quote from JK Galbraith
… markets fell back. As the FTSE100 at 5363 and FTSE250 both fell 3.3%, while the Aim All Share at 707 declined 3%. In the UK, CPI Inflation fell to 5%, Unemployment rose by nearly 200,000, while consumer confidence fell to the lowest level since May 2004. A clearer picture of double skimming across recession seems to be emerging. Fears of Eurozone debt contagion grew with Spain and Italian Bonds put under pressure.
… the BOE Interest Rate Minutes on Wednesday may offer some relief from debt worries. It will be declining confidence in Europe on Tuesday and higher US jobless figures on Wednesday likely to cause investor economic concerns. Markets look set to remain cautious until there is clearer green light at the end of the debt write-down tunnel.
Accumuli (ACM) – £12.1m at 8.5p
Managed IT security services provider Accumuli has produced a strong set of figures for the first half of 2010-11. Revenues are not as high as expected but that is because there are lower sales of lower margin products. Accumuli generated revenues of £5.53m in the six months to September 2011. Underlying profit was £931,000. There have been some initial cross-selling benefits from integrating the acquired businesses but lower costs have done more to help to improve profit. Accumuli will invest in further development of its own intellectual property as well as looking for more acquisitions. Accumuli also wants to generate more visible earnings through increased sales of managed services rather than one-off product sales. There have been no more negative discoveries in the financials of Boxing Orange. The deferred consideration has been renegotiated and it appears that around £400,000 will be payable. finnCap forecasts a full year profit of £1.7m, rising to £2.4m in 2012-13 putting the shares on 9x P/E for August 2012 . That assumes that no more acquisitions are made and Accumuli is likely to make more purchases over the coming years.
Cash generation is better than expected and house broker FinnCap expects Accumuli to have net cash by the end of March 2012.
Paragon Diamonds (PRG) – £51.7m at 27.5p
Paragon Diamonds has a portfolio of African diamond exploration assets. The most interesting of these is in Lesotho, where Paragon owns 85% of the Lamphane kimberlite project. Bulk sampling has started and the results should be published in the first quarter of 2012. The bulk sampling will be extended after the initial sample has been processed. Lamphane is just north of Liqhobong, which is being mined by Firestone Diamonds.
Other interests are in Botswana, Zambia, Tanzania and Sierra Leone. Paragon is generating revenues from its Sierra Leone alluvial diamond mine but they remain modest. Interim revenues increased from £349,000 in the period to December 2011 to £687,000. The interim loss was £6.32m, mainly due to a write-down of the Sierra Leone assets, but the cash outflow was £726,000.
Paragon has been quoted for just over one year.
At the end of June 2011, Paragon had £3.65m in the bank. There was also a £2.07m from parent company Obtala Resources.
Hambledon Mining (HMB) – £28.8m at 3.88p
Hambledon Mining’s interests are in the north east of Kazakhstan. The Sekisovskoye mine is near the city of Ust-Kamenogorsk and it is already producing gold. The other interests are north of Astana and include Tellur, which could be in production before the end of 2013. All of the interests are 100%-owned. Open pit mining is carried out at Sekisovskoye and it will last until the end of 2014. Underground mining has just got underway. The cost of underground production should be less than $800/ounce – including royalties of $80/ounce. A mineral process plant will increase gold recovery by the second half of 2013. Target production for 2012 is 30,000 ounces of gold – 21,000 ounces open pit and the rest underground. The target for 2017 is 100,000 ounces. The indicated and inferred resources of the Sekisovskoye mine are 1.93m ounces of gold and 2.67m ounces of silver.
Hambledon has intention of raising more cash from share issues to finance the Sekisovskoye mine development. Hambledon is currently debt-free. The company’s working capital facility has been increased from $2m to $4m. Further debt will be raised and that will be secured on assets.
Hambledon is looking at other projects in north east Kazakhstan.