TIDMMAFL
RNS Number : 4691G
Mineral & Financial Invest. Limited
30 March 2022
Mineral & Financial Investments Limited
Interim Results (unaudited) for the Six Months Ended 31 December
2021
HIGHLIGHTS:
-- Unaudited net earnings for the first 6 months of fiscal 2022 were GBP141,740 or 0.40p p/s
-- NAV per share at Dec 31, 2021 was 18.62p, up 15.7% year over year (2021: 16.09p)
-- The 5 Year Compound Annual Growth rate of the NAVPS +24.4%
and +34.5% for NAV is outperforming comparable yardsticks
-- Invested capital increased by 23.6% to GBP6,564,169 as of December 31, 2021
-- Lower year on year precious metal prices in the period slowed NAV growth.
-- The Company remains debt free, with a good cash balance and a
growing portfolio of 25 investments in the natural resource
sectors
GEORGE TOWN, CAYMAN ISLANDS, March 30, 2022 - 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 2021.
The Company generated a H1-2022 after-tax profit of GBP141,740
and a fully diluted EPS of 0.40p per share, this compares with
H1-2021 net earnings of GBP207,416 or 0.59p per share. The Net
Asset Value Per Share (NAVPS) as at the end of the December 31,
2021, quarter was 18.62p, up 15.7% from last year's NAVPS for the
same period of 16.09p. The Net Asset Value per share has grown at
an average of rate of 24.4% per year on a compounded basis since
31(st) December 2016, while the overall Net Asset Value (NAV) has
grown at a compound annual rate of 34.5%.
M&FI NAVPS vs. FTSE 350 Mining Index & GSCI - Indexed
Performance
(Chart 1)
http://www.rns-pdf.londonstockexchange.com/rns/4691G_1-2022-3-29.pdf
CHIEF EXECUTIVE'S STATEMENT:
The Company has a strong cash position of GBP232,303, as we
reinvested much of the cash inflow in the final quarter of the
previous financial year but still retain adequate cash resources.
Our modest NAV growth Quarter on Quarter was despite a decline in
precious metal prices on a quarter over quarter basis and what we
perceive to be a continued disconnect between commodity prices and
the valuation of the companies producing the respective
commodities. Additionally, on a year over year basis the DXY Index
(US dollar Trade Weighted Currency Index) was up 7.3%. As most
currencies are denominated in US$, a rising US dollar normally has
a depressing effect on the dollar denominated commodities. It is
our view that precious metals were generally dragged down by the US
dollar's performance, however, in spite of the rising US dollar, we
observed base metals, and most food commodities rose year over year
in the period ending Dec. 31, 2021.
The following is a summary of the Company's NAV Performance for
the 5 years to Dec. 31 ,2021:
M&FI - Financial Performance Summary
(Fig.1)
31 Dec 31 31 Dec 31 Dec 31 Dec 31 Dec CAGR (%)
2016[1] Dec 2018 2019 2020
2017(1)
FYE FYE Q2 Q2 Q2 2021 2021/2016
Q2
-------- --------
NET ASSET VALUE (NAV)
(,000) GBP1,494 GBP2,603 GBP4,393 GBP5,361 GBP5,681 GBP6,580 34.5%
-------- -------- -------- -------- -------- -------- ----------
NAV Per Share (FD) 6.2p 7.43p 12.43p 15.19p 16.11p 18.62p 24.4%
-------- -------- -------- -------- -------- -------- ----------
FTSE 350 Mining Index 14,799 18,719 17,705 19,049 21,699 16,679 5.4%
-------- -------- -------- -------- -------- -------- ----------
Goldman Sachs Commodity
Index 398.20 442.44 374.33 439.58 409.46 561.18 5.5%
-------- -------- -------- -------- -------- -------- ----------
The most notable change in capital markets in the past 6 months,
since our Fiscal Year began July 1(st) , 2021 is that interest
rates in the top 20 capital market have risen, and in the UK
10-year government yields have risen 195% from their artificially
low levels to 1.68% (as of March 24(th) , 2022). US Government 10
Yr. Bond yields are up 86% to 2.38%. These rises are in part due to
increased economic activity as COVID 19 constraints are being
rolled back. Also propelling interest rates upwards are increasing
global inflationary measures. In February 2022, the annual
inflation rate in the UK was 6.2% [2] , up from 0.7% in March 2021.
