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Cadence Minerals #KDNC – Vox Markets Elevator Pitch

Cadence Minerals #KDNC CEO, Kiran Morzaria discusses the Company’s investments including:

  • Amapa Iron Ore Project
  • Macarthur Minerals Lake Giles Iron Project
  • European Metals Holdings #EMH and Cinovec Lithium project
  • Joint Ventures:
    • Yangibana Rare Earths project
    • Sonora Lithium project
    • Hard Rock Lithium assets

 

Cadence Minerals #KDNC – Interim Results

Cadence Minerals plc (AIM/NEX: KDNC), is pleased to announce its interim results for the six months ended 30 June 2020.

The effects of the COVID-19 pandemic have been deep and fundamental. The pandemic has driven huge changes in the way we work and live the long-term effects of which are hard to predict with any great degree of accuracy. The reaction by governments around the world has for the large part involved economic stimuli with central banks cutting interests and the launch of huge quantitative easing schemes.  

It is the latter, and in particular, the stimulus packages in China that have been beneficial to our investment portfolio. . China’s impact in relation to the rapid increase in iron ore prices has been clear. It is still the world’s biggest buyer of industrial commodities, and the vast majority seaborne trade in iron ore goes there. Indeed, in the first week of June, China’s steel blast furnaces were operating at 92% of capacity, which is above the 80-85% rates considered normal. Currently, indicators of construction activity look strong and a pipeline of orders had already been building before the pandemic struck. In its aftermath, construction has been given an extra push by the Chinese Government’s stimulus package.[1]

With this macroeconomic background, the directors believe that  the Company’s investments have performed well. A detailed review of which was recently published in the annual report released in June 2020 and in further announcements subsequent to this date. We have provided some of the highlights from our investments over the period below.

The Company also raised £1.25 million of new funds (before expenses) from new and existing investors as announced on 21st August. These funds were raised for general working capital and to provide flexibility to the Company to repay loan notes from cash reserves rather than from its holdings in quoted investments. 

HIGHLIGHTS

Amapa, Iron Ore Mine (“Amapa”) 

· Amapa was owned by Anglo American plc and Cliffs Natural Resources and consists of a large-scale iron ore mine, beneficiation plant, railway, and private port.  In 2012 the operation produced 6.1 Mt of iron ore concentrate and reported operating profits from their 70% ownership in the Amapá Project of US$120 million (100% – US$171 million). Before its sale in 2012, Anglo American valued its 70% stake at US$462m in its 2012 Annual Report (100% – US$600m).

· The remaining major precondition for Cadence to make its initial investment into Amapa requires DEV Mineraço S.A’s (“DEV”) to reach a settlement agreement with the secured bank creditors (“Bank Creditors”). On completion of the conditions and the release of the Cadence escrow monies, Cadence will become a 20% shareholder in Amapa via our joint venture company which will own 99.9% of DEV.

· DEV, Cadence and Indo Sino Pty Ltd (“the Investors”) have continued a constructive dialogue with the secured the Bank Creditors, and the parties are currently negotiating the settlement terms as proposed by the Bank Creditors.

· Iron Ore Stockpile Shipment – as announced on the 21 August – Companhia Docas de Santana (“CDSA”), a public (municipal) company and the port operator requested some additional non-statutory contractual requirements and undertakings. DEV has provided the requested documentation and continues to liaise with the State of Amapa and SEMA (Secretaria de Estado de Meio Ambiente). Cadence understands that SEMA will provide the required documentation imminently. Cadence will provide an update once the first shipment is underway.

European Metals Holdings Limited (“EMH”)

 · In late April 2020, EMH advised that shareholders had approved the investment of EUR 29.1 million by CEZ a.s. (“CEZ”) for a 51% equity interest in Geomet, EMH’s Czech subsidiary and holder of the Cinovec licenses at the Extraordinary General Meeting held on 23 April 2020. The investment of EUR 29.1 million will see the Cinovec project fully funded to the decision to construct.

· In June 2020, EMH   European Metals advised that the Czech Ministry of the Environment had granted Geomet an updated Preliminary Mining Permit related to the Eastern part of the Cinovec deposit. The permit was issued for a period of 8 years. A Preliminary Mining Permit is a necessary legal pre-qualification before obtaining a Final Mining Permit and guarantees EMH the priority right to apply for and obtain a Final Mining Area and a Final Mining Permit.

Macarthur Minerals (“Macarthur”)

· Announced Moonshine Magnetite Mineral Resource upgrade 

· RCR Mining Technologies appointed to examine rail unloading infrastructure solution at Esperance Port

· Proposal for development of a Commercial Track Access Agreement received from Arc Infrastructure

· lodgement of applications for land access to develop a 93km haul road from its Lake Giles Iron Project to a proposed rail siding adjacent to the Perth to Kalgoorlie rail line 

· Finalisation of land tenure agreement for the development of its proposed Magnetite processing plant at Lake Giles

Bacanora Lithium Plc (“Bacanora”)

· Cadence owns a 30% stake in the Mexalit S.A. de CV (“Mexalit”) joint venture which forms part of the Sonora Lithium Project in Northern Mexico. 

· In late May 2020, Bacanora provided an update which included. The Sonora government continues to maintain measures to prevent the spread of Covid-19 which meant Bacanora’s Hermosillo pilot plant was placed in care and maintenance in late March 2020 after shipping samples to its engineering partners in order to maintain the Front End Engineering Design schedule. The pilot plant will remain closed until conditions are considered safe, and the Government lifts its restrictions. 

· As a result of the return to work in China in late April 2020, the Ganfeng lithium test plant and project team resumed work on the Sonora flowsheet optimisation and process engineering. After the completion of the flow sheet engineering Ganfeng will provide Bacanora with an Engineering, Procurement and Construction style engineering proposal to produce downstream battery-grade lithium products from the Sonora Lithium Project. 

Yangibana Rare Earth Project

· Cadence owns 30% of 3 Mining Leases, 6 Exploration Licences which form part of the Yangibana Rare Earth Deposit. Hastings Technology Metals owns the remaining 70%. 

