Mineral & Financial Invest. Limited Interim Results for 6 Months Ended 30 June 2017 (9309Q)

TIDMMAFL

RNS Number : 9309Q

Mineral & Financial Invest. Limited

18 September 2017

18 September 2017

Mineral & Financial Investments Limited

("MAFL" or "the Company")

Unaudited Interim Results for the Six Months Ended 30 June 2017

Mineral & Financial Investments Limited today announces its unaudited interim results for the six months ended 30 June 2017.

   --     NAV Up 12.8% In First Half Of Fiscal 2017 
   --     Weak GBP Is A Net Positive For Mineral & Financial Investments 
   --     Drill Program Completed at Lagoa Salgada Investment; Awaiting Results From The Last 3 Holes 
   --     Independent Geological Consulting Group Retained To Update Resource Estimate 
   --     Updated Resource Estimated Expected Before Year End 

Chairman's Statement

The Company realised a net loss of GBP101,000 during the six months to June 2017, as against a net profit of GBP209,000 recorded during the corresponding period in 2016. On a per share basis, there was a loss per share of 0.3p, as against earnings per share of 1.0p for the corresponding period a year ago. MAFL's NAV at the end of the period was 7.05 pence, up 12.8% from the end of the last financial year, when the NAV was 6.25 pence

Since the Brexit vote of June 13, 2016 the GBP has declined 19% (vs. Euro). A weaker GBP devalues the UK's domestic products internationally and makes them more competitive in global markets. The UK's GDP slowdown in growth comes despite currency's decline. Conversely, a weaker GBP is potentially very positive for all companies with large proportions of their revenues, earnings or assets outside of the UK, as their foreign assets are worth more in GBP. Virtually all of our investments, excluding our GBP917,554 of cash and cash equivalents, operate outside the UK or are valued in non- GBP currencies.

Commodity markets are predominantly valued in USD. The USD has, after the furious optimism caused by the election of a new US president, subsided. The USD has declined versus most global currencies in the past year: on a trade weighted basis vs. a basket of currencies it's now -9.7% over the past 12 months. This has resulted in the USD pricing of most commodities being pushed upwards during the time period.

Since our decision to seek zinc investments about 30 months ago, we have invested in TH Crestgate and own 49% of this private Swiss investment company, which itself acquired three zinc properties. The Spanish properties were sold at a profit and the capital re-invested in the Lagoa Salgada project in Portugal. TH Crestgate has invested in 2 drill programs focussing on the LS-1 and Central Sector of the Lagoa Salgada project. The drill programs have just been completed and we await the final drill results. It should be noted that our investment in TH Crestgate is recorded at cost and is not marked to market, as are our other assets. We believe that this is under-valuing the investment, but embrace the prudential nature of this methodology.

TH Crestgate has retained AGP Mining Consultants to complete a resource update, which will incorporate the positive drill results from the two drilling programs in 2017. The AGP team was on site during the week of September 11, 2017. The objective of the exploration work has been to increase the resource from the current 4.5M tonnes to 8.0Mt to 10.0Mt. The resource update report will be completed and available before year-end.

We continue to seek new investment opportunities. We continue to favour commodities that will benefit from the evolution away from the combustion of hydrocarbons, such as copper, zinc, and cobalt. There has been a rally in base metal prices that will likely consolidate over the next 6 months. We hope that this will create the valuation opportunities that are seeking.

On behalf of the Board

Jacques Vaillancourt

Executive Chairman

Chief Operating Officer's Statement

The base metals complex performed relatively well during the first half of the year, buoyed by optimism about planned infrastructure spending from Donald Trump, strong demand from China, and a better economic picture in general globally.

Even iron ore - long held back by the tendency of its major producer to compensate for a low price with increased volumes - at last enjoyed some pricing strength.

How much of this sector strength will endure once the 19(th) Chinese Communist Party Congress is over in October remains an open question, and we remain comfortable in holding our gold ETF as a hedge against political risk.

During the period the performance of our quoted equity and ETF portfolio was broadly flat, with slight downward adjustments to the valuation of our holdings in Glencore and in our gold, silver and platinum ETFs.

Post period-end though, those falls have been reversed as commodities demand has remained strong over the summer, and the gold price has surged on dollar weakness and the renewed political risk of conflict with North Korea.