Higher inflation and higher interest rates should normally
influence asset and financial valuations, yet there has not been a
meaningful change in equity market valuations. The Ukrainian crisis
did not occur until our Fiscal Q3-2022 period, which we will
address in our next shareholder report.
Amongst the equity markets which we track, on a year on year
basis, as at Dec 31(st) ., 2021, the only 2 major equity markets
were down - Shanghai's CSI 300 Index (-5.6%) and the Hong Kong's
Hang Seng Index (-14.5%). The USA equity markets, as measured by
the S&P500 (+27.6%) led equity markets and closer to home the
FTSE 100 (+16.2%) generated some good returns. Despite Commodities
rising sharply in the period, the Reuters/Jefferies CRB Index rose
38.5%, the FTSE 300 Mining Index underperformed the overall market
in the UK declining 11.3% on a yr./yr. basis.
We continue to believe that the inflationary pressures triggered
by manufacturing and transportation delays caused by COVID 19 are
not "transitional" and will require policy adjustments by central
bankers if they are to be constrained. Therefore, we believe that
the mid-term outlook for our commodity weightings remains quite
positive. With growing levels of inflation, we believe that we must
maintain liquidity but recognize that there is a growing cost to
holding significant quantities of cash in an inflationary period.
In the quarter we invested GBP346,416 of our cash during the
quarter. As at Dec 31, 2021, period, M&FI was 96.6%
invested.
Portfolio Allocation by Commodity Grouping
(Fig. 2)
Q2-2021 Q2-2020 % Change
Cash GBP232,303 GBP577,369 (59.8%)
-------------- -------------- ---------
Precious Metals GBP3,193,920 GBP2,380,740 34.2%
-------------- -------------- ---------
Base Metals GBP2,889,722 GBP2,483,953 16.3%
-------------- -------------- ---------
Energy, Tech
& Misc. GBP480,527 GBP446,201 8.2%
-------------- -------------- ---------
Total GBP6,796,472 GBP5,888,263 15.4%
-------------- -------------- ---------
Your Company's portfolios have expanded to now include 25
distinct investments. M&FI's investable funds are broken down
as follows: Precious metals represent 47%, and; Base metals
represent 43% of our investments; while Energy Tech and
Miscellaneous investments represent 7% of the remaining investable
funds, as at the end of Q2 period. The growth the relative weight
of precious metal within the overall portfolio is partly explained
by the 34.2% year over year growth in the value of our precious
metal holdings, double the performance of our broad commodity
groupings. This performance validates our strategy of re-increasing
our precious metals weighting last year
Portfolio Allocation by Portfolio Grouping
(Fig. 3)
Q2-2021 Q2-2020 % Change
Cash GBP230,303 GBP577,369 (59.8%)
-------------- -------------- ---------
Tactical Portfolio GBP2,106,760 GBP1,302,773 61.5%
-------------- -------------- ---------
Strategic Portfolio GBP4,457,409 GBP4,008,121 11.3%
-------------- -------------- ---------
Total GBP6,796,472 GBP5,888,263 15.4%
-------------- -------------- ---------
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 elsewhere when needed. Any changes in our
tactical holdings in precious metals are trading decisions around a
long-term bullish attitude towards precious metals. The Tactical
portfolio grew by 61.5% year on year during the quarter.
Our largest tactical holding is Cerrado Gold. We initially
invested in Cerrado at US$0.45 and it is now trading at C$1.72 per
share and represents 5.84% of our investible funds. Barrick Gold is
now our second largest tactical investment, representing 2.21% of
our total investable funds.
Our third largest holding is the Van Eck Gold Miner index. We
use this index solely as a quick means to increase our weighting in
the gold miners and sell portions of it to fund specific
investments in the sector. During the past year we re-categorised
our investment in Ascendant Resources as a Tactical Investment. The
ASND shareholding corrected in value by 18.3% in the quarter, after
a strong run-up in the summer of 2021. We believe that it was
subject to end of year tax-loss selling by taxable Canadian
investors.
