0 Tim Boreham
Criterion Columnist
Melbourne https://plus.google.com/116956110402704936193 Source: TheAustralian Harvest Minerals (HMI) 2.5c
The Brazilian-centric dining-to-mining theme was a pearler for us last time around, so let’s give it another whirl.
Shares in potash hopeful Aguia Resources (AGR) have more than doubled since late April, when we cited the stock as a poor man’s version of runaway Spanish developer Highfield Resources (HFR).
Now we have Harvest, formerly the tin-hunting Avenue Resources. Like Aguia, Harvest is focused on the Samba-loving nation, albeit in the northeast rather than the south.
Harvest yesterday reported an inaugural resource for its fully owned Sergi project, in the state of Sergipe. It immodestly describes the result — 62 million inferred tonnes grading 13.5 per cent — as “exceptional”.
Sergi is next to Brazil’s only producing potash mine, Vale’s Taquari-Vassouras, and is proximate to an operating plant.
The results are based on eight historic drill holes, five drilled between 1967 and 1991 and three between 2011 and 2014.
The next step, you guessed it, is a drilling program to convert the inferred estimate to a more certain indicated status. An Aim listing in Britain also beckons.
As a not exactly like-for-like comparison, Aguia’s resource at its Tres Estradas project stands at 70mt, inferred and indicated with an average grade of 4.2 per cent.
With a full bankable study due by the end of December, Tres Estradas has been costed at less than $250 million.
Suffice to say Aguia (market cap $40m) is more advanced than Harvest, which has $1.5m of cash and could do with some more.
Harvest shares climbed 0.3c, or 13 per cent, after a trading halt was lifted yesterday. Aguia and Harvest are spec buys, the big picture being Brazil’s need to import 90 per cent of its potash for its vast farming acreages.
“Harvest has the right product in the right place at the right time,’’ says exec chair Brian McMaster. Fortescue Metals (FMG) $1.645
Fortescue’s quarterly disclosure shows the pure-play iron ore miner will remain profitable on its forecast current-year output of 165 million tonnes — but with little wriggle room.
Fortescue also met 2014-15 guidance of 165mt and posted a strong June quarter of 42mt, up 19 per cent. That number was also ahead of market expectation and, really, there should be an inquiry as to why.
For the current year, Fortescue estimates an “all in” production cost of $US39 per dry metric tonne, which factors in interest and sustaining capital, as well as the dollar at US77c and a discount applied for the higher moisture content.
Fortescue cites signs of a recovery in steel prices, driven by residential property development in the main Chinese cities.
How did investors react? Shares were Forte-skewered 6 per cent to a record low, of course.
Criterion last rated Fortescue a sell at $1.83 in late April.
We accept that management is moving the right way with cost-cutting and balance-sheet repair, but maintain the call. Digital marches on
The stampede of backdoor tech listings with Asian-focused mobile commerce themes shows few signs of abating, despite generally poor share performance. The latest, the Singapore-based Sprooki, is employing the shell of Stanfield Funds Management (SFN, 24c), the erstwhile vehicle for failed Melbourne corporate raider Darren Olney-Fraser.
Founded by two ex-Fairfax Digital execs Claire Mula and Michael Gethen, Sprooki is a tool for mall-based retailers to engage with customers, such as with discounted coupon offers when they are nearby the relevant shop.
Sprooki claims a footprint of 3500 stores across 70 malls, with clients including Singaporean property developer Far East Asia Organisation, Lend Lease Asia Pacific, Payless, Old Navy, Zara, Marks & Spencer and Samsonite.
The Stanfield deal involves acquiring all of Sprooki’s capital from the founders and an angel investor, in return for 20 million Stanfield shares and 20 million performance shares. Stanfield also must raise a minimum $2.7m, at 35c apiece. Assuming the milestones are met, Stanfield would have a base of 84 million shares for a market cap of $29m.
Tech plays so far to migrate from the Lion City to the ASX include the Victor-Smorgon backed digital marketer Asia Pacific Digital (DIG), social media platformMigme (MIG) and incubator Fatfish (FFG). Netccentric (NCL), an intermediary between bloggers and advertises), listed this month after raising $12.5m.
Locally, Skyfii (SKF) spruiks a not dissimilar model of harvesting customer data via free WiFi.
Another cloud-based mobile marketing mob, Otherlevels (OLV) listed on March 31, after raising $7.5m.
Sadly, they’re under par as well.
As for Sprooki, take no action ahead of next month’s prospectus.
The Australian accepts no responsibility for stock recommendations. Readers should contact a licensed financial adviser. The author does not own any of the stocks mentioned.
HMI Price at posting:
2.2¢ Sentiment: Buy Disclosure: Held
