Proactive Investors - How it's doing
Mineral & Financial Investments Ltd (LON:MAFL) the mining and metals investor, increased net asset value 6% to a record 16.1p in the half-year to end-December, 2020.
The improvement would have been greater, said the company, without the rise in the value of the pound, which reduced the total by £435,000.
Profits after tax during the half-year were £207,000 (£247,000) with interim earnings per share of 0.6p (0.7p).
Mineral & Financial said it had outperformed the FTSE 350 Mining Index and Goldman Sachs (NYSE:GS) Commodity Index over the past five years with a compound annual growth rate in NAV of 26.7%.
In the statement, M&FI said it remained upbeat over prospects for zinc where the price has risen from US$1,800t a year ago to US$2,900t.
Zinc tolling charges have also tumbled, M&FI said, which are ‘all positives for our investment in zinc, particularly Redcorp, Ascendant and our recent investment in Rathdowney Resources’.
“Ascendant and Redcorp (M&FI own 75%) continue to make progress on the Lagoa Salgada project, and they are completing a drilling program which should lead to drill results being available in the next 6 to 8 weeks.
The portfolio remains overweight in precious metals, the company said. “We reduced our weighting in the sector, but did not eliminate entirely and thus our performance was negatively affected by the correction in the gold price from the highs of US$2,068/oz.
“We have begun adding back to our precious metal holdings after the price of gold pierced through the 1,700/oz level.”
In its tactical portfolio, the largest holding is gold giant Barrick Gold, which is amongst the largest gold producers in the world, but its value has dipped recently which affected the investment performance.
A tactical position in copper bought as a hedge against an equity market correction has also been unwound.
M&FI added it is debt-free, with a good cash balance and a strong working capital position.
What the boss says: Chairman Jacques Vaillancourt
"Commodities generally struggled during the period framed by our fiscal year. We believe commodity prices will be buoyed in 2021 by a growing shift from financial assets to hard assets and a weakening US dollar."
Inflexion points
- Investee firm Cerrado makes first acquisition in Argentina
- Further resource expansion at Lagoa Salgada
- More gold mineralisation defined