Keras Resources (LON:KRS) – CORP: Pre-payment Agreement
Market Cap: £16.5m; Current Price: 1.2p
Brining forward the payment date to improve working capital
Keras Resources has reached an agreement with Norton Gold Fields on all of the ore it delivered to the Paddington Mill. As a result of the agreement, 80% of the payment to Keras will be expedited.
The gold content will be calculated from hauled ROM tonnes with average grade estimated by the assay results from the sample crushing plant at the Paddington Mill, assuming 5% moisture content and 90% recovery.
Keras’ ore will be stockpiled on the Paddington ROM pad and run through the sample plant as soon as it has available capacity.
The gold price used will be fixed to the close of business on the first day of gold pour following the delivery of Keras ore and will be determined based on the A$/oz price received from the Perth Mint.
The provisional payment will be 80%, of Keras’ 78% interest of the estimated revenue, less the attributable charges and expenditure. The balance will be paid once all sampling and test work results are returned.
The first pre-payment is being processed and the second is expected in the first two weeks of June once the sample plant becomes available. Final reconciled production will be reported quarterly.
NORTHLAND CAPITAL PARTNERS VIEW: A positive development for Keras Resources that results in the brining forward of the payments due to Keras. Previously, Keras was due to be paid 42 days after all laboratory test work on moisture content, recoveries and grade was completed. This was a significant amount of time for valuable working capital to be tied up and could have delayed work at Keras’ other projects. Following this latest agreement, Keras will receive the pre-payment once the ore has been processed through the mobile plant and a provisional gold determination statement has been prepared. The payment will then be made at the next payment run process by Norton’s subsidiary with the balance paid on completion of all test work.
Quarto Group (LON:QTR) – CORPORATE
Market Cap: £45.3m; Current Price: 230p
AGM and Q1 Trading Update: FY16 on track for growth and debt reduction
Quarto Group*, the global illustrated book publisher and distributor, will hold its AGM from 11.00 today.
In a Trading Update the Group notes that revenue for the quarter to 31 March was $33.3m (Q1 15: $28.4m). The company notes that Q1 is its quietest trading quarter, but adds that there has been “good momentum” from Q4 2015. As outlined in its FY15 reporting, in 2016 revenue will continue to be more H2 weighted than in prior years. The Group's net debt on 31 March 2016 was $67.6m (31 March 2015: $77.6m)
Commenting on its outlook, Quarto notes: “On the basis of current levels of trading, the Group is on track to meet management expectations for the year end and deliver both debt reduction and organic growth”.
Comment on VAT on adult colouring books. Quarto notes recent press coverage on the VAT status of adult colouring books and reports that it has not been contacted by HMRC on this matter. The Group sought guidance from HMRC in 2015 on the VAT treatment of adult colouring books and has been charging the standard 20% VAT rate across all adult colouring books in the U.K. since then.
For the year to December 2015 Quarto had reported revenue +6%YoY to US$182.2m, with adjusted operating profit of US$17.2m, +8%YoY, and PBT (adj.) +18%YoY at US$14.1m.
Management Resource Solutions (LON:MRS) – CORP: Funding
Market Cap: £3.2m; Current Price: 9.9p
£300,000 capital funding
MRS raised £300,000 (before expenses) via a placing of 3,529,411 shares at 8.5p. This represents c. 9.7% of the issued share capital of the company.
The net proceeds will fund a pipeline of new and potential contract wins as well as provide the business with additional working capital needs.
Trading in the new shares will become effective on or around 27 May 2016 and following admission the company will have a total of 36,346,093 shares in issue.