Among the largest of our non-quoted investment holdings, we note that Cap Energy continues to make progress in Guinea-Bissau and that improved terms have been granted by the government over Block 1 and Block 5B. We are also following with interest the ongoing dispute with a former partner about the acquisition of seismic data on the Djifere offshore block Senegal. The aggressive position Cap has taken with its defaulting former partner will very likely result in a response.

Alastair Ford

Chief Operating Officer

For further information please call:

 
Mineral & Financial Investments 
 Limited 
 Jacques Vaillancourt             [phone] 
Katy Mitchell 
 W H Ireland                      [phone] 
 

Jon Belliss

Beaufort Securities [phone]

Statement of comprehensive Income

for the 6 months ended 30 June 2017

 
                                         UNAUDITED   UNAUDITED          AUDITED 
                                          6 months    6 months        12 months 
                                                to          to               to 
                                           30 June     30 June      31 December 
                                              2017        2016             2016 
                                 Note      GBP'000     GBP'000          GBP'000 
------------------------------  ------  ----------  ----------  --------------- 
 Continuing operations: 
 Investment income                               -           -                - 
 Net gains/(losses) on 
  investments                                    4         209              286 
 
 Total income                                    4         209              286 
 
 Operating expenses                          (103)        (69)          (175) 
--------------------------------------  ----------  ----------  ------------- 
 Operating profit/(loss)                      (99)         140            111 
 Finance cost                                    -           -                - 
 
 Profit/(loss)before taxation                 (99)         140              111 
 
 Taxation expense                                -           -                - 
 
 Profit/(loss)for the 
  period attributable to 
  owners of the Company                       (99)         140              111 
 
 
 Earnings/(loss) per share 
  attributable to owners                     pence       pence            pence 
  of the Company during 
  the period                       3 
 Basic:                                      (0.3)         1.0              0.6 
 Diluted:                                    (0.3)         1.0              0.6 
--------------------------------------  ----------  ----------  --------------- 
 

Statement of Financial Position

as at 30 June 2017

 
                                 UNAUDITED   UNAUDITED       AUDITED 
                                   30 June     30 June   31 December 
                                      2017        2016          2016 
                                   GBP'000     GBP'000       GBP'000 
-----------------------------   ----------  ----------  ------------ 
 
 CURRENT ASSETS 
 Financial assets                    1,602         961         1,274 
 Trade and other receivables            10           9             7 
 Cash and cash equivalents             918         137           274 
------------------------------  ----------  ----------  ------------ 
                                     2,530       1,107         1,555 
 -----------------------------  ----------  ----------  ------------ 
 
 CURRENT LIABILITIES 
 Trade and other payables               76          48            50 
 Convertible unsecured 
  loan notes                            10          10            10 
------------------------------  ----------  ----------  ------------ 
                                        86          48            60 
 -----------------------------  ----------  ----------  ------------ 
 NET CURRENT ASSETS                  2,444       1,056         1,495 
 
 
 NET ASSETS                          2,444       1,049         1,495 
------------------------------  ----------  ----------  ------------ 
 
 EQUITY 
 Share capital                       3,092       2,885         2,985 
 Share premium                       5,866       4,559         4,934 
 Loan note equity reserve                6           6             6 
 Share option reserve                   23          12            12 
 Capital reserve                    15,736      15,736        15,736 
 Retained earnings                (22,279)    (22,149)      (22,178) 
------------------------------  ----------  ----------  ------------ 
 Shareholders' equity                2,444       1,049         1,495 
------------------------------  ----------  ----------  ------------ 
 

Statement of Changes in equity

for the 6 months ended 30 June 2017

 
                                          Loan     Share 
                     Share     Share      note    option   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 31 December 
 2015                2,885     4,559         6        12    15,736     (22,289)      909 
Profit for the 
 6 months to 
 30 June 2016            -         -         -         -         -          140      140 
At 30 June 2016      2,885     4,559         6        12    15,736     (22,149)    1,049 
Loss for the 
 6 months to 
 31 December 
 2016                    -         -         -         -         -         (29)     (29) 
Share issues           100       375         -         -         -            -      475 
At 31 December 
 2016                2,985     4,934         6        12    15,736     (22,178)    1,495 
Loss for the 
 6 months to 
 30 June 2017            -         -         -         -         -        (101)    (101) 
Share issues           107       932         -         -         -            -    1,039 
Share based 
 payments                -         -         -        11         -            -       11 
 
