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Thursday, 23 May 2013
UPDATE: Afferro Mining results underline its strong financial position
--ADDS SHARE PRICE AND BROKER COMMENT---
The release of Afferro Mining’s (LON:AFF) (CVE:AFF) quarterly results underlined its strong financial position.
However, the stock succumbed to a bout of profit-taking in the morning session to trade at a modest discount to the cash element of a putative bid from International Mining & Infrastructure (LON:IMIC).
Brokers described as “largely historic” the figures to the end of March, which showed the group had cash and short-term investments of US$84mln and posted a loss from operations of just over US$1mln.
The company, which owns the 2.5bn tonne Nkout iron ore project in Cameroon, on Wednesday said it was backing an “in-principle” offer from IMIC that vales the group at US$190mln (£126mln), or 120 pence a share.
Currently, the shares are changing hands for 76 pence a share, or 4 pence below the cash element of IMIC’s offer. TheAIM-listed Africa-focused infrastructure group is also offering a loan note worth a further 40 pence a share.
“This quarterly update is largely historic in the context of the agreement between IMIC and Afferro management to proceed with the revised offer from IMIC,” said City broker SP Angel.