Mineral & Financial Invest. Limited

Earnings Release • Mar 27, 2019

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RNS Number : 1673U

Mineral & Financial Invest. Limited

27 March 2019

The following amendments have been made to the 'Interim Results for the Six Months Ended 31 Dec 18' announcement released on 12 March 2019 at 7:00 am under RNS No 5189S.

Mineral and Financial Investments Limited announces that the historical 2017 data was not correctly stated. Therefore, the comparative NAV, NAV per share and respective growth in NAV were not correctly stated.

The changes are as follows:

-     NAV as at 31 December 2017 was £2,602,816

-     NAV per share as at 31 December 2017 was 7.43p

-     The NAV per share increased 67.3% from 31st December 2017

All other details remain unchanged. The full amended text is shown below.

Mineral & Financial Investments Limited

("M&FI" or "the Company")

Unaudited Interim Results for the Six Months Ended 31 December 2018

HIGHLIGHTS:

·      Unaudited net earnings for the first 6 months of 2019 period were £722,000 or 2p per share

·      NAV per share at Dec 31, 2018 up 67.3% to an all-time high of 12.5p vs. same period last year

·      The Company remains debt free and with a cash balance of £750,000

·      Completed accretive acquisition of TH Crestgate GmbH, which is now a wholly owned subsidiary

·      Doubling of the resource at Redcorp's Lagoa Salgada Zinc project to 20.7Mt1 with gross Zinc Equivalent metal content +89.5% during the period2

·      Board strengthened with the Appointment of Jamie Lesser as Chief Operating Officer

GEORGE TOWN CAYMAN ISLANDS, March 12, 2019 - Mineral and Financial Investments Limited (LSE-AIM: MAFL) ("M&FI" or the "Company") is very pleased to announce its unaudited interim results for the six months ended 31 December 2018.

Chairman's Statement

The Board of Mineral & Financial Investments Ltd. is very pleased to report its unaudited interim results for the first half period ending 31st December 2018.  The company generated a profit before tax of £722,000 and a fully diluted EPS gain of 2p per share vs 0.4p per share in the same period last year.  The NAV per share increased 67% from 31st December 2017 to 12.54p or £4,392,940 a new all-time high for M&FI.  The company retains a cash position of £750,000.  The board of directors believes in keeping costs to a minimum and maintaining aligned interests with shareholders.

Continued NAV growth was in spite of market headwinds particularly from the weak zinc price and their impact on our total 2,052,546 shares in Ascendant Resources, removing 1.96p from our NAV per share.  We expected this trend to reverse, with LME Zinc inventories now approaching their lowest point in well over 21years and halving in the last month alone.  Since the period end, the zinc price has risen only 10% whilst Ascendant shares are up 30% YTD.

H1 2019 is the first reporting period following the acquisition of TH Crestgate (THC), in which we have consolidated THC numbers into the M&FL, and which has been accretive to NAV.  Over the past four years the total NAV of M&FI has grown from £908k to £4.4m and we look forward to the de-risking of future value both from further potential exploration success at Lagoa Salgada and agreed milestone payments from Ascendant Resources, who are ahead of schedule on the required project spend.

The agreed Ascendant option earn-in cash payment schedule to M&FI is set out below, but this is at Ascendant's discretion and therefore there can be no guarantee that the payments will be made

Due on or Before	Amount	Due on or Before	Amount
June 2019	US$250,000	June 2021	US$1,000,000
Dec. 2019	US$500,000	June 2022	US$1,000,000
June 2020	US$500,000	Dec 2022	US$2,500,000 & Feasibility Study

The following is a summary of the NAV, updated to include the unaudited NAV calculation released on February 21, 2019:

	Dec. 31 2015	Dec. 31 2016	Dec. 31 2017	Dec. 31 2018	CAGR (%) 2018 / 2015
NET ASSET VALUE (NAV)	£908,476	£1,494,360	£2,602,816	£4,392,940	68.2%
NET ASSET VALUE PER SHARE (NAVPS)	6.47p	6.25p	7.43p	12.54p	24.4%

