Pallinghurst hit by Gemfields fall
Gemstones, platinum and steel-making materials company Pallinghurst Resources would report an increased headline loss of R1.39 a share for the six months to June, from a loss of 67c in the same period last year, mainly because of the drop in the Gemfields share price, it said on Thursday.
Gemstones, platinum and steelmaking materials company Pallinghurst Resources will report an increased headline loss of R1.39 a share for the six months to June, from a loss of 67c in the same period last year, mainly because of the drop in the Gemfields share price, it said on Thursday.
Pallinghurst made a contested offer earlier in 2017 to take over all the Gemfields shares it did not already own. At the time, it held 47.09% of Gemfields, which was listed in London.
It offered 1.91 of its shares for each Gemfields share, which an independent committee appointed by Gemfields’ board described as “derisory”.
Fosun Gold, a Chinese mining firm, made a cash offer but Pallinghurst secured the necessary support to drive home its deal and delist Gemfields.
Pallinghurst said its net asset value (NAV) had fallen to R4.7bn at end-June from R5bn at endDecember, which was equivalent to R4.36 a share (December: R6.61). This is lower than the most recent estimate from an analyst, who asked not to be named. He calculated a conservative NAV of R5.18 per share for Pallinghurst, on a conservative basis. This included about R3.16 per share for Gemfields based on the price that Fosun Gold was prepared to pay and the additional shares Pallinghurst issued to Gemfields shareholders.
Tshipi manganese mine, based on the Pallinghurst stake in the asset through 18.45% of Jupiter, was worth about R1.30 per Pallinghurst share plus another 72c per share for the marketing rights, he said. Jupiter also has two good undeveloped iron ore prospects in Australia, which were difficult to value but could realise quite good prices if sold, he said. He put no value on Sedibelo Platinum Mines.
At Pallinghurst’s current share price of R2.60, it was clear former Gemfields shareholders were willing to sell at the equivalent of 26p-27p, since they had no interest in being part of a diversified mining firm, he said.
Gemfields peaked at 57.50p in December and was at 32p when it was delisted at the end of July. Pallinghurst’s shares have declined steadily from 472c in March.
Although Pallinghurst’s total issued shares at the end of June were 1.09-billion after the extra shares issued for Gemfields, the weighted average for this period was 768.9-million.
Pallinghurst will release its interim results on September 26, it said.