· Hasting’s signed long term binding Master Agreement with German Automotive Tier 1 supplier, Schaeffler technologies AG. Hasting’s obligation is to supply a substantial volume of MREC over an initial period of 10 years 

· Total Yangibana Project CAPEX revised to A$449m from A$517mresulting in 13% or A$68M reduction in CAPEX based on Hydrometallurgical Plant relocation to the Pilbara 

FINANCIAL RESULTS:

During the period the Group made a loss before taxation of £1.26 million (6 months ended 30 June 2019: £0.29 million year ended 31 December 2019: £2.27 million). There was a weighted basic loss per share of 1.336p (30 June 2019: 0.331p, 31 December 2018: 2.544p).  As a result of unrealised foreign exchange differences, comprehensive loss for the period was £1.42 million (30 June 2019: £0.24 million, 31 December 2019: £2.04 million).

The total assets of the group decreased from £18.77 million at 31 December 2019 to £17.89 million. Of this amount £0.37 million represent the market value of our investments at the period end. Borrowings were reduced from £2.98m at 31 December 2019 to £2.08m at 30 June 2020.

During the period our net cash outflow from operating activities was £0.67 million, and our net cash position was up £0.12 million at £2.38 million.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

For further information:

Cadence Minerals plc+44 (0) 7879 584153
Andrew Suckling 
Kiran Morzaria 
  
WH Ireland Limited (NOMAD & Joint Broker)+44 (0) 207 220 1666
James Joyce 
James Sinclair-Ford 
  
Novum Securities Limited (Joint Broker)+44 (0) 207 399 9400
Jon Belliss

Link here for the group financial statements

Cadence Minerals #KDNC – Interim Results for the six months ended 30 June 2019

Cadence Minerals plc announces interim Results for the six months ended 30 June 2019

 

 

HIGHLIGHTS

·    Cadence entered into an investment agreement to acquire up to 27% of the Amapá iron ore mine, beneficiation plant, railway and private port.

·      Before its sale in 2012 Anglo American valued  (impaired) its 70% stake in the Amapá iron ore mine at  US $462m ( 100% US $600m).

·      During its operation, the mine generated an annual operating profit of up to U$171 million (100%).

·      The total historic mineral resource contains an estimated 348 million tonnes (“Mt”) of ore @ 38.9% iron content (“Fe”).

·    Macarthur Minerals (Cadence equity ownership approx. 9%) refocused efforts on their iron ore assets and secured a binding Life-Of-Mine Off-Take Agreement with Glencore International A.G

·    European Metals (Cadence equity ownership approx. 19%) published a pre-feasibility study for the production of lithium hydroxide, increasing the net present value of the project 105% to US$1.1 BN.

INVESTMENT REVIEW

Amapá, Iron Ore Mine (“Amapá”)

In June this year Cadence Minerals entered into a binding investment agreement (“the  Agreement”) with Indo Sino Pte. Ltd. (“Indo Sino”) to invest in and acquire up to a 27% interest in the former Anglo American plc (“Anglo American”) and Cliffs Natural Resources (“Cliffs”) Amapá iron ore mine, beneficiation plant, railway and private port (“Amapá Project”) owned by DEV Mineração S.A. (“Amapá”).

The Amapá Project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities and commenced operations in December 2007. Production increased to 4.8 Mt and 6.1 Mt of iron ore concentrate product in 2011 and 2012 respectively.

A summary of the asset is as below:

·      Before its sale in 2012 Anglo American valued its 70% stake in the Amapá Project at US$866 million (100% 1.2 billion) and after impairment valued it at  US $462m in its 2012 Annual Report ( 100% US $600m)

·      During its operation, the mine generated an annual operating profit of up to U$171 million (100%)

·      The total historic mineral resource contains an estimated 348 million tonnes (“Mt”) of ore @ 38.9% iron content (“Fe”)

·      The ore is beneficiated to 65% Fe Pellet Feed and 62% Fe Spiral Concentrate

·      Based on available historic mine plans and an independent consultant review it is expected that at full production the Amapá Project has a mine life of 14 years and at full capacity is targeting to produce up to 5.3 Mt of Iron Ore per annum

·      Subject key preconditions being met, the planned shipment of a 1.39 million tonne stockpile is scheduled to commence in December 2019. It is estimated that these stockpiles have a net realisable value of approximately US$ 60 million, which will be reinvested in the restart of the Amapá Project

·      Potential for the mine and existing infrastructure to be brought to market swiftly with mining and processing anticipated to restart in 2021 subject to the grant of the necessary permits, regulatory consents and project financing.

To acquire its 27% interest, Cadence will invest US$ 6 million over two stages. The first stage is for 20% of the JV Co the consideration for which is US$2.5 million. The second stage of investment is for a further 7% of JV Co for a consideration of US$3.5 million. Should Indo Sino seek additional investors or an investment in the JV Co the agreement also provides Cadence with a first right of refusal to increase its stake to 49% in the JV Co.

Our investment is conditional on several key preconditions the first is the approval of the judicial restructuring plan (“JRP”), which was completed at the end of August. Once the remaining pre-conditions relating to the reinstatement of a concession on the railway licenses and bank creditor arrangements have been met, the US$2.5 million investment placed in the judicial trust account will be released, and Cadence will own 20% of the Amapá iron ore project. This will enable the start of the shipping of the iron stockpile.

The approval of the JRP and the fulfilment of the preconditions outlined above will result in Cadence’s and IndoSino’s joint venture company Pedra Branca Alliance Pte Ltd. (“PBA”) owning 99.9% of DEV Mineração S.A. (“Amapá”). DEV Mineração S.A. is the owner of the Amapá iron project.

Cadence’s next stage of investment will be a further investment of US$3.5 million on the grant of all operational and environmental licenses for the Amapá Project, at which point Cadence will own 27%.

As part of the JRP Amapá submitted an outline of an operational and financial plan that Amapá intends to implement to bring the project back into production, which included the following

·      The total initial estimate of capital investment of approximately US$168 million, of which it is estimated US$61 million will be spent on port rehabilitation and US$47 million to be spent on plant recommissioning.

·      Rehabilitation to be completed by the end of 2021 with new production in 2022. Full production by 2024 of 5.3 million tonnes (“Mt”) of iron ore per annum.

·      At full production and using US$61 per tonne of 62% Fe Amapá is forecast to have:

·      an average net revenue after shipping of US$266 million per annum,

·      and an average EBITDA of US$136 million per annum.