The Tactical Portfolio, as of December 31, 2021, had the
following holdings (Fig.4)
Company Development Type of Primary Geographic
Stage Security Commodity Area of Activities
Aclara Resources Development Common Equity Ionic Clay Chile
Inc and Rare
Earths
----------------- -------------- ----------------- --------------------
Ascendant Resources Exploration Common Equity Zn, Pb, Portugal
Cu, Au, Ag
----------------- -------------- ----------------- --------------------
ATF Culpeo Exploration Common Equity Cu Chile
Minerals
----------------- -------------- ----------------- --------------------
Barclays Bank Food Commodities Derivative Food Commodities N/M
----------------- -------------- ----------------- --------------------
Barrick Gold Production Common Equity Gold, Copper Global
----------------- -------------- ----------------- --------------------
Cerrado Gold Production Common Equity Gold Argentina /
/ Exploration Brazil
----------------- -------------- ----------------- --------------------
Coeur Mining Production Common Equity Gold Americas
----------------- -------------- ----------------- --------------------
East West Petroleum Production Common Equity Oil & Gas New Zealand
/ Exploration / Romania
----------------- -------------- ----------------- --------------------
Equinox Gold Production Common Equity Gold North America
----------------- -------------- ----------------- --------------------
Fiore Gold Production Common Equity Gold USA and Central
(now Calibre America
Mining)
----------------- -------------- ----------------- --------------------
Fortuna Silver Production Common Equity Gold / Silver Argentina,
Mines Peru, Mexico,
Cote d'Ivoire,
Burkina Faso
----------------- -------------- ----------------- --------------------
Fresnillo Plc Production Common Equity Gold / Silver Mexico
----------------- -------------- ----------------- --------------------
Hochschild Production Common Equity Gold / Silver Peru & Argentina
Mining Plc
----------------- -------------- ----------------- --------------------
Kinross Gold Production Common Equity Gold Global
----------------- -------------- ----------------- --------------------
Northern Star Production Common Equity Gold Australia /
Resources Alaska
----------------- -------------- ----------------- --------------------
Orla Mining Production Common Equity Gold Mexico / Panama
/ Development
----------------- -------------- ----------------- --------------------
Resolute Mining Production Common Equity Gold Australia /
Mali, Senegal
----------------- -------------- ----------------- --------------------
VanEck Vectors Production ETF Gold, et Global
Gold Miners al.
----------------- -------------- ----------------- --------------------
UBS Gold Metal ETF Gold N/M
----------------- -------------- ----------------- --------------------
Zimplats Holding Production Common Equity PGM Zimbabwe
----------------- -------------- ----------------- --------------------
ZKB Gold ETF Metal ETF Gold N/M
----------------- -------------- ----------------- --------------------
ZKB Silver Metal ETF Silver N/M
ETF
----------------- -------------- ----------------- --------------------
We added Coeur Mining, a US based, precious metals miner whose
mining operations span the Americas from Alaska to Bolivia. We
added Fiore Gold, a Canadian domiciled company with Nevada gold
mining assets, and gold resources totalling 3.0M/oz at a grade of
0.79g/t. Fiore has since the period end been acquired by Calibre
Mining, also a Canadian Mining company with mining Assets in
Central America. We also added Hochschild, a Peruvian Mining
company listed on the LSE, Kinross a Canadian gold mining Company
with assets around the world (this position has since been sold),
and lastly, we acquired Orla Mining a Canadian company initiating
production from its Camino Rojo mine in Mexico which a
pre-feasibility stage project, Cerro Quema, in Panama.
Strategic Portfolio:
The Strategic Portfolio holds investments which are longer term
in nature and which we believe had unique investment
characteristics at the time when we invested in these companies
and/or assets. These longer-lived investments require M&FI to
assess the four keystone foundations to a successful investment in
the natural resource sectors: 1. Management; 2. Finance; 3.
