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Andalas Energy and Power Plc, the AIM traded Indonesian focused energy company (AIM: ADL), notes the announcement today regarding Beaufort Securities Limited and Beaufort Asset Clearing Services Limited being placed into insolvency and that the Financial Conduct Authority has imposed requirements on BSL and BACSL to cease all regulatory activity.
BSL is joint broker to the Company. As a result of the requirements imposed by the FCA, BSL will no longer be able to provide broking services to the Company. Cantor Fitzgerald will continue as nominated adviser and will now perform the role of sole broker to the Company.
For Further Information:
|Simon Gorringe||Andalas Energy and Power Plc||Tel: +62 21 2783 2316|
|Nick Tulloch / David Porter||Cantor Fitzgerald Europe||Tel: +44 20 7894 7000|
Prairie Mining #PDZ – Tier 1 assets & perfect macro. Buy at 30p, target price 90p say Beaufort Securities
Prairie Mining recently published an update describing the coking coal macro in Europe and Poland. The release focused on the European Commission’s 2017 critical materials list, the global lack of new coking coal projects, and the Polish government’s support for new modern coal mines. We also note how the new Polish Prime Minister is pushing the Polish-Chinese business agenda, which will benefit Prairie Mining.
Mateusz Morawiecki recently became Prime Minister and he strongly supports Chinese investment into Poland. Amongst other things, he has recently said “to encourage Chinese companies to invest more capital in our country” and “Poland wants to actively participate in the One Belt, One Road project”.
This agenda fits perfectly with Prairie’s strategy of having China Coal construct Jan Karski using low-cost Chinese debt. And we believe support from the new Polish Prime Minister will ensure Jan Karski reaches the point of being fully permitted and funded. As with all major industrial projects, top level government support is essential.
Prairie Mining shares have underperformed our expectations in 2H17 (the shares increased 50% in 1H17). The lack of buying could be due to negative general media surrounding coal. However, Prairie is a coking coal not thermal coal company and has strong political and European macro support . We anticipate 2018 being a good year for Prairie shares and reiterate our BUY recommendation and 90p price target.
Full research note here Beaufort_PDZ_181217
Tertiary Minerals plc, the AIM traded company building a strategic position in the fluorspar sector, is pleased to announce that it has raised £500,000 before expenses by way of a placing of 41,666,670 new ordinary shares at 1.2 pence per share by the Company’s joint broker Beaufort Securities Ltd. The Placing Shares will rank pari-passu with all existing ordinary shares in the Company.
The Company is planning to use the funds for project work, to include:
- Progressing the evaluation and due diligence of acquisition opportunities – engaged in discussions and technical due diligence for shortlisted projects capable of generating revenue and profits in the near-term, with discussions being reasonably advanced on one particular project
Storuman Fluorspar Project, Sweden
- Progressing the re-assessment process of the Exploitation (Mine) Permit by the Swedish Mining Inspectorate – additional information currently being prepared by the Company for the Swedish Mining Inspectorate in response to stakeholder responses requesting further detail in relation to the impact of proposed operations within the wider surrounding area
MB Fluorspar Project, Nevada, USA
- Progressing the Scoping Study level bench scale metallurgical testwork ongoing at SGS Lakefield in Canada with the aim of producing commercial grade acid-spar
Lassedalen Fluorspar Project, Norway
- Progressing the technical and legal due diligence for the purchase from Hydro of land and mine workings associated with the Company’s fluorspar Mineral Resource
The Placing is being made under existing shareholder authorities. Application will be made to the London Stock Exchange for 41,666,670 ordinary shares of 0.01 pence in Tertiary to be admitted to trading on AIM, and it is expected that Admission will occur on or around 20 December 2017.
In accordance with Financial Conduct Authority’s Disclosure and Transparency Rules, following the issue and Admission, the total issued share capital of the Company with voting rights will be 358,743,603 ordinary shares.
The above figure of 358,743,603 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the DTR.
Richard Clemmey, Managing Director of the Company, commented today: “Strong investor interest has enabled us to complete this placing, the proceeds of which will provide funds to progress with the evaluation and due diligence of acquisition opportunities and the ongoing development of our fluorspar projects.”