European Metals Holdings Limited (“EMH”)

Cadence has been investing in European Metals since June 2015. As of the date of this document, Cadence holds approximately 19% in the Cinovec deposit in the Czech Republic through a direct holding in the share capital of European Metals that owns 100 per cent of the exploration rights to the Cinovec lithium/tin deposit. The Cinovec lithium and tin deposit is located in the Krusne Hory mountain range. The deposit that straddles the border between Germany and the Czech Republic and in Germany, it is known as the Zinnwald deposit (50% owned by Bacanora Lithium Plc ). The district has an extensive mining history, with various metals having been extracted since the 14th Century.

During the period EMH made significant progress. Drilling continued at the site with five of the eight-hole programme completed; this drilling programme was carried out to define the first two years of mining within the Cinovec-south area. The results of this programme have either been in line with or exceeded, EMH’s expectations particularly with regard to the tin intercepts.

In addition to the drilling results, EMH published a pre-feasibility study on producing battery-grade lithium hydroxide for as an alternative to battery-grade lithium carbonate. The result significantly enhanced the forecast economics of the Cinovec Project:

Highlights of the study are: (all $ figures in this release are US Dollars and increases refer to the 2017 PFS Lithium Carbonate study):

·           Net estimated overall cost of production post-credits: $3,435 / tonne LiOH.H2O

·           Project Net Present Value (“NPV”) increases 105% to: $1.108B (post-tax, 8%)

·           Internal Rate of Return (“IRR”) was increased 37% to 28.8% (post-tax)

·           Total Capital Cost: $482.6M

·           Annual production of Battery Grade Lithium Hydroxide: 25,267 tonnes

·           Studies are based on only 9.3% of reported Indicated Mineral Resource and a mine life of 21 years processing an average of 1.68 Mtpa ore

·           The process used to produce lithium hydroxide allows for the staging of lithium carbonate and then lithium hydroxide production to minimise capital and startup risk and enables the production of either battery-grade lithium hydroxide or carbonate as markets demand

After the period end, EMH entered into an agreement with CEZ Group(“CEZ”), one of Central and Eastern Europe’s largest power utilities, to conditionally provide a EUR 2 million finance facility by way of a convertible loan. CEZ is currently conducting due diligence on the Company and Project. The successful outcome of the due diligence process could see CEZ become European Metals’ largest shareholder and co-development partner for the Cinovec Lithium/Tin Project through conversion of the convertible note and subsequent additional investment.

Macarthur Minerals (“Macarthur”)

Cadence holds approximately 9% of the equity in Macarthur. Macarthur has three iron ore projects in the Yilgarn region of Western Australia. The Company has also established multiple project areas in the Pilbara, Western Australia for conglomerate gold, hard rock greenstone gold and hard rock lithium. In addition, Macarthur Minerals has significant lithium brine interests in the Railroad Valley, Nevada, USA.

During the period Macarthur focused its efforts on its Iron Assets in Western Australia.

The main highlights for Macarthur over the period were:

·       Opened an up to US$6 million institutional convertible note offer to fund the production of a Bankable Feasibility Study on Macarthur iron ore projects

·       Binding Life-Of-Mine Off-Take Agreement with Glencore International A.G for the Lake Giles Iron Ore Project for approximately 4 mtpa for the first 10 years on project start up

·       Macarthur entered into exclusive negotiation agreement with Aurizon for rail haulage services for the Lake Giles Iron Ore Project

·       Infill drilling program planned for the Moonshine magnetite deposit

·       Engineering firm Engenium commissioned to revise NI 43-101 compliant technical report and refine operating and capital costs of the hematite and magnetite projects

·       Applications have been made for three additional prospective iron ore tenements. These were properties released by Cliffs Natural Resources and are adjacent to the iron ore operations of Mt Jackson and Deception Mines

Bacanora Lithium Plc (“Bacanora”)

At the period end Cadence owned less than one per cent of Bacanora’s equity and a 30% stake in the Mexalit S.A. de CV (“Mexalit”) joint venture which forms part of the Sonora Lithium Project in Northern Mexico.

Bacanora has two lithium development assets, the Sonora Lithium Project and the Zinnwald Lithium Project. Bacanora has a 50% interest in, and joint operational control, of the Zinnwald Lithium Project. Zinnwald represents a strategic asset located near a thriving market for lithium and energy products.

Bacanora’s principal asset is the Sonora Lithium Project in northern Mexico. The asset has Measured plus Indicated Mineral Resource estimate of over 5 million tonnes (‘Mt’) (comprising 1.9 Mt of Measured Resources and 3.1Mt of Indicated Resources) of lithium carbonate equivalent (‘LCE’) and an additional Inferred Mineral Resource of 3.7 Mt of LCE, Sonora is regarded as one of the world’s larger known clay lithium deposits.

Bacanora continued to progress the strategic investment by Ganfeng Lithium Co., Ltd. (“Ganfeng”) during the period and signed the investment agreement at the end of June 2019, the key terms of which were:

·           Cornerstone strategic investment of 29.99% in Bacanora for £14,400,091 by Ganfeng

·           Project level investment of 22.5% in Sonora Lithium Ltd , the holding company for the Sonora Lithium Project, for £7,563,649

·           Additional long-term offtake at a market-based price per tonne

·           Gangfeng will complete a review within six months of the EPC engineering design and capital costs of Sonora Lithium Project with a view to reducing costs and accelerating the timetable

·           Gangfeng will provide a plant and process commissioning team to assist Bacanora in delivering first production in 2021

At the time of publishing Ganfeng was awaiting final approval from Chinese authorities to make its investment.

Yangibana Rare Earth Project

Cadence owns a 30% free carried interest in the Yangibana North, Gossan, Hook, Kanes Gossan, Lions Ear and Bald Hill North rare earth projects in Western Australia. These projects form part of the larger Yangibana Rare Earth Project (“the Project”). The free carry is up to the commencement of the feasibility study.

A considerable amount of work over this period has been to define the geological resource and reserves, optimise the process flow, carry out detailed design and engineering work required for the setting up of a process plant, negotiations on equipment supply and no less crucial securing project finance. An early works permit was granted which allowed the initiation of infrastructure work and bring on-site a 340 rooms accommodation camp ready for occupation when mine construction commences.