Location, and 4. Geology. We can assist in the improvement of the
first two, however, we cannot affect the location (i.e.
jurisdiction and logistics) or the geology of the asset, and
therefore must evaluate these investments more cautiously on the
latter two keystones. As such, we are constantly reviewing
potential investments filtering through the many underfunded
projects left struggling by 10 years of sector underperformance,
neglect, and underfunding. The Board continues to be optimistic
towards precious metals generally and certain specific base metals
that should benefit from the evolving needs of the planet. We are
aggressively searching for suitable investments that will provide
our shareholders the benefit of a world evolving towards increased
renewable energy sources, requiring advanced energy sources all of
which will be increasingly stored in various power storage
technologies. We are overweighted in zinc which is used for
stainless steel, battery technology, nutrition and anti-corrosion
applications. We are also overweighted precious metals in both
portfolios. We continue to review investments in other commodities,
notably copper, with the potential to outperform.
Our partner Ascendant continues to make progress on the Lagoa
Salgada project and is working very diligently to advance towards
completing a Feasibility Study by December 22, 2022. Redcorp
Empreedimentos Mineiros Lda. (Funded by Ascendant Resources as part
of the Earn-In agreement of June 2018) is currently completing a
drilling program, partly for exploration, but also for further
metallurgical testing purposes. Additionally, Redcorp has initiated
an Environmental Impact Study (EIS) on the Lagoa Salgada project.
Moreover, we have been having some constructive discussions with
management which could lead to possible project financing
solutions.
Golden Sun Exploration has achieved a very important watershed
as the Costa Rican government re-instated its mining licence on its
BellaVista mine. Originally Golden Sun's BellaVista was solely an
Open Pit mine, but the new license allows it Golden Sun to increase
its mine production and use CIL extraction technology. The mine
plan call for higher grade underground mining. Golden Sun has been
producing on a small scale as it bulk tested the ore with small
scall heap leach technology. The net result is a more
environmentally prudent and responsible means of extracting or
producing gold and dealing with the mining residue. We believe that
the next 12 months should lead to the next step upwards phase for
the BellaVista Mine.
Ideon Technologies Inc. is a world 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, Ideon's technology maps
the intensity of cosmic-ray muons underground and construct
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. Ideon
is working with several world leading mining companies, such as
BHP, Orano, Teck Corp, Nyrstar and several others, in applying
Ideon's technology to their exploration programs. Our initial
investment at C$0.375 p/s was followed by a financing at C$1.00 p/s
nine months later. We anticipate that another financing round will
be sought in 2022 and should allow for a review of our holding
value of the investment.
M&FI are currently reviewing several other investment
opportunities. The directors look forward to providing shareholders
with more information on all the investments, in due course if they
progress.
On behalf of the Board
Mark T. Brown, Chairman
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
FOR MORE INFORMATION:
Jacques Vaillancourt, Mineral & Financial Investments Ltd. +44 777 957 7216
Katy Mitchell and Ben Good, WH Ireland Limited +44 207 220 1666
Jon Belliss, Novum Securities Limited +44 207 399 9400
Statement of comprehensive Income
for the 6 months ended 31 December 2021
UNAUDITED UNAUDITED AUDITED
6 months 6 months 12 months
to to to
31 December 31 December 30 June
2021 2020 2021
Note GBP'000 GBP'000 GBP'000
-------------------------- ------ ------------- ------------- ----------
Continuing operations:
Investment income 50 2 96
Fee revenue - - 3
Net gains on investments 233 372 1,263
Total income 283 374 1,362
Operating expenses (198) (152) (341)
Other gains and
losses 57 (4) (24)
---------------------------------- ------------- ------------- ----------
Profit before taxation 142 218 997
Taxation expense - (11) (33)
---------------------------------- ------------- ------------- ----------
Profit for the period
attributable to owners
of the Company 142 207 964
Earnings per share
attributable to owners pence pence pence
of the Company during
the period 3
Basic: 0.4 0.6 2.7
Diluted: 0.4 0.6 2.7
---------------------------------- ------------- ------------- ----------
