Two Basic Materials Stocks Trending on the AIM - Goldplat PLC & Thor Mining PLC

  • Jul 31, 2020 BST
  • Team Kalkine
Two Basic Materials Stocks Trending on the AIM - Goldplat PLC & Thor Mining PLC

Summary

  • As per the industry experts, the Bank of England is unlikely to announce additional funds above £100 billion stimulus package announced in June 2020 to cope up with the pandemic.
  • As per the market experts survey, the expectation for the year ahead UK inflation increased to 3.2 percent in July 2020 from 3.0 percent in June 2020.
  • Goldplat PLC's subsidiary signed a binding term agreement for the sale of Kilimapesa Gold Pty Limited.
  • Goldplat PLC expects to report a profit this year.
  • Thor Mining acknowledged successful follow-up sampling program at Pilbara Goldfields.
  • Thor Mining would invest AUD 0.4 million to increase stake to 30 percent from the current 25 percent in EnviroCopper Limited.

Given the above-market conditions, we would review two basic materials stocks - Goldplat PLC (LON: GDP) &Thor Mining PLC (LON: THR). Based on 1-year performance, GDP was up by 174.58 percent, whereas THR was down by 40.00 percent (as on 31 July 2020 before the market close at 12:20 PM GMT+1). Let's walk through the financial and operational updates to understand the stocks better.

Goldplat PLC (LON: GDP) - Goldplat Recovery Limited & Gold Recovery Ghana Limited reported operating profit in Q4 FY2020

Goldplat PLC is a UK based mining company, which is engaged in th gold exploration and production. The Company is engaged in gold recovery projects in South Africa and Ghana and has an underground mining operation in Kenya. The Company is listed on the FTSE AIM All-Share index.

Kilimapesa Gold Pty Limited

On 31 July 2020, Goldplat announced that the subsidiary Gold Mineral Resources Pty Limited signed a binding term sheet with Mayflower Capital Investments Pty Limited for sale of Kilimapesa Gold Pty Limited. Kilimapesa owns assets and licenses for underground mining operations in Kenya. As part of the deal, Goldplat would receive USD 1.5 million that would be obliged by shares of equivalent value in Mayflower, in addition, Goldplat would get 1 percent net smelter royalty capped at USD 1.5 million on the future production from Kilimapesa. Goldplat and Mayflower would inject funds of approximately USD 150,000 and USD 300,000, respectively as an unsecured interest-free loan into Kilimapesa. The funds would be used to restart the treatment of artisanal tailings at the processing plant. As on 30 June 2020, Kilimapesa had net liabilities of £4.1 million, including an intercompany loan from Gold Mineral Resources. It had net assets of close to £4.1 million after cancelling the intercompany loan. For year ended June 2020, Kilimapesa made unaudited revenue of £1.1 million and an operating loss of £0.5 million.

Q4 FY2020 (ended 30 June 2020) as reported on 28 July 2020

The Company's operations were impacted due to the lockdown in South Africa, although the operations have resumed. Goldplat's subsidiary Goldplat Recovery Limited (GPL) reported an operating profit of £2,067,000 in Q4 FY20 and £5,511,000 for full-year FY20. Gold Recovery Ghana Limited (GRG) generated an operating profit of £280,000 in Q4 FY20 and £638,000 for full-year FY20. As on 30 June 2020, the Company had cash of £3.2 million. The loan balance with Scipion was £1 million, and the plan is to extend the loan facility by six months to May 2021.

Group Structure of Goldplat PLC

 (Source: Company Website)

Share Price Performance Analysis

1-Year Chart as on July-31-2020, before the market close (Source: Refinitiv, Thomson Reuters)

Goldplat PLC's shares were trading at GBX 7.87 up by about 8.55 percent from the last closing price (as on 31 July 2020 before the market close at 12:20 PM GMT+1). Stock 52-week High and Low were GBX 8.29 and GBX 2.30, respectively. The Company had a market capitalization of £12.31 million.

Business Outlook

Goldplat had highlighted that it expects to report a profit in 2020. Goldplat is likely to benefit from the shareholding in Mayflower without providing investment or management resources for the development of Kilimapesa. The Company would invest along with Mayflower to recommence the treatment of artisanal tailings at the processing plant in Kilimapesa, and it is also considering the construction of a new tailing facility. The Company is also seeking a buyer for Anumso. The focus would be to improve matreial recoveries for future growth.

Thor Mining PLC (LON: THR) – Raised AUD 970,000 through the placement of new shares

Thor Mining PLC is a UK based mining company, and it is listed in the UK and Australia. The Company owns a 100 percent stake in the Molyhil tungsten project in the Northern Territory of Australia, Pilot Mountain tungsten project in Nevada USA and Pilbara Gold. It holds 40 percent ownership in the Bonya copper deposit and 25 percent interest in Australian copper development company EnviroCopper Limited. White Violet & Samarkand JV is owned along with Arafura Resources Limited. Thor deals in commodities such as tungsten, molybdenum and copper.

Recent events

  • On 31 July 2020, Thor Mining reported the follow-up sampling programme at Pilbara Goldfields. The Company outlined gold visible in sample panning at Pilbara Goldfield tenements. Sampling was performed at 32 stream sites and 49 gossan sites, and gold was visible at 17 out of 32 streams. Mapping and sampling of over 800 metres of strike length and 75 metres wide were performed at gossan sites with prior nickel content in rock chips.
  • On 14 July 2020, the Company reported the sale of royalty entitlement for Spring Hill gold project at AUD 1.0 million. The deal is yet to receive approval from the Australian Government Foreign Investment Review Board (FIRB). Thor Mining received AUD 50,000 as initial payment and it would receive AUD 0.4 million post-approval from FIRB. The Company would get two milestone payments of AUD 0.3 million each after reaching production of 25,000 ounces of gold and 50,000 ounces of gold, respectively.

Quarterly update (April 2020 to June 2020) as reported on 30 July 2020

During the quarter, the Company placed 194 million new shares at AUD 0.005 per share and raised AUD 970,000. Thor Mining holds a 25 percent stake in EnviroCopper Limited, a private Australian company. The Company plans to acquire an additional 5 percent stake in the Company for AUD 0.4 million, and Thor Mining has already paid AUD 0.1 million for the deal. EnviroCopper Limited has an interest in projects such as Kapunda copper mine and Moonta copper project and has rights to earn up to a 75 percent interest in both projects.

Highlights of Molyhil Tungsten Project

(Source: Company Website)

Share Price Performance Analysis

1-Year Chart as on July-31-2020, before the market close (Source: Refinitiv, Thomson Reuters)

Thor Mining PLC's shares were trading at GBX 0.58 up by about 52.63 percent from the last closing price (as on 31 July 2020 before the market close at 12:20 PM GMT+1). Stock 52-week High and Low were GBX 0.7925 and GBX 0.1301, respectively. The Company had a market capitalization of £4.87 million.

Business Outlook

In the next quarter, the Company plans to perform borehole hydrogeological testing at the Kapunda copper project in Australia and complete the acquisition of uranium and vanadium venture in the US. The Company is currently discussing with the Australian government to assist in mineral projects. The focus would also be on securing project investment for the Pilot Mountain project in the US. Thor would also be planning and getting permission for a drilling programme at Pilbara Gold.

 


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