US$9.0M of exploration work on
the project, completing a Feasibility Study and completing its
payments commitments to M&FI. Based on the Earn-in Agreement we
have with Ascendant, by June 22, 2022, Ascendant is expected to
have earned into 50% ownership of Redcorp. During this upcoming
calendar year of 2022, we expect to receive two further cash
payments from Ascendant totalling US$3.5M as part of their earn-in
to a net interest of 80% into the Lagoa Salgada Project. The value
of our investment in Redcorp is based on the conservatively
discounted value of the expected payments to be received from
Ascendant in accordance with the 2018 agreement and the residual
interest in Redcorp. The value of the residual interest in Redcorp
is based on the discounted value of Ascendant's historical and
estimated future investment for it to reach 80% ownership of the
project. On this basis, Redcorp represents 48% of our NAV. The
project has advanced from an initial resource of approximately
4.4Mt with Zinc Equivalent grade of 6.0% when, our now wholly owned
subsidiary, TH Crestgate GmbH acquired Redcorp, to today - where it
is a project led by Redcorp and Ascendant with a resource totalling
27.5Mt with a 7% Zinc Equivalent grade. After the end of the period
under review, Redcorp and Ascendant secured a mine development
permit agreement from the Portuguese government. In addition, on
[date[ Redcorp and Ascendant also completed a second PEA indicating
that the Lagoa Salgada Project has, based on 100% ownership, a
pre-tax NPV(@8%) of US$341.6M resulting in a pre-tax IRR of 68.2%,
with a 1.3-year pre-tax payback based on its planned 14-year life
of mine (see announcement dated November 8, 2021).
Golden Sun Resources: The Company made its initial investment in
Golden Sun Resources (GSR) in 2019 by acquiring convertible notes
of GSR. The Company have made two small follow-on investments in
Notes with identical terms. As of the date of writing, these GSR
notes represent a 4.7% net ownership in Golden Sun, which by the
time the notes mature should represent approximatively 7.5% net
ownership of Golden Sun. Golden Sun currently represents 7.5% of
our investment portfolios. The GSR notes will mature on 30 April
2024. Interest is chargeable and accrues at the rate of 20% per
annum, calculated monthly in arrears on the outstanding Loan Amount
and will become payable upon maturity, or the notes and interest
can be converted into GSR shares at US$1.25 p/s. Golden Sun has
brought the Bellavista project back into production. Its business
plan is to expand the project in small, financially self-sustaining
phases. The next phase is to progress from pilot plant leach pad
production to a 400 Tonnes per day Carbon in Leach (CIL) plant. The
next phase, if successful, could result in production exceeding
30,000/oz of gold per year. Additionally, Golden Sun has applied
for and secured several other Costa Rican exploration project
licenses from the government. Most of these licenses are former
production or exploration projects with historical resources that
were re-possessed by the government when the owners failed to meet
their commitments. We understand that Golden Sun has evolved to
become a respected mining company by the Costa Rican Government. We
also understand that this has been achieved by the company
exhibiting market leading Environmental and Social practices.
Golden Sun has progressed a little more slowly than we had hoped
but has not deviated from the plan upon which we invested. We
continue to believe this is a distinctive investment opportunity
that should, over the next 24 months, be an attractive IPO listing
and/or partner or acquisition target for a larger mining company
seeking a significant foothold in a stable and advanced economy in
Central America.
Ascendant Resources: The Company owns 2.2M shares in Ascendant
Resources, a Toronto Stock Exchange listed company. Ascendant's
focus is the Lagoa Salgada Project. Ascendant owns 25% of Redcorp,
which owns 85% of the Lagoa Salgada Project. Ascendant is subject
to an earn-in option on M&FI's 75% owned Redcorp Empreedimentos
Mineiros Lda. LDA and its Lagoa Salgada Polymetallic project
located on Iberian Pyrite Belt in South Central Portugal. The
shares of Ascendant have performed well during the Company's fiscal
year, rising 28.7% and now represent 5.8% of our portfolio
investments. Ascendant has achieved important operational
milestones during the fiscal period. During the twelve months ended
30 June 2021 Ascendant has completed two financings allowing it to
progress the Lagoa Salgada Project to where it currently stands. In
2021 it plans to drill 15,000m to support the completion of a
definitive Feasibility Plan in late 2022. We continue to maintain
our positive outlook for zinc prices and believe that Ascendant's
higher leverage to an improvement in the price of zinc should have
a positive impact on its share price.
