Thomas Warner speaks to Jacques Vaillancourt, the CEO of Mineral & Financial Investments Ltd (AIM:MAFL). They discuss the company's strong performance as reflected in the audited results. Vaillancourt provided a comprehensive overview of the company's financial achievements, including a significant increase in net asset value and the successful outperformance of key benchmarks.
He addressed the challenges and successes of the past year, including the impact of foreign exchange fluctuations and the strategic revaluation of investments like Redcorp.
This conversation offered a glimpse into the company's adaptive strategies in the face of global economic challenges and its optimistic outlook for precious metals and the public mining markets in 2024.
Thomas Warner (TW): Jacques, following the release of your audited results for the year ended 30 June 2023, could you provide an overview of these results and their significance for Mineral & Financial?
Jacques Vaillancourt (JV): Certainly, Thomas. We're delighted with our performance this year. Our net asset value (NAV) rose by 26.5% to £9.4 million, and our NAV per share increased to 24.27p, marking a steady annual growth of 29.1% over the past five years. Our investment portfolio now stands at about £9.1 million, an 18.7% increase from last year. Notably, we've outperformed key benchmarks like the Goldman Sachs (NYSE:GS) Commodity Index and the FTSE 350 Mining Index.
TW: You mentioned a loss due to FX fluctuations. Can you expand on that and the key boosts to your NAV?
JV: Yes, FX fluctuations did present a challenge, with a loss of about £300,000. However, a major boost to our NAV came from the revaluation of our Redcorp investment, which saw its value rise from approximately $2.2 million to $3 million. This revaluation was based on a feasibility study and a new put option, giving us an exit strategy for our Lagoa Salgada stake, potentially valuing it at around $6.1-$6.2 million.
TW: How is your investment portfolio diversified, and what are the key areas of growth?
JV: Our portfolio is quite diverse, covering precious metals, base metals, food, energy, tech, and a small position in diamonds. The strategic portfolio has grown by 35-36%, and our cash holdings have increased by 65%, totaling £800,000. We've also made new investments in companies like Digby, an ESG auditing firm, and Golden Sun, reflecting our strategic growth focus.
TW: With the current global economic situation, what's your outlook for the precious metals sector and public mining markets in 2024?
JV: Despite global economic challenges, we maintain a positive outlook, especially for precious metals in 2024. The public mining markets are currently undervalued, presenting potential opportunities. We anticipate that precious metals will yield significant dividends, and we're shifting our focus slightly more towards equities than bullion in our portfolio for greater leverage.
TW: Finally, Jacques, there's a notable discrepancy between your share price and NAV. How do you interpret this, and what might it indicate for potential investors?
JV: It's indeed an unusual situation. Our share price stands at 11.75p, while our NAV is 24.27p. This gap is historically significant and, frankly, feels unreasonable given our performance and future potential. This discrepancy might suggest an attractive entry point for new investors, offering what I would call a 'Christmas present' opportunity in our shares.