At 30 June 2017      3,092     5,866         6        23    15,736     (22,279)    2,444 
----------------  --------  --------  --------  --------  --------  -----------  ------- 
 

Statement of Cash flow

for the 6 months ended 30 June 2017

 
                                   UNAUDITED   UNAUDITED        AUDITED 
                                    6 months    6 months      12 months 
                                          to          to             to 
                                     30 June     30 June    31 December 
                                        2017        2016           2016 
                                     GBP'000     GBP'000        GBP'000 
-------------------------------   ----------  ----------  ------------- 
 
 OPERATING ACTIVITIES 
 Profit/(loss) before taxation         (101)         140            111 
 Adjustments for: 
 Loss on disposal of financial 
  assets                                   -          58            169 
 Fair value adjustment 
  to financial assets                    (4)       (267)          (455) 
 Investment income                         -           -              - 
 Share based payment charge               11           -              - 
-------------------------------   ----------  ----------  ------------- 
 Operating cashflow before 
  working capital changes               (94)        (69)          (175) 
 (Increase)/decrease in 
  trade and other receivables            (3)         (3)            (1) 
 Increase/(decrease) in 
  trade and other payables                26           7              9 
--------------------------------  ----------  ----------  ------------- 
 Net cash outflow from 
  operating activities                  (71)        (65)          (167) 
--------------------------------  ----------  ----------  ------------- 
 INVESTING ACTIVITIES 
 Purchase of financial 
  assets                               (324)       (155)          (392) 
 Disposal of financial 
  assets                                   -          94             95 
 Net cash (outflow)/inflow 
  from investing activities            (324)        (61)          (297) 
--------------------------------  ----------  ----------  ------------- 
 FINANCING ACTIVITIES 
 Net proceeds of share 
  issues                               1,039           -            475 
--------------------------------  ----------  ----------  ------------- 
 Net cash outflow from 
  financing activities                 1,039           -            475 
--------------------------------  ----------  ----------  ------------- 
 
 Net increase/(decrease) 
  in cash and cash equivalents           644       (126)             11 
 Cash and cash equivalents 
  at start of period                     274         263            263 
 
 Cash and cash equivalents 
  at end of period                       918         137            274 
--------------------------------  ----------  ----------  ------------- 
 

Notes to the unaudited interim statement

for the 6 months ended 30 June 2017

1. General information

The Company is a limited company quoted on AIM, a market of the London Stock Exchange, and is registered in the Cayman Islands.

The address of its registered office is 190 Elgin Avenue, George Town, Grand Cayman, KY1-9005, Cayman Islands. The financial statements are presented in Pounds Sterling which is the Company's functional and presentational currency.

2. Basis of preparation

The interim financial statements of Mineral & Financial Investments Limited have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and on the historical cost basis using the accounting policies which are consistence with those set out in the Company's Annual Report and Accounts for the year ended 31 December 2016.

This interim financial information for the six months to 30 June 2017 was approved by the board on 15 September 2017.

The unaudited interim financial information for the 6 months ended 30 June 2017 does not constitute statutory accounts. The comparative figures for the year ended 31 December 2016 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 
                                    30 June      30 June    31 December 
                                       2017         2016           2016 
                                    GBP'000      GBP'000        GBP'000 
 ----------------------------  ------------  -----------  ------------- 
  Weighted average number 
   of shares for calculating 
   basic earnings per share      31,169,461   14,034,562     17,941,666 
  Weighted average number 
   of shares for calculating 
   fully diluted earnings 
   per share                    *31,169,461   14,552,854     18,441,666 
 ----------------------------  ------------  -----------  ------------- 
 

*The weighted average number of shares used for calculating the fully diluted loss per share for the 6 months ended 30 June 2017 is the same as that used for calculating the basic loss per share as the loss for the period has an anti-dilutive effect.

This information is provided by RNS

The company news service from the London Stock Exchange

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September 18, 2017 02:00 ET (06:00 GMT)