Tactical Portfolio:

The purpose of the Tactical Portfolio is to allow M&FI flexibility to take advantage of short-term opportunities across asset classes in high quality names, whilst remaining liquid enough to deploy working capital elsewhere when needed.  We took a view on gold in early 2018 which we continue to reflect in the more recent portfolio additions of Barrick Gold (added post period end) and Alamos Gold, (and Cerrado Gold in the Strategic Portfolio).  In addition to the core 3% of Ascendant Resources the Portfolio at 31st December 2018 includes positions in:

Company	Development Stage	Type of Security	Primary Commodity	Geographic Area of Activities
Ascendant Resources	Production	Common Equity	Zinc & Lead	Honduras & Portugal
Alamos Gold	Production	Common Equity	Gold	Canada, USA, Mexico & Turkey
Trevali Mining	Production	Common Equity	Zinc & Lead	Peru, Cda, Namibia, Burkina Faso
Imperial Metals	Production	Common Equity	Copper	Canada
Cabral Gold	Exploration	Common Equity	Gold	Brazil
Artemis Resources	Explo/ Near Term Prod.	Common Equity	Gold, Copper, Cobalt	Australia
Gold	N/A	ETF	Gold	Global
Silver	N/A	ETF	Silver	Global
Platinum	N/A	ETF	Platinum	Global
Copper	N/A	ETF	Copper	Global

Strategic Portfolio:

The Strategic Portfolio allows M&FI to assess the three key fundamentals to a successful investment in the sector, management, finance and geology.  We can change the first two of these and so we exercise in depth due diligence on geology.  As such we are constantly reviewing potential investments filtering through the many underfunded projects left struggling by 10yrs of underperformance.  The Board continues to like zinc and gold which is well expressed in both portfolios and is reviewing investments in other commodities with the potential to outperform.

The Strategic Portfolio includes:

Company	Development Stage	Type of Security	Primary Commodity	Geographic Area of Activities
Redcorp Empreedimentos Mineiros Lda.	Exploration	Common Equity	Zinc & Lead	Portugal
Cap Energy	Exploration	Common Equity	Oil & Gas	Senegal & G. Bisau
Cerrado Gold	Exploration	Common Equity	Gold	Brazil
Toro Gold	Production	Common Equity	Gold	Senegal

On behalf of the Board

Jacques Vaillancourt, Executive Chairman

FOR MORE INFORMATION:

Katy Mitchell and Jessica Cave, WH Ireland Limited                  +44 161 832 2174

Jon Belliss, Novum Securities Limited                                         +44 207 399 9400

James Lesser, Mineral & Financial Investments Ltd.                   +44 777 957 7216

Statement of comprehensive Income

for the 6 months ended 31 December 2018

		UNAUDITED	UNAUDITED	AUDITED
		6 months to 31 December 2018	6 months to 31 December 2017	18 months to 30 June  2018
	Note	£'000	£'000	£'000
Continuing operations:
Investment income		-	1	2
Net gains on investments		838	219	313
Total income		838	220	315
Operating expenses		(116)	(85)	(260)
Operating profit		722	135	55
Profit before taxation		722	135	55
Profit for the period attributable to owners of the Company		722	135	55
Earnings per share attributable to owners of the Company during the period	3	pence	pence	pence
Basic:		2.1	0.4	0.2
Diluted:		2.0	0.4	0.2

Statement of Financial Position

as at 31 December 2018

		UNAUDITED	UNAUDITED	AUDITED
		31 December 2018	31 December 2017	30 June 2018
		£'000	£'000	£'000
CURRENT ASSETS
Financial assets		3,679	2,200	2,269
Trade and other receivables		19	7	10
Cash and cash equivalents		750	456	422
		4,448	2,663	2,701
CURRENT LIABILITIES
Trade and other payables		45	50	68
Convertible unsecured loan notes		10	10	10
		55	60	78
NET CURRENT ASSETS		4,393	2,603	2,623
NET ASSETS		4,393	2,603	2,623
EQUITY
#### Share capital		3,095	3,095	3,095
#### Share premium		5,886	5,886	5,886
#### Loan note equity reserve		6	6	6
#### Share option reserve		23	23	23
#### Other reserves		16,813	15,765	15,765
Retained earnings		(21,401)	(22,143)	(22,123)
Shareholders' equity		4,393	2,603	2,623

