Gunsynd's natural resources portfolio shows resilience in H1 amid market headwinds
() a holding company with a focus on natural resources, issued a trading update and review of investments covering the 6-month period to January 31, 2024.
Gynsynd noted a number of milestones achieved by its portfolio companies during the half year. Aberdeen Minerals raised £5.5m in March 2024 at 8.5p (premium to 's investment at 7.5p) to fund exploration of Ni/Cu/Co in Norteast Scotland. holds 2m shares purchased for £150k. also invested c. £200k in 1911 Gold, a Manitoba-based gold explorer.
Rincon Resources, where holds a 1.8% stake, reported positive assay results for rare earth elements and copper at West Arunta, Australia. At South Telfer, over 3.5km of drilling were completed, confirming a significant gold system. Eagle Mountain Mining with copper projects in Arizona, boosted production as a result of an upgrade to the mineral resource estimate of its Oracle Ridge asset to 28.2mt at 1.35% Cu, 11.06g/t Ag and 0.16g/t Au with 54% in the measured and indicated categories. has a 1% stake in Eagle.
Omega Oil and Gas announced a maiden 2C gross resource of 1.73 TCF and 3C contingent resource of 4.5 TCF across its wholly owned assets in Queensland, Australia. Net 2C contingent resources comprise 1.51 TCF gas and 68.6 mmbbls of condensate. has invested £50k so far. Also in Australia, Charger Metals reported positive results from its Lake Johnston lithium project, with $3m budgeted for exploration, as well as 20 prospects identified at Bynoe lithium project in the Northern Territory. holds a 1.1% stake in Charger.
Australia-based Pacific Nickel completed the first DSO shipment from its Kolosori Nickel project with an initial payment received from offtake partner Glencore International AG. Two 60k ton bulk carriers were loaded in February and March at an average grade of 1.65% Ni. Pacific is now focused on ramp up to full production of 1.5 mtpa, expected by May 2024.
Gunsynd has a farm-in agreement with Metals On for the Black Schist Ni-Zn-Cu-Co projects in Finland, analogous to the large nearby Talvivaara mine. has paid £250k to receive a 6.25% stake in Finnhaust, which holds the projects. In February, Metals One announced significant intersections of mineralised black schists in all exploratory drillholes with strong potential for future resource expansion. Metals One is targeting a 200 mt resource in the Paltamo area.
Outside of natural resources, Low6, a B2B pool betting platform for professional sports, continued to build revenue and has traded profitably for the current FY from July 2023. The company forecast revenues of £4.5m for FY24, which it is on track to surpass. This compares to revenues of £855k for FY22. has invested £250k to date. Rogue Baron, a holding company focused on premium spirits announced a US$1m investment by a US-based investor into its wholly owned US subsidiary Shinju Spirits. has a 16.9% stake in Rogue Baron.
Financially, reported a slightly higher loss during the period of £621k from £576k LY as active investment continued. Market valuation on investments was £369k from £305k LY. Net assets were £1.735m, including £113k in cash.
View from Vox
Overall, Gunsynd saw significant operational progress across its portfolio during the half, albeit not yet reflected in valuations. The company maintains a level of diversification, but is mainly committed to natural resources, and particularly critical metals that are key to the global transition to net zero. In the medium to long term, this strategy should pay off as interest rates ease, likely followed by a weakening of USD, both of which should benefit commodities. Signs of this are already evident in recent positive price movements of gold and copper.
Therefore, we see the lack of financial progress during the half as a temporary setback attributed to the macro environment and early exploration cycle of many of 's investments. However, as most are reporting significant discoveries and production ramp-ups, and as demand for batteries and renewable energy tech continues to increase, so will demand for associated critical commodities where has significant investments. The Black Schist Ni-Zn-Cu-Co project in Finland is particularly exciting, with early results reported by Metals One indicating the asset can match the output of the nearby Talvivaara mine, one of Europe's largest Ni-Zn-Cu-Co producers.
Outside of Gunsynd's natural resources portfolio, recent announcements from Low6 and Rogue Baron are highly encouraging. Low6 is building strong momentum and is on track to surpass guidance. And Rogue Baron's institutional fundraise was completed at a substantial premium. Other notable positives from the portfolio are 1911 Gold's strong share price performance and Aberdeen Minerals' recent fundraise at 13.3% premium to 's investment price.
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