On geology, there was a 34% increase in probable ore reserves to 10.35 million tonnes at 1.22% TREO including 0.43%Nd2O3+Pr6O11, supporting an initial 11 years operational life for the project based on the JORC certified resource of 21.7 million tonnes.

The current mine plan and production targets set out by the operator incorporates 10.35 million tonnes of Probable Ore Reserves, of which 1.96 million tonnes is part our joint venture asset, Yangibana North, which according to the operator’s production targets are scheduled to be mined from year 8 to year 14. These production targets include indicated mineral resources, hence the longer mine life.

Lithium Assets in Australia

In March this year Cadence announced that it has agreed to acquire three highly prospective assets in Australia that are in regions with proven high-grade lithium mineralisation. The mechanism to facilitate this acquisition was via varying binding investment agreements in place with Lithium Technologies Pty Ltd (“LT”) and Lithium Supplies Pty Ltd (“LS”) that Cadence entered on 11 December 2017 to acquire up to 100% of six prospective hard rock lithium assets in Argentina.

Highlights of the assets include:

·     The acquisition covers three projects – Picasso (Western Australia – WA), Litchfield (Northern Territories – NT) and Alcoota (NT) – that are located  in regions with proven lithium mineralisation and supportive mining infrastructure

·     The Picasso Project (license granted) is near Alliance Mineral Assets’ (ASX: A40; SGX: 40F; “AMA”) high-profile Bald Hill Mine in WA (note: AMA recently completed a 50:50 A$400m+ merger with delisted Tawawa Resources [ASX: TAW] & raised $40M to develop the  asset base)

·     Demonstrating exploration upside for Picasso, the Bald Hill Mine is producing a spodumene concentrate and has a JORC (2012) compliant mineral resource of 26.5Mt @ 0.96% Li2O; probable ore reserves at 11.3Mt @ 1.01% Li2O

Preliminary exploration work was concluded in April with positive results, and Cadence increased its stake from 4% to 24%. Early exploration work will begin soon to test and sample targets that have been identified during the preliminary exploration.

Other Investments

Cadence also retains equity positions in Sagon Resources Ltd (formerly Clancy Minerals Ltd) and Auroch Minerals Ltd. The latter being involved in base metal exploration in Australia, in particular, the Saints Nickel Project in Western Australia. Sagon Resources Ltd is currently exploring the Cummins Range Rare Earths Project.

FINANCIAL REVIEW

During the period, the Group made a loss before taxation of £0.28 million (30 June 2017: loss of £4.61 million). This was primarily due to an increase in the value on our portfolio, which offset administrative, financing and share of associated losses totalling £0.96 million.

There was a weighted basic loss per share of 0.003p (30 June 2017: loss per share 0.059p)  Foreign currency translation differences marginally decreased comprehensive loss for the period to £0.24 million (30 June 2017: total comprehensive loss of £4.66 million).

Administrative expenses decreased by £0.11 million compared to the same period last year; this decrease was driven by cost-cutting measures across the board.

The total assets of the group increased from £18.33 million at 31 December 2017 to £19.39 million. Of this amount, £2.33 million represent the market value of our available for sale investments at the period end. The reduction in the total assets is as a result of the decrease in the value of Bacanora equity, which was the primary driver for the reduction of available for sale asset value.

It is important to note that this does not include our investment in EMH. Our investment in EMH is classified as an investment in an associate and held at a value of £12.2 million. EMH is classified as such because we hold approximately 19% and Kiran Morzaria, the Chief Executive Officer of Cadence is also a Non-Executive Director of EMH.

Our borrowings of £3.71 million as at the 31 December 2017 reduced to £2.06 million by the end of the period as we paid back our convertible loans.

During the period, our net cash outflow from operating activities was £0.52 million compared to £0.45 million during the same period last year. We invested £0.27 million in Amapá, as part of our due diligence and JRP costs and our financing costs were some £0.19 million. We disposed of £1.42 of our available for sale investments which predominantly was our Bacanora equity. These sales were used to pay back some £1.59 million of our convertible loan during the period. We raised some £1.30 million of equity during the period which after netting of the aforementioned costs and revenue from the sale of our equity stake yielded resulted in a cash balance at the end of the period of £0.54 million

 

For further information, please contact

Cadence Minerals plc

+44 (0) 207 440 0647

Andrew Suckling

Kiran Morzaria

WH Ireland Limited (NOMAD & Broker)

+44 (0) 207 220 1666

James Joyce

James Sinclair-Ford

Novum Securities Limited (Joint Broker)

+44 (0) 207 399 9400

Jon Belliss

 

 

CADENCE MINERALS PLC

STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIOD ENDED 30 JUNE 2019

 

Notes

Unaudited Period ended 30 June 2019

Unaudited Period ended 30 June 2018

Audited Year ended  31 December 2018

£’000

£’000

£’000

Income

Unrealised profit/(loss) on assets held for sale

1,118

(3,730)

(7,440)

Realised (loss)/profit on assets held for sale

(264)

105

(1,967)

Other income

4

48

140

858

(3,577)

(9,267)

Share based payments

(3)

(7)

Other administrative expenses

(672)

(785)

(1,559)

Total administrative expenses

(672)

(788)

(1,566)

Operating profit/(loss)

186

(4,365)

(10,833)

Share of associates losses

(274)

(182)

(555)

Finance cost

(197)

(59)

(377)

(Loss)/profit before taxation

(285)

(4,606)

(11,765)

 

 

 

Taxation

(Loss)/profit attributable to the equity holders of the Company

(285)

(4,606)

(11,765)

Other comprehensive income/(expenditure)

Foreign currency translation differences

47

(53)

(150)

Other comprehensive income/(expenditure) for the period net of tax

47

(53)

(150)

Total comprehensive expenditure for the period

(238)

(4,659)

(11,915)

Loss per share

Basic  (pence per share)

3

(0.003)

(0.059)

(0.150)

Diluted  (pence per share)

3

(0.003)

(0.051)

(0.145)

CADENCE MINERALS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 JUNE 2019

 

Share capital

Share premium account

Share-based payment reserve

Hedging, Loan & Exchange reserves

Retained earnings

Total equity

£’000

£’000

£’000

£’000

£’000

£’000

Balance at 1 January 2018

1,202

27,552

3,178

337

(5,545)

