Proactive Investors - Run By Investors For Investors

Northland Capital Partners View on the City Premier African Minerals and Tavistock Investments

Northland Capital Partners View on the City Premier African Minerals and Tavistock Investments

Premier African Minerals (LON:PREM) – SPECULATIVE BUY* RHA update
Market Cap: £13m; Current Price: 1.9p
Plant modifications installed and loan accounts registered in Zimbabwe

  • The modifications to the RHA processing plant (08.07.15) have now been installed and the plant is now expected to operate at the design tonnage. At present, fine tuning and optimisation is continuing.
  • Based on the current APT price of c. US$203/mtu, Premier African Minerals believes a higher volume and lower grade production schedule will generate higher returns at the mine. Prem is in discussion with its offtake partners regarding this strategy. Darwin Strategic has consented to lower the Conversion Trigger of the existing loan notes from 60% to 50% WO3 in the concentrate, allowing the Company to proceed with this strategy.
  • At US$203/mtu Prem expects to receive between US$130/mtu and US$120/mtu. Opex has risen above the US$89/mtu expected, due to additional costs, processing plant delays and expedited pit development. Opex is expected to fall as larger tonnages are processed and recoveries improve.
  • Concentrate shipments are expected to resume from 28/08/2015.
  • Prem’s loans to RHA have now been registered with the Zimbabwe Reserve Bank and foreign exchange approvals have been granted for the repatriation of debt payments (US$9.5m) from Zimbabwe to Prem.
  • Prem plans to further beneficiate the wolframite concentrate from RHA.

NORTHLAND CAPITAL PARTNERS VIEW: Premier African Minerals appears to be getting over the teething issues associated with the ramp up of new plant. Design deficiencies meant that the plant could not accept the designed tonnage and up to 40% of the feed was rejected as oversize and stockpiled. Prem expects to process the stockpile this week and then will continue to process run-of-mine ore. The continued fall in the ammoniumparatungstate price (APT) and increase in opex will squeeze margins in the near term but opex is expected to reduce as the plant ramps up. Importantly Prem’s loans to RHA have now been registered ensuring that the Company can recover its capital expense. We note that Prem has indicated it plans to further beneficiate the wolframite concentrate at RHA which could lead to the production of a higher value product.

Tavistock Investments (LON:TAVI) – CORP: Finals
Market Cap: £17.0m; Current Price: 5.87p
Considerable progress in building an integrated financial services business

  • Revenue of £5m for the 15 month period (the comparator period was when the company operated its now discontinued software business) with a post tax loss of £0.9m and EBITDA loss of £0.4m. Group was established last May with the acquisitions of Tavistock Partners, an IFA, and Tavistock Wealth, an investment management business. Net assets of £11.4m with £4.7m in cash (following February’s £3.3m raise).
  • Strategic commercial relationship with Novia Financial last September whereby Tavistock Wealth has endorsed Novia as a preferred wrap platform and Novia will introduce advisers to Tavistock on a selective basis. Novia also invested £250k in shares and provided a £750k unsecured convertible loan facility.
  • In October, Tavistock Wealth launched a discretionary fund management service. It now manages £150m on behalf of 1,800 clients. In February, Tavistock increased its geographic reach and operational scale through the acquisition of Standard Financial. In March, it took on various books of client relationships through the acquisition of Cornerstone Asset Holdings and in May acquired Duchy Independent Financial Advisors, a West Country IFA.
  • 236 financial advisers from Financial Limited have now transferred to the newly established Tavistock Financial network. Together with the Tavistock Partners network, Duchy IFAs and new joiners, Tavistock now has more than 270 advisers looking after 65,000 clients with more than £3bn assets under advice.

NORTHLAND CAPITAL PARTNERS VIEW: Considerable progress made during the year as the company looks to build an integrated financial services business with a number of acquisitions made. Management is now focused on integrating those acquisitions, establishing the necessary infrastructure (including the deployment of automation software) and the increasing the uptake of investment management services to generate profits and a dividend stream. The market remains fragmented and there is scope for further acquisitions.

1. Northland Capital Partners Limited (“Northland”) acts as Nominated Advisor and/or Broker to the company.

2. Northland) and/or its affiliates companies do beneficially own 1% or more of any class of the issuer’s equity securities, as of the end of the month immediately preceding the date of issuance of the research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month. 

3. The authoring analyst or any associate of the authoring analyst does maintain a long or short position in any of the issuer’s securities directly or through derivatives, including options or futures positions.

4. Northland, its affiliated companies, partners, officers, directors or any authoring analyst of Northland has provided services to the issuer for remuneration during the preceding 12 months other than investment advisory or trading services.

5. Northland or any of its affiliated companies has performed investment banking services for the issuer during the 12 months preceding the date of issuance of the report.  

6. A partner, director, officer, employee or agent of Northland or any of its affiliated companies is an officer, director, employee or advisor of the issuer.  Disclosures are applicable for all companies

7. The authoring analyst, or any associate of the authoring analyst, has viewed the material operations of the issuer. 

8. The authoring analyst, or any associate of the authoring analyst, received reimbursement for travel expenses.

9. Northland makes a market in the securities of this company.

 

 

DISCLAIMER

This document is provided solely to enable clients to make their own investment decisions. It may therefore not be suitable for all recipients and does not constitute a personal recommendation to invest. It does not constitute an offer or solicitation to buy or sell securities or instruments of any kind. If you have any doubts about the suitability of this service, you should seek advice from your investment adviser. This document is produced in accordance with UK laws and regulations. It is not intended for any person whose nationality or residential circumstances may render its receipt unlawful.

The past is not necessarily a guide to future performance. The value of shares and the income arising from them can fall as well as rise and investors may get back less than they originally invested. The information contained in this document has been obtained from sources which Northland Capital Partners Limited believes to be re¬li¬able. The Com¬pany does not warrant that such information is accurate or complete. All estimates and prospective figures quoted in this report are forecasts and not guaranteed. Opinions included in this report reflect the Company’s judgement at the date of publication and are subject to change without notice. If the investment(s) mentioned in this report are denominated in a currency different from the currency of the country in which the recipient is a resident, the recipient should be aware that fluctuations in exchange rates may have an adverse effect on the value of the investment(s). The listing requirements for securities listed on AIM or PLUS markets are less demanding, also trading in them may be less liquid than main markets.

Northland Capital Partners Limited and/or its officers, as¬sociated entities or clients may have a position, or other material interest, in any securities men¬tioned in this report. Northland Capital Partners Limited does not provide recommendations on securities of firms with which it has a corporate relationship. More information about our management of Conflicts of Interest, Investment Research Methodology & Definition of Recommendations can be found at www.northlandcp.co.uk 

Northland Capital Partners Limited is authorised and regulated by the Financial Conduct Authority and a Member of the London Stock Exchange.

Published by/copyright: Northland Capital Partners Limited, 2013. All rights reserved

© Proactive Investors 2019

Proactive Investors 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