TIDMPRIM
RNS Number : 9169V
Primorus Investments PLC
12 August 2020
Primorus Investments plc
("Primorus" or the "Company")
Quarterly Investor Update
Primorus Investments plc (AIM: PRIM, AQSE: PRIM) is pleased to
provide the quarter ending 30 June 2020 ("Q2" or the "Quarter")
investor update regarding its current holdings as per its investing
policy.
Executive Director's Quarterly Comment - Alastair Clayton
We still find ourselves in unprecedented times with the effects
of COVID-19 reverberating around the globe and the long-term
effects on the economies of the world are still unclear. We have,
however, seen the gold price breach US$2,000/oz in the post-Quarter
period and a continued surge in values of many of the large
technology companies, as global consumer and work practices react
and evolve to the changing social and business environment.
Against this backdrop, the Company has once again had a
successful Quarter in terms of both growing its portfolio and
realising some significant gains. We continue to believe there is a
great amount of unrecognised value in the portfolio and see
significant short, and medium, term opportunities to realise
further gains from our investments.
Highlights
-- Greatland Gold Plc share price up over 155% for the Quarter
and 640% year to end Q2 (618% since investment). Further positive
drill results from Havieron reported by Newcrest Mining
("Newcrest").
-- Completed a programme of sales of a total of 10,500,000
Greatland shares for gross proceeds of approximately GBP1,030,000
and retains a holding of 26,000,000 Greatland shares with a cost of
carry of zero pence per share and a mark-to-market value of circa
GBP3.5 million.
-- TruSpine Technologies ("TruSpine") releases its Intention to
Float announcement for its upcoming IPO on the Aquis Stock Exchange
Growth Market ("Aquis"). TruSpine will, upon admission, trade under
the ticker TSP and intends to raise up to GBP1.5 million by way of
a subscription and is expected to have a market capitalisation on
admission of approximately GBP31.5 million.
-- Fresho, at request of suppliers, launched "Fresho for home
delivery" and signed up over 60,000 customers in first few months.
An exciting new B2C business is evolving to complement current B2B
business.
-- SOA Energy advises that drill plan permits and contracts for
the Ofek drilling are in place. Actual drilling commencement is now
reliant on a re-opening of the international borders, such that
contractors and suppliers can enter Israel to undertake the work.
Best estimation of revised well spud is therefore September, but
this is subject to Government policy in light of the current
COVID-19 pandemic.
-- Potential further investment of GBP250,000 into Engage via a
provisionally approved Government-matched Convertible Loan Note as
part of wider circa GBP4.3 million fundraise to accelerate growth
and carry the business through to a cashflow positive position.
-- The Company finished the Quarter debt-free and the Board
still foresees no short to medium term need or intention to raise
capital.
Update on Investments
Greatland Gold Plc ("Greatland") (AIM: GGP)
Greatland began the Quarter at 4.7p and closed on June 30 at 12p
representing a Quarterly increase of approximately 155%. At the
time of writing the share price was 1 3.6p representing an
investment gain to date of over 714%.
Since our last Quarterly update, the Havieron Joint Venture has
reported further positive drill results (refer to announcements
released by Greatland on 30 April 2020 and 11 June 2020).
Furthermore, (post-period) a mining licence has been applied for,
covering the Joint Venture Area, and Newcrest drilling has begun to
extend the bounds of known mineralisation by some 220m to the north
west and remains open in several directions. This success in
growing the mineralised footprint at Havieron chimes well with our
earlier interpretation of the overall potential of a wider Havieron
area to host additional significant mineralised areas.
As announced on 16 June 2020, the Company completed a staged
sale programme of some of our holdings in Greatland. Overall this
comprised some 10,500,000 shares and grossed circa GBP1,030,000 in
proceeds. This represents a significant pre-tax gross return on our
total investment outlay of circa GBP625,000 made back in 2018.
We retain 26,000,000 shares in Greatland Gold that, as a result
of the share sale, have a cost of carry of zero pence per share and
mark-to-market value at the time of writing of circa GBP3. 5
million which equates to approximately 73% of our current market
capitalisation.
TruSpine Technologies ("TruSpine")
The news from TruSpine Technologies ("TruSpine") is also very
encouraging, with a recent Intention to Float announcement
regarding the company's move to list on the Aquis Stock Exchange
Growth Market announced on 31 July 2020. Shareholders may recall
that, despite significant interest over the past few years, a
natural strategic investor had not materialised until recently.