Ideon Technologies : M&FI made its initial investment in
2019 and has since made a follow-on investment in 2021. Our initial
investment was made at CA$0.37, and in its second, oversubscribed
financing Ideon's capital raise was completed at CA$1.00 per share.
Ideon now represents 3.7% of our portfolio values. We are advised
that this company is within a quarter or two from reaching
break-even financial results (although there can be no guarantee).
Ideon Technologies Inc. is Canadian based company which we believe
is a pioneer in the application of cosmic-ray muon tomography.
Ideon's discovery platform provides x-ray-like visibility up to 1
km beneath the Earth's surface, much like medical tomography images
the interior of the body using x-rays. Using proprietary detectors,
imaging systems, inversion technologies, and artificial
intelligence, it maps the intensity of cosmic-ray muons underground
and constructs detailed 3D density profiles of subsurface
anomalies. Ideon's discovery platform can identify and image
anomalies such as mineral and metal deposits, air voids, caves, and
other structures with density properties that contrast with the
surrounding earth. The potential result is a new exploration
paradigm that could result in a 90% reduction in core drilling,
while increasing exploration certainty by 95% in the geological
settings suited by tomography. Whilst still at an early stage, the
environmental impact from such a technological change would be
meaningful.
Cap Energy PLC: CAP is an offshore oil and gas exploration
company focused on West Africa. We are advised that the management
and largest shareholders of CAP are ultra-high net worth
businesspeople with deep and wide-ranging contacts in the various
countries in West Africa and the energy industry. CAP is making
slower progress than we would have expected after buying out its
partners on its three offshore oil exploration projects.
Additionally, Covid 19 issues have significantly slowed CAP's
progress at finding financial partners. During the fiscal year
M&FI proposed two separate financing terms to CAP's management,
both were declined. CAP has chosen to approach its shareholders to
complete a financing at 50p. We reduced our carrying value by 37.5%
or GBP120,000. Our investment in CAP currently represents 2.9% of
our NAV. CAP is the controlling shareholder and the operator of
three exploration blocks: 1. Djiféré Block, offshore Senegal, which
CAP now holds a 90% interest in the project; 2. Block 5B licence,
located offshore Guinea-Bissau, of which CAP owns 85.5%, and; 3.
Block 1, also offshore Guinea Bissau, which CAP now owns 76% of the
licence. The most prospective licence is "Block 5B"- It is in deep
water, but the 3D seismic analysis suggests that it is structurally
analogous to the neighbouring SNE oil field which was the largest
oil discovery in 2014 and is currently producing. We continue to
closely monitor CAP's progress.
Notice of AGM and Dispatch of Report and Accounts
Mineral & Financial Investments Ltd.'s Audited Financial
Statements for the year ended 30 June 2021 will be available on the
Company's website ( http://www.mineralandfinancial.com/ ) on
Wednesday, 23 December 2021 and will be posted to shareholders
together with the notice of the AGM on or before 23 December 2021.
A further announcement confirming the dispatch and providing the
details of the AGM will be made at that time.
FOR MORE INFORMATION:
Jacques Vaillancourt - Mineral & Financial Investments Ltd. +44 7802 268 247
Katy Mitchell, Ben Good - WH Ireland Limited +44 207 220
1666
Jon Belliss - Novum Securities Limited +44 207 399 9400
Consolidated Income Statement Year ended Year ended
30 June 30 June 2020
2021
Notes GBP'000 GBP'000
------------------------------------------ ------ ----------- --------------
Investment income 96 3
Fee revenue 3 -
Net gains on disposal of investments 1,244 497
Net change in fair value of investments 19 226
1,362 726
Operating expenses 1 (341) (321)
Other gains and losses 3 (24) (24)
----------------------------------------- ------ ----------- --------------
Profit before taxation 997 381
Taxation expense 4 (33) (28)
Profit for the year from continuing
operations and total comprehensive
income, attributable to owners of
the Company 964 353
Profit per share attributable to owners
of the Company during the year from 5 Pence Pence
continuing and total operations:
Basic (pence per share) 2.7 1.0
Fully diluted (pence per share) 2.7 1.0
Consolidated Statement of Financial Position
2021 2020
Notes GBP'000 GBP'000
------------------------------------- ------ --------- ---------
CURRENT ASSETS
Financial assets held at fair value
through profit or loss 6 5,822 5,315
Trade and other receivables 27 81
Cash and cash equivalents 855 275
------------------------------------- ------ --------- ---------
6,704 5,671
------------------------------------- ------ --------- ---------
CURRENT LIABILITIES
Trade and other payables 163 127
Convertible unsecured loan notes 10 10
------------------------------------- ------ --------- ---------
173 137
------------------------------------- ------ --------- ---------
NET CURRENT ASSETS 6,531 5,534
------------------------------------- ------ --------- ---------
NON-CURRENT LIABILITIES
Deferred tax provision (93) (60)
NET ASSETS 6,438 5,474
------------------------------------- ------ --------- ---------
EQUITY
Share capital 13 3,096 3,096
Share premium 13 5,892 5,892
Loan note equity reserve 14 6 6
Share option reserve 15 23 23
Capital reserve 15,736 15,736
Retained earnings (18,315) (19,279)
------------------------------------- ------ --------- ---------
Equity attributable to owners of
the Company and total equity 6,438 5,474
------------------------------------- ------ --------- ---------
Consolidated Statement of Changes in Equity
Share Share Share option Loan note Capital Accumulated Total
capital premium reserve reserve reserve losses equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- -------- -------- ------------ --------- -------- ----------- -------
At 1 July 2019 3,095 5,886 23 6 15,736 (19,632) 5,114
Total comprehensive
income for the
year - - - - - 353 353
-------------------- -------- -------- ------------ --------- -------- ----------- -------
Share issues 1 6 - - - - 7
At 30 June 2020 3,096 5,892 23 6 15,736 (19,279) 5,474
-------------------- -------- -------- ------------ --------- -------- ----------- -------
Total comprehensive
income for the
year - - - - - 964 964
-------------------- -------- -------- ------------ --------- -------- ----------- -------
At 30 June 2021 3,096 5,892 23 6 15,736 (18,315) 6,438
-------------------- -------- -------- ------------ --------- -------- ----------- -------
Consolidated Statement of Cash Flows
Year ended Year ended
30 June 2021 30 June 2020
Notes GBP'000 GBP'000
---------------------------------------- ------- -------------- --------------
OPERATING ACTIVITIES
Profit before taxation 997 381
Adjustments for:
Profit on disposal of trading
investments (1,244) (497)
Fair value gain on trading investments (19) (226)
Other gains and losses - -
Investment income (96) (3)
Tax paid - (10)
Operating cash flow before working
capital changes (362) (355)
(Increase) in trade and other
receivables 54 (3)
Increase in trade and other payables 36 39
------------------------------------------------- -------------- --------------
Net cash outflow from operating
activities (272) (319)
------------------------------------------------- -------------- --------------
INVESTING ACTIVITIES
Purchase of financial assets (2,269) (1,279)
Disposal of financial assets 3,116 1,639
Acquisition of subsidiary - -
Cash balance of subsidiary acquired - -
Investment income 5 3
------------------------------------------------- -------------- --------------
Net cash inflow/(outflow) from
investing activities 852 363
------------------------------------------------- -------------- --------------
FINANCING ACTIVITIES
Proceeds of share issues - 7
Net cash inflow from financing
activities - 7
------------------------------------------------- -------------- --------------
Net (decrease)/increase in cash
and cash equivalents 580 51
Cash and cash equivalents as at
1 July 275 224
C ash and cash equivalents as
at 30 June 855 275
------------------------------------------------- -------------- --------------
NOTES TO THE FINANCIAL STATEMENTS
1 OPERATING PROFIT
2021 2020
GBP'000 GBP'000
-------------------------------------------- -------- --------
Profit from operations is arrived at after
charging:
Directors fees 67 59
Other salary costs 19 18
Registrars fees 31 31
Corporate adviser and broking fees 42 45
Other professional fees 124 107
Foreign exchange differences 24 24
Other administrative expenses 39 43
Fees payable to the Group's auditor:
For the audit of the Group's consolidated
financial statements 19 18
------------------------------------------------ -------- --------
365 345
------------------------------------------------ -------- --------
2 EMPLOYEE REMUNERATION
The expense recognised for employee benefits is analysed below;
the Group has no employees other than the directors of the
parent company and its subsidiary; average number of employees,
including executive directors, 2 (2019, 2):
2021 2020
GBP'000 GBP'000
------------------------------------------ ------------- ------------
Wages and salaries 86 77
86 77
---------------------------------------------- ------------- ------------
Details of Directors' employee benefits expense are included
in the Report on Remuneration.
Remuneration for key management of the Company, including amounts
paid to Directors of the Company, is as follows:
2021 2020
GBP'000 GBP'000
------------------------------------------ ------------- ------------
Short-term employee benefits 67 59
67 59
---------------------------------------------- ------------- ------------
3 OTHER GAINS AND LOSSES
2021 2020
GBP'000 GBP'000
--------------------------------------- -------- --------
Foreign currency exchange differences (24) (24)
------------------------------------------------------------------ -------- --------
(24) (24)
------------------------------------------------------------------ -------- --------
4 INCOME TAX EXPENSE
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- -------- -------
Deferred tax charge relating to unrealised gains
on investments 33 18
Other tax payable - 10
----------------------------------------------------------------------------------- -------- -------
33 28
----------------------------------------------------------------------------------- -------- -------
The tax on the Group's profit before tax differs from the theoretical
amount that would arise using the weighted average rate applicable
to the results of the Consolidated entities as follows:
2021 2020
GBP'000 GBP'000
-------------------------------------------------------- -------- -------
Profit before tax from continuing operations 1,004 381
----------------------------------------------------------------------------------- -------- -------
Profit before tax multiplied by rate of federal
and cantonal tax in Switzerland of 14.6% (2020:
14.6%) 146 56
Less abatement in respect of long term investment
holdings (131) (50)
Unrelieved tax losses 18 22
Total tax 33 28
----------------------------------------------------------------------------------- -------- -------
5 EARNINGS PER SHARE
The basic and diluted earnings per share are calculated by
dividing the profit attributable to owners of the Company by
the weighted average number of ordinary shares in issue during
the year.
2021 2020
GBP'000 GBP'000
------------------------------------------- ----------- -----------
Profit attributable to owners of the
Company
- Continuing and total operations 964 353
-------------------------------------------- ----------- -----------
2021 2020
------------------------------------------- ----------- -----------
Weighted average number of shares for
calculating basic earnings per share 35,135,395 35,080,784
Weighted average number of shares for
calculating fully diluted earnings per
share 35,204,897 35,146,295
-------------------------------------------- ----------- -----------
Earnings per share from continuing and
total operations
- Basic (pence per share) 2.7 1.0
- Fully diluted (pence per share) 2.7 1.0
-------------------------------------------- ----------- -----------
6 INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
2021 2020
GBP'000 GBP'000
---------------------------------------------- ---------- ----------
1 July - Investments at fair value 5,315 4,952
Cost of investment purchases 2,269 1,279
Proceeds of investment disposals (3,116) (1,639)
Profit on disposal of investments 1.244 497
Fair value adjustment 19 226
Accrued interest on loan notes 91 -
---------------------------------------------- ---------- ----------
30 June - Investments at fair value 5,822 5,315
-------------------------------------------------- ---------- ----------
Categorised as:
Level 1 - Quoted investments 1,712 1,001
Level 3 - Unquoted investments 4,110 4,314
-------------------------------------------------- ---------- ----------
5,822 5,315
-------------------------------------------------- ---------- ----------
The Group has adopted fair value measurements using the IFRS
7 fair value hierarchy
Categorisation within the hierarchy has been determined on
the basis of the lowest level of input that is significant
to the fair value measurement of the relevant asset as follows:
Level 1 - valued using quoted prices in active markets for
identical assets
Level 2 - valued by reference to valuation techniques using
observable inputs other than quoted prices included in Level
1.
Level 3 - valued by reference to valuation techniques using
inputs that are not based on observable market criteria.
LEVEL 3 investments
Reconciliation of Level 3 fair value measurement of investments
2021 2020
GBP'000 GBP'000
--------------------------------------------- ---------------------------- ----------------------------
Brought forward 4,314 3,835
Reclassified to Level 1 (404) -
Purchases 207 122
Disposals - (16)
Fair value adjustment (7) 373
--------------------------------------------- ---------------------------- ----------------------------
Carried forward 4,110 4,314
--------------------------------------------- ---------------------------- ----------------------------
Level 3 valuation techniques used by the Group are explained
on page 32 (Fair value of financial instruments)
The Group's largest Level 3 investment is Redcorp Empreendimentos
Mineiros LDA ("Redcorp").
REDCORP EMPREIMENTOS MINEIROS LDA
Redcorp is a Portuguese company whose main asset is the Lagoa
Salgada Project, which has resources of zinc, lead and copper.
In June 2018, TH Crestgate entered into an agreement with Ascendant
Resources Inc ("Ascendant") under which Ascendant initially
acquired 25% of the equity in Redcorp for a consideration of
US$2.45 million, composed of US$1.65 million in Ascendant shares
and US$800,000 in cash.
The second part of the Agreement is an Earn-in Option under
which Ascendant has the right to earn a further effective 25%
interest via staged payments and funding obligations as outlined
below:
Ascendant is required to spend a minimum of US$9.0 million
directly on the Lagoa Salgada Project within 48 months of the
closing date, to fund exploration drilling, metallurgical test
work, economic studies and other customary activities for exploration
and development, and to make stage payments totalling US$3.5
million to TH Crestgate according to the following schedule
or earlier:
22 Dec 2018 US$250,000
22 Jun 2019 US$250,000
22 Dec 2019 US$500,000
22 Jun 2020 US$500,000 (amended to 5 monthly payments of $100,000,
June to October plus an additional payment of $100,000
22 Jun 2021 in November 2020)
22 Jun 2022 US$1,000,000
US$1,000,000
Under the last part of the agreement Ascendant can acquire
an additional 30% taking its total interest to 80% by the payment
of US$2,500,000 on or before 22 Dec 2022.
To date the payments due by Ascendant under the agreement have
been paid on time and the Group's investment in Redcorp has
been valued on a discounted cash flow basis of the remaining
payments due under the agreement plus an additional amount
for the discounted value of the Group's residual investment
in the project.
Redcorp currently owns 85% of the Lagoa Salgada project and
signed an agreement in June 2017 with Empresa Desenvolvimento
Mineiro SA (EDM), a Portuguese State-owned company to re-purchase
the remaining 15% of the project resulting in a 100% ownership
of the project. The 2017 agreement was subject to the Portuguese
Secretary of State's approval which has not yet been received.
Redcorp and Mineral & Financial continue to explore ways and
means to complete the purchase. M&FI has granted Ascendant
conditional options that would enable Ascendant to have a net
80% interest in the Project if the company is unsuccessful
in re-acquiring EDM's interest within a still to be determined
period after the completion of the Feasibility Study.
7 SUBSIDIARY COMPANIES
The Group's subsidiary companies are as follows:
Proportion of ownership
Country of incorporation interest and voting
Principal and principal rights
Name activity place of business held by the Group
TH Crestgate
GmbH Investment Steinengraben 18 100%
company 4051 Basel, Switzerland
5 Bath Road, London,
M&FI Services Service United Kingdom, W4
Ltd company 1LL 100%
On 5 February 2021 M&FI Services Ltd was incorporated and
became a subsidiary of the Company
All intergroup transactions and balances are eliminated on
consolidation.
8 TRADE AND OTHER RECEIVABLES
2021 2020
GBP'000 GBP'000
------------------------------------------- ------------ -----------
Other receivables 9 69
Prepayments 18 12
Total 27 81
The fair value of trade and other receivables is considered
by the Directors not to be materially different to the carrying
amounts.
At the balance sheet date in 2021 and 2020 there were no trade
and other receivables past due.
9 TRADE AND OTHER PAYABLES
2021 2020
GBP'000 GBP'000
------------------------------------------ ------------- -------------
Trade payables 36 18
Other payables 82 70
Accrued charges 45 39
Total 163 127
The fair value of trade and other payables is considered by
the Directors not to be materially different to carrying amounts.
10 CONVERTIBLE UNSECURED LOAN NOTES
The outstanding convertible loan notes are zero coupon, unsecured
and unless previously purchased or converted they are redeemable
at their principal amount at any time on or after 31 December
2014.
The net proceeds from the issue of the loan notes have been
split between the liability element and an equity component,
representing the fair value of the embedded option to convert
the liability into equity of the Company as follows:
2021 2020
GBP'000 GBP'000
------------------------------------------------- --------- ---------
Liability component at beginning and end
of period 10 10
The Directors estimate the fair value of the liability component
of the loan notes at 30 June 2021 to be approximately GBP10,000
(2020: GBP10,000)
11 DEFERRED TAX PROVISION
2021 2020
GBP'000 GBP'000
---------------------------------------- -------- --------
As at 1 July 60 42
Provision relating to unrealised gains
on investments 33 18
--------------------------------------------- -------- --------
As at 30 June 93 60
--------------------------------------------- -------- --------
12 SHARE OPTIONS
On 31 January 2017 the Company granted 600,000 options to directors
and employees, exercisable at 7.50p per share. At the year end
all these options had vested and are exercisable at any time
prior to the fifth anniversary of the date of grant.
The fair value of the options granted during the year was determined
using the Black-Scholes pricing model. The significant inputs
to the model in respect of the options were as follows:
Date of grant 31 January 2017
Share price at date
of grant 5.50p
Exercise price per
share 7.50p
No. of options 600,000
Risk free rate 1.0%
Expected volatility 50%
Life of option 5 years
Calculated fair value
per share 1.9245p
The share-based payment charge for the year was GBPNil (2020:
GBPNil).
The share options movements and their weighted average exercise
price are as follows:
2021 2020
Weighted average Weighted average
exercise price exercise price
Number (pence) Number (pence)
----------------------- ------- ---------------- --------- ----------------
Outstanding at 1 July 330,000 7.50 490,000 7.50
Granted - - - -
Exercised - - (160,000) -
Lapsed - - - -
Outstanding at 30 June 330,000 7.50 330,000 7.50
--------------------------- ------- ---------------- --------- ----------------
13 SHARE CAPITAL
Number of Nominal Share
shares Value premium
GBP'000 GBP'000
------------------------------------ ------------ -------- ---------
AUTHORISED
At 30 June 2020 and 30 June 2021
Ordinary shares of 1p each 160,000,000 1,600
Deferred shares of 24p each 35,000,000 8,400
----------------------------------------- ------------ -------- ---------
10,000
----------------------------------------- ------------ -------- ---------
ISSUED AND FULLY PAID
At 30 June 2020 and 30 June 2021:
Ordinary shares of 1p each 35,135,395 351
Deferred shares of 24p each 11,435,062 2,745
----------------------------------------- ------------ -------- ---------
3,096 5,892
----------------------------------------- ------------ -------- ---------
The ordinary shares carry no rights to fixed income but entitle
the holders to participate in dividends and vote at Annual
and General meetings of the Company.
The restricted rights of the deferred shares are such that
they have no economic value.
14 LOAN NOTE EQUITY RESERVE
2021 2020
GBP'000 GBP'000
-------------------------------------------- -------- --------
Equity component of convertible loan notes
at 1 July 6 6
Equity component of convertible loan notes
at 30 June 6 6
------------------------------------------------- -------- --------
15 SHARE OPTION RESERVE
2021 2020
GBP'000 GBP'000
---------------------------- -------- --------
Brought forward at 1 July 23 23
Share based payment charge - -
---------------------------- -------- --------
Carried forward at 30 June 23 23
--------------------------------- -------- --------
16 RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company is exposed to a variety of financial risks which
result from both its operating and investing activities. The
Company's risk management is coordinated by the board of directors
and focuses on actively securing the Company's short to medium
term cash flows by minimising the exposure to financial markets.
MARKET PRICE RISK
The Company's exposure to market price risk mainly arises from
potential movements in the fair value of its investments. The
Company manages this price risk within its long-term investment
strategy to manage a diversified exposure to the market. If
each of the Company's equity investments were to experience
a rise or fall of 10% in their fair value, this would result
in the Company's net asset value and statement of comprehensive
income increasing or decreasing by GBP583,000 (2020: GBP516,000).
FOREIGN CURRENCY RISK
The Group holds investments and cash balances denominated in
foreign currencies and investments quoted on overseas exchanges;
consequently, exposures to exchange rate fluctuations arise.
The Group does not hedge its foreign currency exposure and
its liabilities in foreign currencies are limited to the trade
payables of TH Crestgate which are not material.
The carrying amounts of the Group's foreign currency denominated
monetary assets at the reporting date are as follows:
2021 2020
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
US Dollar 4,512 4,423
Canadian Dollar 1,537 615
Swiss franc 48 94
Australian Dollar 122 -
FOREIGN CURRENCY SENSITIVITY ANALYSIS
The Group is mainly exposed to the US Dollar and the Canadian
Dollar in respect of investments which are either denominated
in or valued in terms of those currencies. The following table
details the Group's sensitivity to a 5 per cent increase and
decrease in pounds sterling against the US Dollar, Canadian
Dollar and Swiss franc. The Group's exposure to the Australian
Dollar and the Euro are not considered material.
