4th Nov 2015 18:19
LONDON (Alliance News) - Starvest PLC on Wednesday said that many of its portfolio companies exploring for gold, iron ore and other minerals have found it hard to raise "essential" cash, meaning their value has fallen, leading to a tough financial year for the investment company.
The company's loss before and after tax widened to GBP964,136 in the year to September 30 from GBP356,324 in the prior year.
Starvest had a "market improvement" in net asset value in 2014 after a difficult spell, but had a reversal in fortunes in the financial year to September 30. The company's net asset value per share fell to 3.09 pence from 11.87p over its last financial year.
"Following the three tough years of 2011 to 2013, 2014 showed a marked improvement in the company's net asset value. Sadly, that, and more has been lost during the last year so that the closing net asset value has fallen to a level not previously known," Callum Baxter, chairman and chief executive, said in a statement.
Baxter said it was a "harsh" environment for early stage mineral explorers, amid a plunge in the price of oil and other commodities.
"At the balance sheet date, more than 45% of the portfolio value was attributed to oil stocks which have been hit by a collapse of world oil prices. For example, a year ago we reported having seen a dramatic rise in the price of Nordic Energy PLC, a company then valued at 7 pence per share, but which has since failed in its attempt to be admitted to AIM leading to a boardroom hiatus and a current price of 0.8 pence per share," Baxter said.
But it wasn't all doom and gloom, Baxter said.
"On a brighter note, we have two companies in the portfolio each of which is edging towards gold production; we wait with anticipation for continued good news from Ariana Resources PLC and KEFI Minerals PLC," he added.
Shares in Starvest closed flat at 2.75 pence on Wednesday.
By Samuel Agini; [email protected]; @samuelagini
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