26,724

Share based payments

3

3

Transfer on lapse of warrants

(132)

132

Transactions with owners

              –  

                –  

(129)

                –  

132

3

Foreign exchange

 –

 –

(53)

 –

(53)

Profit for the period

(4,606)

(4,606)

Total comprehensive loss for the period

              –  

                –  

              –  

(53)

(4,606)

(4,659)

Balance at 30 June 2018 (unaudited)

1,202

27,552

3,049

284

(10,019)

22,068

Share based payments

4

4

Transfer on lapse of warrants

(1,661)

1,661

On settlement of loan notes

(412)

(412)

Transactions with owners

              –  

                –  

(1,657)

(412)

       1,661

(408)

Foreign exchange

(97)

(97)

Loss for the period

(7,159)

(7,159)

Total comprehensive loss for the period

              –  

                –  

              –  

(97)

(7,159)

(7,256)

Balance at 31 December 2018

1,202

27,552

1,392

(225)

(15,517)

14,404

Issue of share capital

232

2,668

2,900

Costs of share issue

(105)

(105)

Transactions with owners

          232

         2,563

                –  

              –  

       2,795

Foreign exchange

 –

 –

47

 –

47

Loss for the period

(285)

(285)

Total comprehensive loss for the period

              –  

                –  

              –  

47

(285)

(238)

Balance at 30 June 2019 (unaudited)

1,434

30,115

1,392

(178)

(15,802)

16,961

 

 

 

 

 

 

 

 

 

 

 

CADENCE MINERALS PLC

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2019

 

Unaudited

Unaudited

Audited

 30 June 2019

 30 June 2018

 31 December 2018

Assets

Notes

£’000

£’000

£’000

Non-current

Intangible assets

2,438

1,875

2,172

Investment in associate

12,170

12,918

12,483

14,608

14,793

14,655

Current assets

Trade and other receivables

1,919

461

315

Assets held for sale

2,330

9,946

2,895

Cash and cash equivalents

536

216

468

Total current assets

4,785

10,623

3,678

Total assets

19,393

25,416

18,333

EQUITY AND LIABILITIES

Current liabilities

Trade and other payables

372

290

223

Borrowings

2,060

3,058

3,706

Total current liabilities and total liabilities

2,432

3,348

3,929

Equity

Share capital

4

1,434

1,202

1,202

Share premium

30,115

27,552

27,552

Share based payment reserve

1,392

3,049

1,392

Hedging & Exchange reserve

(178)

284

(225)

Retained earnings

(15,802)

(10,019)

(15,517)

Total equity and liabilities

to owners of the company

16,961

22,068

14,404

Total equity and liabilities

19,393

25,416

18,333

CADENCE MINERALS PLC

CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD 30 JUNE 2019

 

Unaudited Period ended

Unaudited Period ended

Audited Year ended

30 June 2019

30 June 2018

 31 December 2018

£’000

£’000

£’000

Cash flows from operating activities

Operating profit/(loss)

186

(4,365)

(10,833)

Net realised/unrealised profit on assets held for sale

(854)

3,625

9,407

Equity settled share-based payments

3

7

Decrease/(increase) in trade and other receivables

(4)

261

407

Increase/(decrease) in trade and other payables

149

28

(39)

Net cash outflow from operating activities

(523)

(448)

(1,051)

Taxation

Cash flows from investing activities

Payments for investments in assets held for sale

(476)

(523)

Receipts on sale of assets held for sale

1,419

438

1,755

Receipts from sale of/(payments for) investments in associates

39

(50)

Investment in exploration costs

(266)

(100)

(325)

Net cash outflow from investing activities

1,192

(138)

857

Cash flows from financing activities

Proceeds from issue of share capital

1,300

Share issue costs

(105)

Net (loan repayments)/borrowings

(1,599)

(1,176)

(998)

Finance cost

(197)

(59)

(377)

Net cash inflow from financing activities

(601)

(1,235)

(1,375)

Net increase/(decrease) in cash and cash equivalents

68

(1,821)

(1,569)

Cash and cash equivalents at beginning of period

468

2,037

2,037

Cash and cash equivalents at end of period

536

216

468

 

NOTES TO THE INTERIM REPORT

FOR THE PERIOD ENDED 30 JUNE 2019

 

1 BASIS OF PREPARATION

 

The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention.  The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2018 have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified.

 

The principal accounting policies of the Group are consistent with those detailed in the 31 December 2018 financial statements, which are prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the European Union.  IFRS16 – Leases has been adopted, but as the Group has no leases exceeding 12 months, this has had no impact.

 

GOING CONCERN

 

The Directors have prepared cash flow forecasts for the period ending 30 September 2019. The forecasts demonstrate that the Group has sufficient funds to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the accounts have been prepared on a going concern basis.

 

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

 

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

 

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results

 

2 SEGMENTAL REPORTING

 

An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available.

 

The chief operating decision maker reviews financial information for and makes decisions about the Group’s performance as a whole. The Group has not actively traded during the period.

 

Subject to further acquisitions the Group expects to further review its segmental information during the forthcoming financial year.

 

3 PROFIT PER SHARE 

 

The calculation of the loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

 

Unaudited

Unaudited

Audited

six months ended

six months ended

year ended

30 June 2019

30 June 2018

31 December 2018

£’000

£’000

£’000

(Loss)/profit on ordinary activities after tax (£’000)

(285)

(4,606)

(11,765)

Weighted average number of shares for calculating basic loss/profit per share

  8,335,217,332

  7,851,440,338

  7,851,440,338

Share options and warrants exercisable

     280,000,000

  1,259,575,345

     280,000,000

Weighted average number of shares for calculating diluted loss/profit per share

  8,615,217,332

  9,111,015,683

  8,131,440,338

Basic loss per share (pence)

(0.003)

(0.059)

(0.150)

Diluted loss per share (pence)

(0.003)

(0.051)

(0.145)

 

4 SHARE CAPITAL

 

Unaudited

Unaudited

Unaudited

30 June 2019

30 June 2018

30 June 2018

£’000

£’000

£’000

Allotted, issued and fully paid

173,619,050 deferred shares of 0.24p (30 June 2018 and 31 December 2018: 173,619,050)

417

417

417

10,172,652,446 ordinary shares of 0.01p (30 June 2018 and 31 December 2018: 7,851,440,338)

                  1,017

                      785

                      785

                  1,434

                  1,202

                  1,202

 

AIM minnow Cadence punches well above its weight in Brazil

Since evolving from Rare Earth Minerals in early 2017, AIM listed Cadence Minerals (KDNC) has offered investors a proposition largely based on investments into selected lithium and base metal projects around the globe.