Following her investment, Ms Annabel Schild has agreed to be
appointed to the board as a non-executive director as part of the
TruSpine IPO. The Schild family sold Huntleigh PLC (a healthcare
business) for GBP409 million in 2006.
Primorus invested some GBP500,000 in TruSpine at a price of
GBP0.30 per share. We understand that IPO capital is expected to be
raised at GBP0.36 per share, which would be a very welcome 20%
premium to our investment price. Whilst this may not represent a
multiple on investment that we have been able to generate
elsewhere, we still believe this is a great result given recent
global events and time taken to secure a cornerstone investor.
Pleasingly, TruSpine is seeking to obtain regulatory clearance
from the US Food and Drug Administration ("FDA") for its Cervi-LOK
product in Q1 2021 and will subsequently seek clearance for
Faci-LOK and GRASP Laminoplasty.
We intend to be patient and longer-term investors in TruSpine as
we have a fundamental belief in the team and the products.
We also note this is the first of our private investments to
float on the public markets and we hope that more will follow suit
in the future.
Fresho
Fresho reported that it is returning to "business as usual" with
B2B volumes picking up significantly. The B2C business continues to
grow with 60,000 consumers onboard. The two businesses complement
each other well and open up a database of over 100,000 users. Given
it is well funded, having raised $7m towards the end of last year,
we hope that opportunities may start to present themselves as
competitors struggle for sustaining capital. Fresho continues to
build out its technology to improve its fresh food technology
services. Fresho reports that wholesale customer sales continue
apace with many businesses taking advantage of this change in
consumer behaviour to make the move online.
Whilst the overall business has no doubt been impacted by venue
closures associated with COVID-19, the development of a B2C
business has been very welcome. Given its strong cash balance, we
view Fresho as being well positioned to press home technological
advantages and capture customers as alternative offerings
falter.
Engage Technology Partners ("Engage")
Engage is a key investment for us and we are delighted to report
that, subject to final Government confirmation, we have agreed to
invest GBP250,000 in Engage. Primorus will make the investment via
a Convertible Loan Note ("CLN") yielding a coupon of 10% p.a. and
providing for repayment and / or conversion at a 20% discount to
the next funding round or IPO. Along with other investors, and a
pound for pound matching investment by the UK Government's Future
Funding Programme (that has been provisionally approved already by
the Government and is in the process of financially closing) just
under GBP3.89 million in loan notes will be issued. Alongside this
an additional GBP408,000 in straight equity at GBP22 per share has
been raised by Engage.
The total of this funding round at circa GBP4.3 million should
provide Engage with not only adequate funds to reach projected
breakeven but will allow for accelerated workstreams to potentially
bring this forward and pursue other complimentary opportunities on
top of the core business.
We expect the CLN issue to close soon and once this has
occurred, we will provide a further operational update but, given
the COVID-19 impacts upon physical business operations and
processes, we remain very excited on the outlook for Engage as the
need for its zero-contact, end to end industry solutions becomes
more apparent.
SOA Energy ("SOA")
We previously reported that SOA Energy advised shareholders that
drill plans at the Ofek oil discovery remained on time, with the
spud date originally expected to be in May 2020. With the Israeli
Government closing borders to combat COVID-19, we now have been
informed that despite all elements being in place (rig, contractor,
permits etc.) to commence operations, they cannot start until the
boarder is opened to foreign operators. SOA remains hopeful that
key staff will be allowed to enter the country to complete the
drill programme in September 2020. We will monitor updates as they
occur.
Elsewhere across our portfolio, we are expecting a business
update from Zuuse soon, WeShop has yet to report movement on their
funding solution and Sport:80 reported a good financial performance
(as evidenced by their latest filings) over the past 6 months but
is no closer to a liquidity event for us as shareholders. Nomad
Energy remains in dispute with the Ivorian Government and the
recent death of the Prime Minister has, according to the Nomad
management, only made an opaque situation less transparent. We
welcome any outcome that could lead to us recouping our
investment.
Summary
The message to our shareholders remains essentially the same as
last quarter and is that, despite the tumultuous events of recent
months, our principal listed investment has had an excellent
performance and this has continued into the current period. