Joel’s Resource Report – Gemstones back on AIM #TSG #EUA #GEM

Joel’s Resource Report – Gemstones back on AIM #TSG #EUA #GEM

Another week’s flown by and news was light. That being said, there were a few highlights.

Tran-Siberian Gold (TSG) – golden tip or junk?

This is an AIM-listed Russian Gold miner with assets in the far east of Russia. This week they announced a JORC compliant mineral resource estimate for their Rodnikova Gold Desposit in Kamchatka, Russia. I covered Tran-Siberian Gold recently and believe that it’s a slam dunk sell – premium members can read my article here.

Shortly after I covered TSG, Investors Chronicle put out a buy recommendation. Given the company’s illiquidity, this provided a nice 20% bump in share price..

Eurasia Mining (EUA) – halted ascent

Eurasia Mining is an AIM listed mining company with platinum group metal projects in Russia. One of those projects potentially contains millions of ounces of palladium. Eurasia Mining’s share price has gone off like a rocket since I last covered the company for this website. Since then, the palladium price has continued its meteoric ascent.

 (Source: Tradingview)

The dramatic increase in the palladium price increases the value of the company’s primary asset which is currently up for sale with the help of a Chinese and a Russian bank. Eurasia’s shares were  suddenly suspended, with a statement that the company would provide clarification of its relationship with the aforementioned Chinese bank.

Gemfields (GEM) – back from the dead

Gemfields is an AIM-listed gemstone mining company which I held shares in years ago. The tag line was that they would do for gemstones what De Beers did for diamonds!

I love gemstones and the business model – why shouldn’t a woman (or man) wear gemstones in the West? I actually wear a Rhodolite (a type of garnet) from Zambia.

And if you read the FT, you might’ve seen some Gemfields adverts. Gemfields also owns the Faberge brand which produces jewellery and watches:

Gemfields was forcibly de-listed from AIM in 2017 by its largest shareholder, Pallinghurst. I’d describe it as a takeunder rather takeover given the discount to market price that Pallinghurst paid. From memory, Pallinghurst already owned nearly 50% of the shares.

I was somewhat shocked to see an RNS on Friday that Gemfields had started training on AIM. Pallinghurst (unwittingly I suspect) did shareholders a favour as the enlarged group hasn’t exactly thrived in South Africa (this is from the latest presentation on the website:

(Source: Gemfields)

Also see this chart (there’s a typo in the effective date – a mini red flag!):

(Source: Gemfields)

Shareholder Register – no risk of another takeover/takeunder?

Given Gemfield’s prior forcible de-listing, the following data should reassure that a repeat is less likely:

(Source: Gemfields)

Revenues & assets

If you’re interested in Gemfields, take a look at the latest presentation here. This is probably the most useful slide:

(source: gemfields)

Despite that I previously invested and made some quick profits in it, the company is now very unappealing to me. It trades on a P/E of >10, has lumpy sales, fluctuating prices and uncertain production. At a much cheaper P/E, I’d think about it, but I’ll be steering clear for now. At least the market cap at £150 million is supported by net cash of $35 million as of June.

I’ll always be a huge fan of gemstones and products that Gemfields produce but that doesn’t mean I need to own the shares!

Till next week!

 

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