Taking cornerstone stakes in projects such as the Cinovec Lithium and Tin Project in the Czech republic and the Sonora Lithium Project in Mexico has seen the company portfolio exhibit excellent returns. However, the sell-off in Lithium stocks over the last two years has seen the Cadence share price drift in line with the underperformance of public investments in the sector.

December 2017 saw a strategic shift to invest and acquire assets directly, with the acquisition of hard rock lithium assets in Argentina. Following subsequent investments into three lithium projects in Australia, the iron ore supply squeeze in late 2018 threw up an opportunity in Brazil that did not go unnoticed by eagle eyed Cadence management.

Formerly owned by Anglo American (AAL) and Cliffs Natural Resources, the Amapá iron ore project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities. Based in Northern Brazil close to the Atlantic, Amapá commenced operations in December 2007, and prior to its sale in 2012 due to a collapse in iron ore prices, Anglo American valued its 70% stake at $462m. Back then the mine was selling ore globally to Europe, USA and China.

With some $60m of iron ore stockpile sitting ready for shipment at the port, Cadence CEO Kiran Morzaria set up a joint venture company Pedra Branca Alliance Pte Ltd (PBA) with Singapore based commodities group IndoSino Pte Ltd to acquire the Amapá holding company.

A judicial restructuring plan submitted by PBA has just been approved, which astonishingly will see Cadence acquire, through PBA, a 27% stake in the Amapá iron ore project for just $6m.

“Opportunities such as this come along once or twice in a lifetime,” says Morzaria.

“To start a project on the scale of Amapá would require little short of $1bn capex. We (Cadence) will own 27% of a project, which when recommissioned should generate over $136m EBITDA per annum for at least 14 years, plus we will have the right and first refusal to acquire up to 49%.”

PBA expects to start shipping the stockpile by the end of this year, which will see a net $60m into the coffers to part complete the $168m investment required to recommission the mine, railway and port.

Rehabilitation of the mine, railway and port is expected to be completed by 2021, with first new production in 2022. A production ramp up will see 5.3 million tonnes of iron ore produced per annum by 2024.

KDNC CEO Kiran Mozaria explores Amapa’s sorting area

More significantly, mine net revenues after shipping is forecast to be approximately $265m per annum, with EBITDA of approx $136m per annum based on a conservative iron ore price of $61 per tonne. Currently iron ore prices are closer to $90 per tonne.

Of course there is another benefit in rehabilitating the Amapá mine. The local economy will be rejuvenated, creating hundreds of jobs and employment opportunities, along with new funding for local schools and hospitals.

“Previously Amapá’s output amounted to a sizeable chunk of the local economy,” adds Morzaria.

“Bringing the mine back to life will provide a huge boost to the region.” For AIM minnow Cadence, which currently trades on an asset backed market cap of just £9m, the opportunity and the numbers are hugely impressive and potentially transformational. Punching indeed!

Notes:
For full details on this story, the formal RNS announcement is here:

https://www.investegate.co.uk/cadence-minerals-plc–kdnc-/rns/approval-of-judicial-restructuring-plan—amapa/201908300700056390K/

Cadence Minerals website: https://www.cadenceminerals.com/

Cadence Minerals plc
+44 (0) 207 440 0647
Andrew Suckling / Chairman
Kiran Morzaria / CEO

Brand Communications
+44 (0) 7976 431608
Alan Green

Cadence Minerals #KDNC – Macarthur Minerals (TSX-V: MMS) Announces Glencore #GLEN Participation in Financing.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today from Macarthur Minerals (TSX-V: MMS) (“Macarthur”), that further to the announcement of March 19, 2019, a subsidiary of Glencore plc (“Glencore”) has agreed to participate in the US$6 million secured Convertible Note (“Note”) on a private placement basis for US$2 million.

Glencore’s participation in this financing, strengthens the life-of-mine long-term strategic relationship between the parties in line with the previously announced binding Off-Take Agreement (“Agreement”) with Glencore for sale of iron ore to be produced from the Lake Giles Iron Project (“Project”) in the Yilgarn Region of Western Australia.

Cadence holds approximately 10% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

Key terms to the note:

  • Each Note has a face value of US$10,000 following adoption of a loan note instrument.
  • The Notes (including accrued but unpaid interest) can be converted at any time after 12 months into common shares of Macarthur at the Noteholder’s option at a conversion price that reflects the greater of 80% of the average VWAP over 5 trading days immediately preceding the date of a notice of conversion and C$0.10 (in each case with appropriate equivalence to USD), with attaching warrants offered for one fourth of the commitment amount exercisable at the greater of C$0.10 or the average VWAP over 5 trading days immediately preceding the date of the Advance Date (such term being defined in the definitive documentation) (in each case with appropriate equivalence to USD).
  • The Notes will have a term to maturity of 3 years and bear interest at a rate of 12.5% per annum.
  • The Notes include a restriction on conversion that provides that such conversion may not have the effect of causing Noteholder to own 20% or more of the common shares of Macarthur or becoming a control person.
  • The iron ore mining licences held by Macarthur (or a subsidiary of Macarthur) in respect of the Lake Giles Iron project region of Western Australia will act as security for the Notes issued to the Noteholder.

Any shares issued upon conversion of the principal amount of the Note and any accrued interest will be subject to certain resale restrictions, including a restricted (or “hold”) period of four months and one day following the distribution date of the Note and warrant, under applicable Canadian securities legislation.

The consummation of the US$2 million financing commitment from Glencore is subject to receipt of all necessary regulatory approvals including that of the TSX Venture Exchange, the Australian Foreign Investment Review Board and satisfaction of the other conditions set out in the Investment Agreement entered into by the Glencore and Macarthur.

The full release can be found at: https://web.tmxmoney.com/article.php?newsid=8292361460422531&qm_symbol=MMS

Cadence Minerals Chairman Andrew Suckling commented: “To secure a US$2 million investment from Glencore following the recently announced take-off agreement marks another significant milestone for Macarthur and its shareholders. As with the Exception Capital financing agreement announced yesterday, the terms are attractive, and provide Macarthur with funding certainty while potentially minimising dilution to Cadence shareholders.”