Statement of Changes in equity

for the 6 months ended 31 December 2018

	Share capital	Share premium	Loan note reserve	Share option reserve	Other reserves	Accumulated losses	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
At 30 June 2017	3,092	5,866	6	23	15,736	(22,279)	2,444
Profit for the 6 months to 31 December 2017	-	-	-	-	-	136	136
Share issues	3	20	-	-	-	-	23
At 31 December 2017	3,095	5,886	6	23	15,736	(22,143)	2,603
Profit for the 6 months to 30 June 2018	-	-	-	-	-	20	20
At 30 June 2018	3,095	5,886	6	23	15,736	(22,123)	2,623
Profit for the 6 months to 31 December 2018	-	-	-	-	-	722	722
Acquisition of TH Crestgate	-	-	-	-	1,048	-	1,048
At 31 December 2018	3,095	5,886	6	23	16,784	(21,401)	4,393

Statement of Cash flow

for the 6 months ended 31 December 2018

		UNAUDITED	UNAUDITED	AUDITED
		6 months to 31 December 2018	6 months to 31 December 2017	18 months to 30 June  2018
		£'000	£'000	£'000
OPERATING ACTIVITIES
Profit/(loss) before taxation		722	135	55
Adjustments for:
(Gain)/loss on disposal of financial assets		(449)	6	12
Fair value adjustment to financial assets		(389)	(225)	(325)
Investment income		-	(1)	(2)
Share based payment charge		-	-	11
Operating cashflow before working capital changes		(116)	(85)	(249)
(Increase)/decrease in trade and other receivables		(9)	3	(3)
Increase/(decrease) in trade and other payables		(23)	(25)	18
Net cash outflow from operating activities		(148)	(107)	(234)
INVESTING ACTIVITIES
Purchase of financial assets		(188)	(428)	(1,806)
Disposal of financial assets		664	49	1,124
Investment income		-	1	2
Net cash (outflow)/inflow from investing activities		476	(378)	(680)
FINANCING ACTIVITIES
Net proceeds of share issues		-	23	1,062
Net cash outflow from financing activities		-	23	1,062
Net increase/(decrease) in cash and cash equivalents		328	(462)	148
Cash and cash equivalents at start of period		422	918	274
Cash and cash equivalents at end of period		750	456	422

Notes to the unaudited interim statement

for the 6 months ended 31 December 2018

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 consistent with those set out in the Company's Annual Report and Accounts for the 18 months ended 30 June 2018.

This interim financial information for the 6 months to 31 December 2018 was approved by the board on 11 March 2019.

The unaudited interim financial information for the 6 months to 31 December 2018 does not constitute statutory accounts. The comparative figures for the 18 months ended 30 June 2018 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 to 31 December 2018	6 months to 31 December 2017	18 months to 30 June  2018
	£'000	£'000	£'000
Weighted average number of shares for calculating basic earnings per share	35,037,895	35,037,895	33,661,491
Weighted average number of shares for calculating fully diluted earnings per share	35,842,895	35,842,895	34,466,491

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1 Gross to Redcorp, Current Redcorp Ownership: TH Crestgate 75%, Ascendant 25%

2 Zinc equivalent metal grade (ZnEq%) was calculated as follows: ZnEq% = ((Zn Grade * 25.35) + (Pb Grade * 23.15) + (Cu Grade * 67.24) + (Au Grade * 40.19) + (Ag Grade * 0.62)) / 25.35; Metal prices used: US$1.15/lb Zn, US$1.05/lb Pb, $3.05/lb Cu, US$19.40/oz Ag, and 1,250/oz Au; No recoveries were applied

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