2 Jul 2008 07:00
Chairman's update for shareholders - July 2008
Investment performance
The past three months have proved to be more challenging than the three previous quarters with a further decline in the net asset value of £1m or 8.7%.
There has been speculation that the crises impacting the financial markets would lead to world-wide recession with a consequential reduction in demand for natural resources and services. In addition, a recent Financial Times article suggested that many private investors, to whom small-cap resource companies look for support, have become more cautious in their outlook and investing habits citing actual and anticipated inflation as a key reason. Against this background many of the companies in which Starvest is invested have seen their share prices fall during the past year.
It is fact that as resource stocks have risen strongly in the past eighteen months many investors will have taken substantial profits. It is the view of the Starvest board that demand for raw materials is unlikely to diminish in the foreseeable future; on the contrary, all the evidence suggests that commodity prices will remain high as China, India and other fast developing nations expand their voracious appetite for scarce commodity resources.
To the extent that cash resources are available, Starvest will continue to seize opportunities to make further investments. During the June quarter, further investments were made in Greatland Gold plc and Kefi Minerals plc.
Company statistics
| 30 June 2008 | Change since 30 June 2007 | 30 September 2007 | 30 June 2007 | |
| Portfolio net asset value | £10.5m | -45% | £15.1m | £19.2m |
| Net asset value - basic per share | 30.17p | -43% | 42.89p | 53.11p |
| Net asset value - fully diluted per share | 27.46p | -42% | 38.45p | 47.43p |
| Share price | 17.75p | -44% | 29.75p | 31.75p |
| Share price discount to fully diluted net asset value | 35.35% | +2.35 points | 22.63% | 33% |
| Market capitalisation | £6.2m | -46% | £10.46m | £11.5m |
With two exceptions, the net asset values are based on mid-market closing prices on Monday 30 June 2008. As a matter of prudence, two investments have been valued at less than current market value.
Conclusion:
The Board continues to be pleased with the investments now held and to expect exciting growth in the medium term. More than one investee company is expected to make positive announcements in the near term leading to a substantial re-rating which will have the effect of increasing Starvest's net asset value.
The Company now holds trade investments in the following companies:
Addworth plc - Active capital investment company - www.addworth.co.uk
Agricola Resources plc - Platinum and uranium exploration - www.agricolaresources.com
Alba Mineral Resources plc - Portfolio of mineral exploration interests - www.albamineralresources.com
Ariana Resources plc - Gold exploration in Turkey - www.arianaresources.com
Belmore Resources (Holdings) plc - Zinc exploration in Ireland - www.belmoreresources.com
Beowulf Mining plc - Gold and copper exploration in Sweden - www.beowulfmining.com
Black Rock Oil & Gas plc - Oil and gas in Southern England, Columbia - www.blackrockpertroleum.com.au
Brazilian Diamonds Limited - Diamond exploration in Brazil - www.braziliandiamonds.com
CAP Energy plc - Oil and gas in North America - www.capenergy.co.uk
Carpathian Resources Limited - Oil and gas in the Czech and Slovak Republics - www.carpathian.com.au
Concorde Oil & Gas plc - Operational oil & gas projects in the Russian Federation - www.concordeoilandgas.com
The Core Business plc - Personal care and beauty products - www.thecorebusiness.co.uk
DTT plc - driver training and recruitment services to the road haulage industry - www.drivertransporttraining.co.uk
Equity Resources plc, formerly Franchise Investment Strategies plc - Investment company
Franconia Minerals Corporation - North American minerals - www.franconiaminerals.com
Fundy Minerals Limited - Gold and base metal exploration in Canada and West Africa - www.fundyminerals.com
Gippsland Limited - Tantalum exploration in Egypt - www.gippslandltd.com.au
Goliath Resources Inc. - Copper, gold and molybdenum in Canada and Zambia - www.goliathresources.com
Greatland Gold Limited - Gold exploration in Western Australia and Tasmania - www.greatlandgold.com
Guild Acquisitions plc - Fledgling investment company
Hidefield Gold plc - Gold exploration in North and South America - www.hidefield.co.uk
India Star Energy plc - Gold, platinum group metals and uranium - www.indiastarenergy.co.uk
Kefi Minerals plc - Mineral exploration in Turkey - www.kefi-minerals.com
Lisungwe plc - Nickel and other minerals in Malawi - www.lisungwe.com
Lotus Resources plc - Mineral exploration in China - www.lotus-resources.com
Matisse Holdings plc - Cash shell
Myhome International plc - Home services franchiser - www.myhomeplc.com
Oracle Coalfields plc - Coal in Pakistan - www.oraclecoalfields.com
Red Rock Resources plc - Iron ore and manganese exploration in Australia and Zambia. - rrrplc.com
Regency Mines plc - Copper & nickel exploration in Australia and Papua New Guinea - www.regency-mines.com
Sheba Exploration (UK) plc - Gold exploration in Ethiopia - www.shebagold.com
St Helen's Capital plc - Corporate finance advisor - www.sthelenscapital.co.uk
Sunrise Diamonds plc - Diamond exploration in Finland - www.sunrisediamonds.com
Treslow Limited - Copper-nickel in Canada
Shareholders who wish to receive electronic copies of announcements are invited to register their email address on the home page of the Company website: www.starvest.co.uk.
| R Bruce Rowan Chairman & Chief Executive 2 July 2008 |
Enquiries to:
Bruce Rowan, Chairman 020 7486 3997 or John Watkins, Finance Director 01483 771992; john@starvest.co.uk
Gerry Beaney or Colin Aaronson Grant Thornton Corporate Finance 020 7383 5100