This news release is not for distribution to United States Services or for Dissemination in the United States.

– Ends –

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals (KDNC) – Macarthur Minerals (TSX-V: MMS) Progress Towards Rail Haulage Agreement.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today from Macarthur Minerals (TSX-V: MMS) (“Macarthur”) that it has partnered with Australian freight haulage company Aurizon (“Aurizon”) to finalise a rail haulage contract for its Lake Giles Moonshine Magnetite Project (“Project”) in the Yilgarn region of Western Australia. This news follows the Company’s recent announcement that it has signed a binding Life-of-Mine Off-Take Agreement with Glencore International A.G. for the sale of iron ore to be produced from the Project from the commencement of commercial production.

Macarthur has entered into a Negotiation Agreement with Aurizon to provide above rail haulage services including the supply of rolling stock for the purpose of transporting iron ore from the Project to the Port of Esperance. Aurizon already has rolling stock available that was previously used by other iron ore operators in the region including 325 wagons. The rolling stock is fit for purpose and compatible with rail unloading infrastructure at the Port of Esperance. This represents a key component of the logistics solution for the Project.

Aurizon was selected as the preferred operator based on its superior supply chain experience, safety and operating capability and its expertise in bulk rail freight that includes the transport of over 40 million tonnes of bulk freight and iron ore throughout Australia.  Aurizon has significant rail marshalling, maintenance and traincrew facilities at the Port of Esperance, a legacy investment from its previous Cliffs iron ore haulage contract. The open access rail network owned by Arc Infrastructure has available capacity and is accessible within 90 km of the Project and runs directly to the Port of Esperance.

Cadence holds approximately 10% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

The full release can be found at: https://web.tmxmoney.com/article.php?newsid=5047835856823328&qm_symbol=MMS

Cadence Minerals Chairman Andrew Suckling commented: “The partnership with Aurizon to advance Macarthur’s rail haulage requirements represents an important step forward for the Lake Giles Moonshine Magnetite Project take off agreement recently announced between Macarthur and Glencore.”

“Equally significant will be the potential benefits of this agreement to the economies of the local mining communities surrounding the Moonshine Magnetite Project and those of the Port of Esperance community of Western Australia. As stated by Macarthur, these areas have recently suffered from a significant decline in iron ore export.”

This news release is not for distribution to United States Services or for Dissemination in the United States. 

– Ends –

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
Hannam & Partners LLP (Joint Broker)                                 +44 (0) 207 907 8500
Neil Passmore  
Giles Fitzpatrick  
   
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss  

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Cadence Minerals Plc – Macarthur Minerals (TSX-V: MMS) Signs 10 Year Iron Ore Off-Take Agreement for the Lake Giles Iron Project in Australia With Glencore International A.G.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today from Macarthur Minerals (TSX-V: MMS) (“Macarthur”) that it has entered into a binding Life-of-Mine Off-Take Agreement (“Agreement”) with Glencore International A.G. (“Glencore”) for sale of iron ore to be produced from the Lake Giles Iron Project (“Project”) at Lake Giles in the Yilgarn region of Western Australia from the commencement of commercial production.

Highlights:

  • Glencore secures life-of-mine of the project with commercial terms for approximately 4m tonnes per annum average for the first 10 years, with the option to extend for a following 10 years for all tonnes of future Lake Giles iron ore production.
  • Glencore agrees to release up to 70% of their off-take volume where Macarthur secures project financing from a Strategic Industry Investor, subject to their securing off-take of the product produced.
  • This Agreement with Glencore positions Macarthur to go forward to complete their project financing.
  • The Agreement is currently valued at approximately US$4bn in revenue over the first 10-year term ensuring Macarthur long term revenue and consistent sales per year.
  • Terms and conditions have been competitively negotiated reflecting strong forward demand.

 

High grade iron ore prices:

Metallurgical test work on the Lake Giles’s Moonshine Magnetite Project indicates that an export product of high margin +65% Fe can be achieved. ).  In its announcement, Macarthur states that the current market price for 65% Fe product is quoted at US$98/tonne (A$140 per tonne). Macarthur also states that the value of the initial 10-year Glencore off-take at current market price for Moonshine iron ore would be ~US$4bn.

Cadence holds approximately 10% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

The full release can be found at: https://web.tmxmoney.com/article.php?newsid=6303739202199099&qm_symbol=MMS

Cadence Minerals Chairman Andrew Suckling commented: “It is gratifying to see that the confidence of the Cadence management team in its investment strategy into Macarthur Minerals means that our company can now participate in a transformational take off agreement between Macarthur and Glencore, one of the largest mining conglomerates in the world.”

“We congratulate the Macarthur Minerals management team on achieving this key milestone.”

 

This news release is not for distribution to United States Services or for Dissemination in the United States. 

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
Hannam & Partners LLP (Joint Broker)                                 +44 (0) 207 907 8500
Neil Passmore  
Giles Fitzpatrick  
   
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss  

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Ian Pollard – Gooch & Housego #GHH Impacted by Microelectronic Headwinds

Gooch & Housego plc GHH updates that it is suffering from microelectronic headwinds despite which growth has continued. During the first four months of the financial year the business has seen a downturn in demand particularly from China. A cyclical downturn is also currently being experienced for industrial lasers.  2019 group trading performance is still expected to show low single digit growth compared to last year.

Glencore plc GLEN is pleased to report that it has delivered both record Adjusted EBITDA, up by 8% and significant cash returns to shareholders in 2018. The preliminary results also include net income attributable to equity holders down 41% and basic earnings per share also down 41%. Other highlights are that resolutions have been achieved with the Ontario Securities Commission regarding accounting, governance and disclosure matters and a refreshed management team has been appointed. Committees have been created to oversee the Group’s response to the U.S. Department of Justice’s investigation. Production guidance in all commodities for 2019 is that it is expected to be higher than 2018.

Intu Properties plc INTU  claims its management team has produced robust operational performance in a challenging market for the year to 31st December,  with increased like-for-like net rental income for the fourth consecutive year and 97 per cent occupancy. property valuations declined as sentiment weakened significantly. Valuations fell by a further 3 per cent  in the final quarter of 2018, in addition to the 9 per cent fall over the first nine months. Sentiment in the retail sector is at an all-time low.