2021 2020
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
5% increase in exchange rate
US Dollar against GBP 226 221
5% decrease in exchange rate
against GBP (226) (221)
Canadian 5% increase in exchange rate
Dollar against GBP 77 31
5% decrease in exchange rate
against GBP (77) (31)
Swiss 5% increase in exchange rate
franc against GBP 2 5
5% decrease in exchange rate
against GBP (2) (5)
Australian 5% increase in exchange rate 6 -
Dollar against GBP
5% decrease in exchange rate (6) -
against GBP
-------------- ------------------------------------ ---------- ----------
CREDIT RISK
The Company's financial instruments, which are exposed to credit
risk, are considered to be mainly cash and cash equivalents
and the Company's receivables are not material. The credit
risk for cash and cash equivalents is not considered material
since the counterparties are reputable banks.
The Company's exposure to credit risk is limited to the carrying
amount of the financial assets recognised at the balance sheet
date, as summarised below:
2021 2020
GBP'000 GBP'000
---------------------------------------------------- ---------- ----------
Cash and cash equivalents 855 275
Other receivables 9 69
---------------------------------------------------- ---------- ----------
864 344
---------------------------------------------------- ---------- ----------
No impairment provision was required against other receivables
which are secured and not past due.
LIQUIDITY RISK
Liquidity risk is managed by means of ensuring sufficient cash
and cash equivalents are held to meet the Company's payment
obligations arising from administrative expenses.
CAPITAL RISK MANAGEMENT
The Company's objectives when managing capital are:
* to safeguard the Company's ability to continue as a
going concern, so that it continues to provide
returns and benefits for shareholders;
* to support the Company's growth; and
* to provide capital for the purpose of strengthening
the Company's risk management capability.
The Company actively and regularly reviews and manages its
capital structure to ensure an optimal capital structure and
equity holder returns, taking into consideration the future
capital requirements of the Company and capital efficiency,
prevailing and projected profitability, projected operating
cash flows, projected capital expenditures and projected strategic
investment opportunities. Management regards total equity as
capital and reserves, for capital management purposes.
17 FINANCIAL INSTRUMENTS
FINANCIAL ASSETS BY CATEGORY
The IFRS 9 categories of financial assets included in the balance
sheet and the headings in which they are included are as follows:
2021 2020
GBP'000 GBP'000
-------------------------------------------------- --------- ---------
Financial assets:
Cash and cash equivalents 855 275
Loans and receivables 9 69
Investments held at fair value through
profit and loss 5,822 5,315
6,686 5,659
------------------------------------------------------- --------- ---------
FINANCIAL LIABILITIES BY CATEGORY
The IFRS 9 categories of financial liability included in the
balance sheet and the headings in which they are included are
as follows:
2021 2020
GBP'000 GBP'000
-------------------------------------------------- --------- ---------
Financial liabilities at amortised cost:
Convertible unsecured loan notes 10 10
Trade and other payables 118 88
--------------------------------------------------- --- --------- ---------
128 98
------------------------------------------------------- --------- ---------
18 Contingent LIABILITIES AND CAPITAL COMMITMENTS
There were no contingent liabilities or capital commitments
at 30 June 2021 or 30 June 2020.
19 POST YEAR END EVENTS
There have been no material post year end events.
20 RELATED PARTY TRANSACTIONS
Key management personnel, as defined by IAS 24 'Related Party
Disclosures' have been identified as the Board of Directors,
as the controls operated by the Group ensure that all key decisions
are reserved for the Board of Directors. Details of the directors'
remuneration and the options granted to directors are disclosed
in the remuneration report.
21 ULTIMATE CONTROLLING PARTY
1.1 The Directors do not consider there to be a single ultimate
controlling party.
[1] No comment or fact stated in this update should be taken as
investment advice.
[2] Source: Bloomberg LLC
[3] International Monetary Fund, "World Economic Outlook:
Recovery During a Pandemic", October 7, 2021
[4] World Gold Council - Gold Demand Trends Annual Reviews,
2019, 2020 and Q2-2021
[5] Cerrado's production public stated guidance as of November
2021
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