Tertiary Minerals plc
Richard Clemmey, Managing Director
Patrick Cheetham, Executive Chairman
+44 (0) 1625 838 679
SP Angel Corporate Finance LLP
Nominated Adviser & Joint Broker
Ewan Leggat/Lindsay Mair
+44 (0) 20 3470 0470
Beaufort Securities Ltd
+44 (0)20 7382 8300
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement
Notes to Editors
Tertiary Minerals plc (ticker symbol ‘TYM’) is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada, USA (MB Project).
The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company’s proposed strategy, plans and objectives or to the expectations or intentions of the Company’s directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.
Tertiary Minerals #TYM – Broker Views following landmark agreement with global Commodities trading giant Possehl Erzkontor GmbH & Co.
Broker Views following landmark agreement with global Commodities trading giant Possehl Erzkontor GmbH & Co.
SP Angel: Tertiary Minerals* (TYM LN) 0.7p, Mkt Cap £2.2m – Securing fluorspar off take agreements – The MoU and offtake agreement and its link to financing is an important milestone for Tertiary as it provides a route to market for potential future fluorspar production as well as access to finance to help put the projects into production.
Beaufort Securities: This looks like an important relationship for Tertiary, and one which could enable Tertiary to complete a near term acquisition. If the acquisition is good enough quality, we’d expect Possehl to provide the funding, technical and marketing support. That would lead to a transformation for Tertiary. We maintain a Speculative Buy recommendation.
Andalas Energy & Power (ADL.L)
Speculative Buy at 0.06p
Target Price: 0.20p
Andalas is a wellhead gas power plant developer focused on the Indonesian island Sumatra. It’s working with Indonesia’s National Oil Company (Pertamina), and a division of state-owned construction company PT PP (Persero). Together they are developing gas power projects where grid infrastructure is short of electricity.
Andalas’ relationship with Pertamina was established in 2016 through a MOU designed to “fast-track commercialisation” of marginal gas fields. Pertamina will be responsible for delivering the gas, Andalas and partners such as PT PP will be responsible for developing the power facility using modular plants and selling power to the national power utility (PLN).
Management is very experienced in Indonesian gas and has a long-standing relationship with Pertamina. This relationship underpins the investment case. Also key is Sumatra’s gas reserves, low electrification and high priority policy to support power projects. Andalas provides unique, low-cost exposure to Indonesia’s fast-growing power sector and we recommend a Speculative Buy.
Beaufort Securities acts as corporate broker to Andalas Energy & Power plc
Andalas Energy and Power Plc, the AIM traded Indonesian focused energy company (AIM: ADL) has issued a £500,000 zero coupon loan note which will strengthen the Company’s working capital position while it continues to progress the Company’s strategy.
The Loan Note, which has been issued to Sandabel Capital L.P. is secured against the assets of the Company and has a par value of £500,000 and is repayable in cash on or before 28 April 2017. No interest is payable over the term of the Loan Note, which has been issued at a 20% discount to par value. The cash proceeds received from the lender following the issue of the Loan Note are therefore £400,000.
In the event that the Loan Note is not repaid by the Maturity Date, the Loan Note holder has the right to convert into equity at the lower of the prior days closing bid price or a 20% discount to the 10 day VWAP in minimum tranches of £20,000. For every three conversion shares issued under a conversion notice the lender will receive one 18 month warrant with exercise price at a 100% premium to the conversion price.
Dave Whitby, CEO of Andalas, said, “Inclusion of our first project in Indonesia’s national energy plan would be a key value trigger event for Andalas, particularly in the eyes of industry participants and/or potential finance partners who understand the substantial underlying value in our project. Ahead of this, today’s Loan Note strengthens our working capital position, without the issue of equity, during an important period for the Company. In the short term, we expect the first project approval to add considerable value to Andalas and the loan note provides an excellent means to fund the company’s further development to this point. This is an exciting time for Andalas as we look to prove our business model, and in the process become a leading Indonesian focused energy company.”
