Mineral & Fin Regulatory News (MAFL)

MINERAL & FINANCIAL INVESTMENTS LIMITED

("Mineral & Financial", "MAFL", or the "Company")

NET ASSET VALUE UPDATE

MAFL, the AIM quoted resources investment specialist, today announces an NAV and operations update on its activities for the period ended 31 March 2015.

Highlights:

• Net assets of £1.32 million, or 9.63p per share (unaudited) 

• Cautious approach maintained in tough markets

• Commodity investments continue to perform well 

• Continue to hold Glencore for medium term on basis copper will recover

• Plans to divest legacy investments remain in place

• Total cash at period end: £663,000, or 4.83p per share

Post period end:

• Evaluation of assets for strategic acquisitions continues

• Analysis of potential first strategic asset acquisition in advanced stages

Chairman's Statement:

Since our last NAV update we believe markets have continued to be relatively immune from wider economic issues. The Greek situation remains unresolved, however most observers - save the Greek ones - appear, in our opinion, to be sanguine about Greece either defaulting and/or exiting the Euro. Additionally, we believe the US markets are confronted with a classic "damned if they do, and damned if they don't" scenario. The view that we see as being more popular is that US rates will rise sometime in the next 3 to 4 months. The real possibility is that US economic performance may be insufficient to prompt the Fed to increase rates. Neither will, to our minds, be encouraging to equity markets.

US interest rates are the foundation of most of the world's bond markets, so a rise in US rates would impact world bond markets. As much as the world wishes to believe that equity yields will support equity markets through a rise in rates, we do not support this view. In brief we remain cautious on equity markets.

Nevertheless, we believe that the foundations for a revival in mining markets are being put in place. There is positive demand growth for most metals, and flat - to declining production of most metals. We believe the strong US dollar has blurred the improvements occurring in the commodity markets. This strong dollar has exerted pressure on USD commodity prices generally, and was an important cause for the slight weakening of our NAV in the period. Using as a proxy for the US dollar the DXY index, J.P. Morgan's trade weighted US dollar index, the US dollar rose from its trough of 79.06 in May of 2014 to a high of 100.33 March 2015 (+26.9%). We believe this is extraordinary volatility for what remains the world's "reserve" currency, and is perhaps telling of increasing market risk. From a mining industry standpoint, as for most commodities, the price of commodities is fixed in US Dollars. However, in currencies other than the USD the performance of metals prices has been good, and in some cases very good.

In the table below commodity prices have been taken at the DXY's 12 month high, low and current levels and the impact of the DXY/USD 'adjusted' to exclude its impact. To use gold as an example, the price of gold in USD declined 8.0% from $1,310/oz. to $1,205/oz. However, on trade-weighted basis when buying gold in Yen, Euros, or Rupees, the price of gold was up 11.7%.

There continues, in our opinion, to be a very serious lack of capital in the market place for junior resource companies. We also believe this is creating a scenario, which will result in insufficient new capacity coming on stream in many metal commodities within the next few years.

For example, according to Glencore global demand for zinc has risen by 3.7% YoY between 2012 & 2014, and Glencore should know - it's the world's largest producer and supplier. This growth translates into incremental demand of 550,000 tonnes to 600,000 tonnes of new zinc demand annually. Furthermore, Glencore believes there will be approximately 3 million tonnes of zinc concentrates needed over the next 5 years. In that period only 600,000 tonnes to 650,000 tonnes of net new supply is expected from non-Chinese producers.

In the short term, zinc has seen its LME inventories drop by 60% to about 475,000 tonnes in the past 2.5 years. LME inventories now represent less than 3 weeks of global demand. The point we wish to make is that zinc, as many other metals, has been severely afflicted by a shortage of capital, resulting in an insufficient pipeline of projects to satisfy global demand.

We continue to review possible strategic investment opportunities. We continue to be disciplined and prudent in our search for suitable investment opportunities for our shareholders.

Jacques Vaillancourt

Executive Chairman

Chief Investment Officer's Statement

Although it's disappointing that the Company's Net Asset Value has suffered a modest decline over the most recent quarter, the Company continued to benefit from the prudent approach adopted in response to the tough markets in mining and commodities and our overall cash position rose from £596,000 at the end of December to £663,000 at the end of March.

Our primary interest in these times of constrained liquidity and weak share prices remains in the larger, cash generative companies like Glencore, and in specific commodities themselves. Our commodity portfolio now consists of positions in gold, platinum, rhodium, uranium and zinc. We continue to believe that the longer-term outlook for gold is positive, as uncertainties about the global economy remain, structural problems remain endemic in several jurisdictions, and fiat currencies continue to look vulnerable to external shock.

Having said that, the rising strength of the dollar is now of primary importance in commodities markets, and has had in the immediate term some negative impact, not least on our own portfolio. Nonetheless, our gold, zinc positions and rhodium are still showing gains, while the uranium position has declined modestly in value, and our platinum position, in line with the performance of the wider platinum group metals sector, is somewhat weaker.

During the period we continued our efforts to divest our remaining non-core legacy holdings, and these efforts will continue. We retain a small interest in Tern PLC, following the sale of the majority of our holding at the end of last year and the beginning of this year. Although the value of our Tern stake has declined in value somewhat since that transaction, we continue to watch developments there with interest.

Finally, we are excited by the prospects of ISDX-traded Cap Energy, which continues to explore the possibility of listing on a more major exchange soon. The value of Cap Energy declined modestly over the period, but we are confident that ongoing work offshore Guinea-Bissau and Senegal will deliver interesting results.

Alastair Ford

Chief Investment Officer

For more information:

Katy Mitchell, WH Ireland +44 161 832 2174

Laurence Read, Director +44 20 3289 9923

Notes: The net asset value calculation is subject to audit and is made on the basis that the Company has 13,722,062 shares in issue. All listed investments, including investments on ISDX, are valued at the closing bid price as at 31 March 2015. The Company has an investment in one unquoted gold Company, which is currently valued at the price at which the gold Company in question last raised money, although this is subject to review.