Small Talk: One diamond is a mine's best friend
Monday 07 December 2009
There are some companies on Aim that like to keep a low profile, and others that have a low profile even if they do not want it. Others, its seems, cannot avoid getting into the public eye. Petra Diamonds, the Aim-listed miner, last month earned $6.28m by selling a 168-carat white rock, dug from its Cullinan mine in South Africa this year.
The group was clearly encouraged by Cullinan's potential. Last week Petra announced that it has raised £72.7m (a pretty hefty chunk for an Aim-listed group), through a share placing. The proceeds will be applied in part-settlement of the $80m loan from a group called Al Rajhi Holdings as part of an option to increase Petra's holding in the Cullinan mine from 37 per cent to 74 per cent, which was announced last month. The money will also help with working capital, and to increase diamond production from its six producing mines in South Africa and Tanzania, the company said. Petra will also repay a $20m Al Rajhi convertible loan note.
Petra placed more than 120m new shares, at a 9 per cent discount to the trading price. "Petra is delighted with the overwhelming support from our new and existing shareholders, who share our vision of becoming one of the world's leading diamond producers," said the chief executive, Johan Dippenaar. "We welcome over 40 new international long-only institutional investors to the register, which we hope will transform the liquidity of the company's shares. The placing not only strengthens the company's balance sheet, allowing Petra to invest in the development of our producing mines, but will also significantly increase our attributable resources, production and cash-flow following the consolidation of our holding in the Cullinan mine."
Successful Skywest goes to market
We have covered Skywest Airlines a few times in this column, largely to highlight that even when the global aviation industry is somewhere close to meltdown, there are pockets of the Alternative Investment Market (Aim) that can lead the way.
The group has developed a cracking wheeze transporting mining company employees, particularly those working for Rio Tinto, across the vast expanse that is Australia, often to the isolated city of Perth.
While the likes of British Airways have spent much of the year churning out disappointing results and passenger numbers, Skywest's figures show that passenger numbers on its charter flights have jumped by nearly 50 per cent year on year.
But Skywest has long had a particular problem that it does not share with BA. Its shares, while taking off in line with its passenger numbers, are illiquid, a problem that the company thinks is holding it back and a problem it now hopes it has remedied by gaining permission to take a dual listing on the Sydney stock exchange.
The shares start trading today. The Australian listing will improve liquidity, the company says, adding that it hopes Australian investors will take stakes.
Invesco buys into tiddler with coal mine bonanza
Another Aim-listed group from Australia had reason to raise a toast last week. Altona Energy, a real Aim market tiddler, which has three exploration licences, said the giant fund management group Invesco has increased its holding, taking its overall stake in the group to 17.19 per cent.
The punters clearly see something in Altona which, to the untrained eye, looks very much like a plethora of Aim-listed energy companies that struggle to produce very much at all. Altona says that its, "primary focus to date has been the completion of a bankable feasibility study for its wholly owned 'Arckaringa' Project for an integrated 10m barrel per year coal-to-liquid plant with a 560 MW co-generation power facility." The group's three sites are all lie close to the Adelaide-to-Darwin railway line, making transportation of the coal that much easier when Altona eventually gets it out of the ground.
"Containing more than 7.5 billion tonnes of coal, these deposits are effectively one of the world's largest undeveloped energy banks, capable of conversion into clean liquid fuels, low cost power and high value industrial feedstocks," the company said last week.
Invesco is buying into what has been a winning stock. Altona's shares have put on more than 16 per cent in the past month, the market encouraged by Invesco's. The jump is part of an outstanding 471 per cent increase in the past 12 months.
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