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Amedeo Resources reports good progress across business

Amedeo Resources reports good progress across business

Offshore resources investor Amedeo Resources (LON:AMED) impressed the market as it revealed that all areas of the business are making good progress.

Amedeo’s largest stake is a 46.5% holding in YZJ Offshore Engineering, which in turn has a 40% share of Jiangsu Yangzijiang Offshore Engineering, a new Chinese offshore rig building yard, giving Amedeo an indirect stake of 18.6%.

The company reported that the yard development is ahead of schedule, with the wharf and finger pier nearly finished.

The skidway and the 900-tonne gantry crane are expected to be completed in the first half of 2014, it added. Civil works meanwhile are halfway to completion and are expected to be operational in the coming months.

It already has its first order to the tune of US$175mln to build a jack-up rig, which it says is progressing well and on track to be delivered midway through 2015.

Talks over more rigs are ongoing as potential customers are impressed with the company’s work.

Its other investment, a 49% stake in MGR Resources, a wholesale trader of ferrous metals and ore, continues to go “from strength to strength”.

It is now broking around 100,000 tonnes of iron ore every month, with advanced discussions underway over more long-term deals which should lead boost this amount.

MGR, which is already paying dividends since Amedeo’s investment, is continuing to explore opportunities in the related sectors of chromium and nickel.

From a financial standpoint, Amedeo, which underwent a restructuring last year, said cash administration costs have been significantly reduced compared with the previous year, reducing the gap between outgoing and incoming cash.

The shares rose 9.5% to 0.59p each.

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