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News & Tips: Shanta Gold, Burford Capital NMC Health & more

London shares are mixed
February 10, 2020

London's main indices are in circumspect mode at the start of the week. Click here for The Trader Nicole Elliott's latest thoughts on the markets. 

IC TIP UPDATES: 

Shanta Gold (SHG) has bought a million-ounce gold project in Kenya from Barrick Gold (CN:ABX) for $15.5m (£12m) in cash and shares. The company has been focused on expansion through exploration at its New Luika mine and getting the Singida project to production. The former Acacia Mining, now part of Barrick, got the West Kenya project to the resource stage, with 1.2 million ounces at 12.6 grams per tonne discovered across two deposits. The $7m cash price will come from existing reserves, the Shanta said, and the $7.5m in shares will hand Barrick  6.4 per cent of the company. The miner’s balance sheet was boosted late last year when the Tanzanian government paid back some of the $20m-plus owed in VAT refunds. Shanta’s share price was up 5 per cent on the news. Buy

Versarien (VRS) said that it expects to provide a €300,000 loan to its subsidiary Gnanomat this month in a statement this morning and continue to fund its working capital, and also confirmed that as of 31 January its cash balance stood at £1.53m, with a further £0.72m available from its banking facilities. The graphene company also confirmed that it was unaware of “any material basis” for the recent deterioration in its share price, which opened at 50p today, representing a decline of more than a third since the start of the year. Sell.

Lok’n Store (LOK) reported a 7 per cent rise in self-storage revenue during the six months to the end of January, thanks to a rise in unit occupancy. Price per let sq/ft was flat on the same time the prior year. Another store was added to the pipeline in Salford, Manchester,  where the self-storage group plans to open a 50,000 sq/ft store in autumn. Buy

KEY STORIES: 

The trading update released by Burford Capital (BUR) last Monday showed “paltry” net realized gains, “dismal” efforts to monetize claims, and again highlighted the group’s reliance on the Petersen case, according to a report from short-seller Muddy Waters out today. Separately, Invesco has reduced its stake in the litigation finance outfit.

NMC Health’s (NMC) fight back against Muddy Waters’ claims of lax reporting standards and balance sheet errors has taken a strange turn, with the Middle East-focused company revealing uncertainty over how many shares its founder and chairman BR Shetty owns. NMC said Dr Shetty had informed the company he was doing a review of his shareholdings, and early findings suggest “the the holdings and interests of Dr. B.R. Shetty, [fellow major shareholders] H.E. Mr Saeed Mohamed Butti Mohamed Khalfan Al Qebaisi and Mr Khaleefa Butti Omair Yousif Ahmed Al Muhairi have been incorrectly reported historically to the company and the market”. NMC said a holding company with 20m shares could actually belong to Mr Al Qebaisi and Mr Al Muhairi, not Dr Shetty. The company also said it had been in early talks about a takeover with Kohlberg Kravis Roberts & Co and GK Investment Holding Group SA. 

Intu (INTU) confirmed press speculation with that it was in discussion with shareholders, including the Peel Group, and new investors such as Link Real Estate Investment Trust, regarding its proposed equity raise, details of which will be revealed alongside the beleaguered retail landlord’s full-year results at the end of February.

Workspace (WKP) has appointed David Benson as chief financial officer, taking up the role on 1 April. Mr Benson is currently corporate finance director of Whitbread (WTB) and prior to that held senior finance roles at Kier (KIE) and Keller (KLR). 

Urban Logistics (SHED) has proposed a placing to raise £100m and an open offer and offer for subscription to raise up to £6.7m, each at a price of 137.5p per share. The industrial property group expects to use the net proceeds to acquire an attractive pipeline of logistics properties. The company also announced it plans to declare a special dividend of 3.85p a sharein respect of the financial year ending 31 March 2020, which will bring the total dividends issued in respect of the 2020 financial year to 7.60p a share.