Proactive Investors - Run By Investors For Investors

Bezant Resources PLC consolidates enlarged portfolio

Bezant Resources has pared back costs while adding new projects and metals to its portfolio
Bezant Resources PLC consolidates enlarged portfolio
A significant platinum project outside of South Africa would find real support from investors

Results from Bezant Resources PLC (LON:BZT) released this morning made for an interesting case study of the current state of play at the junior end of the mining sector.

Bezant has been able to bend and weave its way through some of the toughest markets we’ve seen in years, showing entrepreneurial flair in picking up new projects, but also highlighting the pressures on all companies with significant reductions in directors’ salaries and fees.

During the six months to December 2015 the company spent just £189,000 on administrative expenses, and booked an overall loss of £265,000 after taking into account its share of losses on a project held jointly with an associate.

Further cost cutting initiatives are on the way.

On the plus side of the ledger, meanwhile, the company was able to raise just over £400,000 in new equity via a subscription priced at a premium back in December.

That raise took the total cash balance at the period-end to more than £1.5mln, although as analyst Yeun Low at Shore Capital notes, it will be lower now, following a recent deal.

“A quick canter through the 2016 interims,” writes Low in his usual jaunty style, “revealed that Bezant ended December 2015 with £1.55mln of cash versus payables of just £72,000.”

But that £1.55mln “will have halved since”, according to Low, following the company’s deal to acquire new platinum and gold licences in the Choco district in Colombia from a company called Leeward Island Resources.

This deal involved the payment of a US$1mln option fee and a further US$1mln in Bezant shares.

The key to this acquisition lies in the potential for platinum on the licences. Any company that can secure a meaningful source of platinum outside of South Africa (which dominates supply) would find itself and its shares highly sought after, as investors become increasingly chary of investing in a country that is seen as increasingly corrupt.

What’s more, Bezant’s chairman Ed Nealon, who was also a major contributor in the recent fundraising, has significant experience in the platinum space, having been one of the driving forces behind the rise of Aquarius Platinum (LON:AQP) in the last decade.

“We have now successfully secured options over the Colombian platinum assets and if exercised in due course we shall seek to fast-track such assets into production,” said Nealon. “As a board, we increasingly believe that value in the prevailing difficult market conditions must be generated from revenues and, with our historic track record in platinum development and production, we look forward to potentially ultimately creating a low-cost mining operation located outside of South Africa.”

Early cash flow would have the additional advantage of supporting further work on the company’s other projects, the Eureka copper-gold project in Argentina and the Mankayan gold project in the Philippines, which has been up for sale for some time.

The shares were flat in early trade, at 2.25p.

Why Invest In Bezant Resources plc? Read More Here

Register here to be notified of future BZT Company articles
View full BZT profile

Bezant Resources plc Timeline

Related Articles

picture of someone mining
October 31 2016
Full leaching capacity was realised within the first three weeks of operation, with metal recovery in line with forecasts
Gold bars and dollars
June 16 2016
The Atlanta site, spanning 12,000 acres, in Lincoln Country, produced 110,000 ounces of the yellow metal as an open pit between 1975 and 1985.
August 09 2016
Shares in Galantas are up over 63% since the beginning of January

© Proactive Investors 2017

Proactive Investor UK Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use