Hochschild Mining plc HOC reports another strong year of record production and prudent cost control. Revenue for the year to 31st November fell by 3%, adjusted EBITDA by 11%, Profit from continuing operations (pre-exceptional) was down by 66% and Profit from continuing operations (post-exceptional) by 88%. 2018 operational delivery exceeded guidance.

Lloyds Banking Group LLOY 2018 results show that it was a year of strong strategic and financial delivery. The UK economy has proven itself resilient with record employment, which has enabled the bank to see profits jump by 24% whilst the total ordinary dividend of 3.21 pence per share, is up 5 per cent on 2017 In addition to this a share buyback of up to £1.75 billion is proposed. A continued strong performance is expected for 2019 with a statutory return on tangible equity of 14 to 15 per cent.

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Ian Pollard – Glencore #GLEN Strongest Performance on Record

Glencore GLEN claims that its 2017 performance was the strongest on record with industrial adjusted EBITDA rising by 60% and basic earnings per share by 310%, helped by rising commodity prices which are completely outside the control of the company and a strong unit cost performance for which it must be given credit. Net debt fell by a hefty 31%. As for the future it believes that its unrivalled positioning and commodity diversification can create superior long term value for all stakeholders – until the next commodity slump that is but in the meantime enjoy the ride.

First Group FGP updates that reported revenue for the year to date rose by 10.7% but in constant currency terms that was reduced to 1.1%. Greyhounds long haul business was affected by intense airline competition. Even the weather with heavy snowstorms on the eastern sea board as far down as Florida, proved to be a challenge.  Modest first half growth at Greyhound has turned into a decline of 0.4% for the year to date as the second half worsened with a 2.8% decline for the period from the end of September to January. At First Rail like for like passenger revenue rose by 3.2% both for the year to date and for the second half so far. TransPennine Express is described as producing industry leading growth which has got even stronger with the introduction of its new fleet in the autumn.

Bilby plc BILB Revenue and profitability for the year to the end of March will be ahead of current market expectations as the company continues to win new clients, new contracts and invitations from existing and long term customers to broaden the scope of work which it provides.Excellent customer service is regarded by the company as the clue to its success.

Gooch & Housego GHH is experiencing exceptional demand for critical components used in micro electric manufacturing, the order book as at the beginning of January stood at record levels with a rise of 48% compared to the same tie lasy year and put icing on the cake, overall market conditions are good.

Hotel Chocolat Group HOTC announces another period of strong sales growth for the half year to 31st December, with revenue, underlying EBITDA, profit before and after tax and earnings per share all rising by 15%. An interim dividend of 0.6p per share is to be paid following the maiden dividend of 1.6p at the year end in September. Mothers Day, Easter and Valentines Day results are all being looked forward to eagerly.

Inspirational Healthcare Group IHC has continued to perform strongly in the second half, as forecast the the half tear stage. Full year profit are expected to be in line.

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Buy Glencore #GLEN say VectorVest. The stock is trending strongly upwards and offers a compelling growth story.

Swiss based FTSE100 giant Glencore (GLEN.L), formerly Glencore Xstrata plc, is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 90 commodities. The Group’s operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities. With a strong footprint in both established and emerging regions for natural resources, Glencore’s industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries. Glencore’s customers are industrial consumers, such as those in the automotive, steel, power generation, oil and food processing sectors. The Company also provide financing, logistics and other services to producers and consumers of commodities. Glencore’s companies employ around 155,000 people, including contractors.

Examine this trading opportunity and a host of other similar stocks. A single payment of £5.95 gives access to the VectorVest Risk Free 30-day trial. More here

On December 12th 2017, GLEN published an investor update, and said that the outlook for its “Tier 1” commodities – copper, cobalt, nickel, zinc & thermal coal were underpinned by persistent supply challenges and robust demand. GLEN added that it was the best placed large cap resources company for the Electric Vehicle revolution. CEO Ivan Glasenberg said the Company expects 2018 illustrative EBITDA of c.$16.2bn at spot/forward prices, adding that GLEN “looks to the future, confident in our ability to continue to create superior returns for our shareholders.”

Along with the other large cap resource giants listed on the FTSE100, GLEN has seen a resurgence in value since summer 2017. The mid December dip in the stock flagged the opportunity and trend both across RV (Relative Value) and RT (Relative Timing) metrics. RV, an indicator of long-term price appreciation potential, logged at 1.55, which VectorVest considers excellent on a scale of 0.00 to 2.00. Added to this, the GRT (forecasted Earnings Growth Rate) for GLEN logs at 37.00%, which VectorVest considers to be excellent, and despite a fair RS (Relative Safety) rating of 0.93 (scale of 0.00 to 2.00), at 409p the stock trades a long way below the VectorVest valuation of 610p.

The chart of GLEN is shown above in my normal format. The blue line study in the window below the price shows Earnings per Share (EPS) growing strongly. The share is trending strongly upwards after breaking and subsequently testing a 52 week high.

Summary: To some investors, mining companies represent a greater degree of investing risk. However, in the view of VectorVest, the sheer size and diversity of the Glencore business results in a relatively safe and stable investment proposition, while a resource hungry world and the EV revolution provides a huge market opportunity and a compelling growth story to buy into.

Dr David Paul

January 16 2018

Readers can examine trading opportunities on GLEN and a host of other similar stocks for a single payment of £5.95. This gives access to the VectorVest Risk Free 30-day trial, where members enjoy unlimited access to VectorVest UK & U.S., plus VectorVest University for on-demand strategies and training. Link here to view.

VectorVest Unisearch

On VectorVest a simple search using the Unisearch tool will quickly find shares that are undervalued with good fundamentals that have just issued a Buy recommendation. This will give the active trader a short list of many high probability trading opportunities each week. Traders now have the opportunity to spend five weeks discovering VectorVest’s unique simplicity, automation and independent guidance. Just £5.95 buys a 5 week trial to enable deep exploration, or how the system can assist in smarter trading in as little as 10 minutes a day. Powerful tools. Proven strategies. Unique Perspectives.

Link here for more info and to set up a trial. 

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