Growth Investor - Noventa Mentioned!Tantalum teasers
Tantalum, a hard, refractory rare metal used in alloys and electroniccapacitors, is the focus for Noventa, which, as recently foreshadowed byGrowth Company Investor, has raised nearly £7 million in 10 per centpreference shares, convertible at nearly 263p a share to upgrade itsprocessing plant and expand its operations in Mozambique. TheJersey-based company, steered by engineer and company doctor Eric Kohn,targets production at an annual rate of 600,000 lbs in the near future,with break-even in sight.
AIM-quoted Noventa, which lost £6 million last year, had been offered£11 million of loan finance but instead has tapped the market with £7million of convertible preference shares into ordinary shares at a 25per cent premium to their market price. The company, which has offtakeagreements for a major portion of its projected output, suggests £19million of capital expenditure, partly loan financed, could achievepayback by 2013 and leave it with nearly £14 million in the bank.
Noventa has three mines in Mozambique’s Zambezi province – Marropino,Morrua and Mutala – and is now producing at the rate of 50,000 lbs ayear from tailings left over from past mining operations. Kohn stressesthe benign mining policy of the Mozambique government.
He envisages cash costs of $37 a lb, against a market price for tantalumthat has risen from a $32-per-lb low to more than $130 today and islikely, he suggests, to settle down to a long-term $70 a lb. Tantalum,used in capacitors for mobile phones and a wide range of otherapplications, enjoyed a boom during the dotcom bubble before collapsing,but has recently been recovering strongly in anticipation of adeveloping world shortage.
Noventa shares have had a similar experience since floating four yearsago at 175p. They have rallied over the past year and, now 197p, couldgo further if Kohn’s plans bear fruit.
Source:
https://www.growthcompany.co.uk/features/1625438/testing-time-for-rare-earths-and-metals.thtml