Proactive article #19 Jul 2019 16:22
For old stagers in the mining industry who remember the late Bob Young, the continuing rise of Beowulf Mining looks very much like the triumph of hope over experience.
For a while Bob was touted as the best geologist in London until wags pointed out that being a good geologist in the Smoke was of no use at all to shareholders. Where the good geos were actually wanted was out in the field.
Still, Bob was well-liked and Beowulf Mining became a fixture on the mining scene with its ramshackle collection of projects, its periodic dilutionary raises and its connections to another great stalwart of the old days, Bruce Rowan.
Could anyone have foreseen that it would actually become one of the great survivors where mightier challengers like Northland Resources fell by the wayside?
The answer, given Bob’s bumbling promotional efforts, would have been an emphatic no.
And yet as we speak, Beowulf Mining is now capitalised at a handsome £39mln. True, it has still yet to produce a single tonne of iron ore or ounce of gold and its major project in Sweden is still mired in permitting confusion.
But the salient point remains.
With a £39mln market capitalisation Beowulf has confounded expectations and significantly outperformed peers.
Indeed, it’s worth two and half times as much as Condor Gold (LON:CNR), another company born in the same era, which has also continuously been funded by dilutionary raises.
It’s worth more than five times as much another peer from the mid-2000s, Firestone Diamonds (LON:FDI), which has lately been hit by weak diamond prices.
Okay, it’s perhaps not that instructive to compare this old iron ore stager to junior gold or diamond miners, but the weird and wonderful truth is that none of its iron ore peers have survived to endure the comparison.
Gone are the likes of Northland, Bellzone, African Minerals, Afferro, West African Minerals, IMIC and London Mining.
Ferrum Crescent has moved out of iron ore to focus on Spanish zinc, and Ironveld (LON:IRON) isn’t actually involved in iron ore at all. By-the-by, Beowulf is worth more than six times the value of both of these companies put together.
True, Zanaga Iron Ore (LON:ZIOC) is still knocking around, but that was a relative latecomer to the party, having only listed in 2011.
And guess what? – although Zanaga raised £62mln on listing and was capitalised at over £430mln on its first day of dealings, yes, you’ve got it - with a market capitalisation of just £32mln, it is now worth less than Beowulf Mining.
What accounts for this strange anomaly?
It would be tempting to argue that Beowulf’s resilience and indeed renaissance is down to the remarkable bounce that iron ore prices have lately enjoyed following VALE’s catastrophes in Brazil and supply constraints out of Australia. That surely is part of the story.