Appointment of Joint Broker
The securing of the non-dilutive Loan Note for the Company was facilitated by Beaufort Securities Limited, which has been appointed joint broker to the Company. In conjunction with their appointment Beaufort has been granted three tranches of warrants at various premiums to the current share price. Details of the warrants, which expire after a period of five years, are provided below:
- 10,000,000 at 0.20 pence per share;
- 8,000,000 at 0.25 pence;
- 6,666,666 at 0.30 pence
For further information, please contact:
|David Whitby||Andalas Energy and Power Plc||Tel: +62 21 2783 2316|
|Cantor Fitzgerald Europe
(Nominated Adviser and Joint Broker)
|Tel: +44 20 7894 7000|
|Jon Belliss||Beaufort Securities Limited
|Tel: +44 20 7382 8415|
It always comes as a surprise when the market reacts violently to some news item whose impact was considered already to be priced-in. Yesterday’s announcement told shareholders nothing new. Back in November, AVO detailed the fact that Sinophi was no longer to proceed with the installation of LIGHT technology in the China-Japan Union Hospital of Jilin University in Changchun and First People’s Hospital of Huai’An. Back then, AVO also confirmed that the orders for the two machines remained in place as per its agreement with Sinophi and that they were assessing other sites in the same cities as well as pursuing other framework agreements in China.
Realistically, however, given the bespoke nature of the two original contracts, it was clear that no ‘replacement buyers’ would be found and formal termination was only ever going to be a matter of time. AVO’s management always insisted, however, that the contractual details simply do not permit the originator to ‘walk away’ and that there never was any binding legal agreement with respect to delivery schedules. More to the point, the contracts were composed under English law and both companies have registered offices in the UK. Nevertheless, it would never be in either of the company’s interests to see their argument fought out in the courts, particularly for Sinophi which undertakes very large operations in China where partners would be highly sensitive to any suggestion that it had not looked after its client interests correctly. As such, assuming AVO’s legal counsel has correctly advised it, the dispute will more likely be argued behind closed doors and result in reparations being made to partially compensate AVO for its loss of profit opportunity amounting to, perhaps, a few million US$. Given the pressures on AVO’s balance sheet, any such payment would be welcome although, of course, it would still represent an unfortunate outcome from what initially had appeared to be a quite remarkable business opportunity. In this same respect, Monday’s announcement regarding the possibility of the Group securing non-dilutive financing from a ‘strategic partner’ (which Beaufort believes to be the French giant, Thales Group), also provides some hope for those fearful that AVO will otherwise be forced to undertake further discounted equity placements.
Tertiary is a fluorspar mine development company with large scale projects in Europe and the U.S. Its two main assets, the MB Project in Nevada and Storuman in Sweden, both have potential to be average to low cost operations with targeted production costs of between $150 and $200/t of acid grade fluorspar. Tertiary’s strategy is to advance both projects during this current down-cycle,so they are construction ready when mine finance conditions improve. Management expects this to also coincide with a shortage of new fluorspar mines and potentially higher fluorspar prices. We have updated our valuation to reflect the current depressed fluorspar price, offset by progress made at MB and Storuman. We calculate a 9.0p target price, 4.5x the current share price.
Fluorspar is probably the most essential raw material that no one’s heard of. It’s one of 20 raw materials on the European Commission’s critical list, while in the U.S. fluorspar is classified as a Strategic Material. Both regions are in need of a long term, local and reliable source of supply and Tertiary’s two main projects suit this requirement.
MB Project – Nevada
Despite lagging Tertiary’s Storuman project in the mine development process, in our opinion MB is of similar importance and potentially higher value. It is very large scale and located in a stable and mining friendly jurisdiction. Also very important is the U.S’s reliance on imported fluorspar, mainly from Mexico, which makes MB a strategic asset.
Storuman – Exploitation Concession granted
On February 18 2016 Tertiary Minerals was granted a 25 year Mining Concession for Storuman. Although the permitting process is not finished (the next stage is the Environmental Permit) this is a major step forward which adds value to the project and reflects strong support from the Swedish Mining Inspectorate.
Fluorspar prices – positive outlook
Both acid and metallurgical fluorspar prices are at 5 year lows. Although downside risks remain (perhaps from weaker China macro), over the medium to long term the outlook is positive, driven by global demand growth of fluorine containing products. Valuation and recommendation Our Tertiary valuation is based on a sum-of-the-parts approach with values for MB and Storuman, based on conceptual mine models and discounted to reflect funding dilution and other execution risks. We calculate a $26.5m valuation which equates to £19.6m or 9.0p per share, and a BUY recommendation.
Target price – 9p
Full Beaufort Securities research note here Tertiary-Minerals–9-_S