Statement of Financial Position
as at 31 December 2021
UNAUDITED UNAUDITED AUDITED
31 December 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
----------------------------- ------------ ------------ ---------
CURRENT ASSETS
Financial assets 6,564 5,311 5,822
Trade and other receivables 14 81 27
Cash and cash equivalents 233 578 855
------------------------------ ------------ ------------ ---------
6,811 5,918 6,704
----------------------------- ------------ ------------ ---------
CURRENT LIABILITIES
Trade and other payables 128 156 163
Convertible unsecured
loan notes 10 10 10
------------------------------ ------------ ------------ ---------
138 166 173
----------------------------- ------------ ------------ ---------
NET CURRENT ASSETS 6,683 5,752 6,531
------------------------------ ------------ ------------ ---------
NON-CURRENT LIABILITIES
Deferred tax provision (93) (71) (93)
NET ASSETS 6,580 5,681 6,438
------------------------------ ------------ ------------ ---------
EQUITY
Share capital 3,096 3,096 3,096
Share premium 5,892 5,892 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 (18,173) (19,072) (18,315)
------------------------------ ------------ ------------ ---------
SHAREHOLDERS' EQUITY 6,580 5,681 6,438
------------------------------ ------------ ------------ ---------
Statement of Changes in equity
for the 6 months ended 31 December 2021
Loan Share
Share Share 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 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
Profit for the
6 months to
30 June 2021 - - - - - 757 757
------------------ -------- -------- -------- -------- --------- ----------- -------
At 30 June 2021 3,096 5,892 6 23 15,736 (18,315) 6,438
------------------ -------- -------- -------- -------- --------- ----------- -------
Profit for the
6 months to
31 December 2021 - - - - - 142 142
------------------ -------- -------- -------- -------- --------- ----------- -------
At 31 December
2021 3,096 5,892 6 23 15,736 (18,173) 6,580
------------------ -------- -------- -------- -------- --------- ----------- -------
Statement of Cash flows
for the 6 months ended 31 December 2021
UNAUDITED UNAUDITED AUDITED
6 months 6 months 12 months
to to to
31 December 31 December 30 June
2021 2020 2021
GBP'000 GBP'000 GBP'000
--------------------------------- ------------- ------------- ----------
OPERATING ACTIVITIES
Profit/(loss) before taxation 142 218 997
Adjustments for:
Net gains on investments (233) (372) (1,263)
Investment income (50) (2) (96)
---------------------------------- ------------- ------------- ----------
Operating cashflow before
working capital changes (141) (156) (362)
(Increase)/decrease in trade
and other receivables 13 52 54
Increase/(decrease) in trade
and other payables (35) 29 36
---------------------------------- ------------- ------------- ----------
Net cash outflow from operating
activities (163) (75) (272)
---------------------------------- ------------- ------------- ----------
INVESTING ACTIVITIES
Purchase of financial assets (811) (906) (2,269)
Disposal of financial assets 343 1,282 3,116
Investment income 9 2 5
Net cash (outflow)/inflow
from investing activities (459) 378 852
---------------------------------- ------------- ------------- ----------
Net (decrease)/increase in
cash and cash equivalents (622) 303 580
Cash and cash equivalents
at start of period 855 275 275
Cash and cash equivalents
at end of period 233 578 855
---------------------------------- ------------- ------------- ----------
Notes to the unaudited interim statement
for the 6 months ended 31 December 2021
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 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 consistent with those set out in the
Company's Annual Report and Accounts for the year ended 30 June
2021.
This interim financial information for the 6 months to 31
December 2021 was approved by the board on 30 March 2022.
The unaudited interim financial information for the 6 months to
31 December 2021 does not constitute statutory accounts. The
comparative figures for the year ended 30 June 2021 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 35,135,395 35,135,395
Weighted average number of
shares for calculating fully
diluted earnings per share 35,465,395 35,192,285 35,204,897
------------------------------- ------------- ------------- -----------
4. The interim report is available to view and download from the
Company's website: www.mineralandfinancial.com
[1] Audited Fiscal Year end results
[2] UK Office for National Statistics
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END
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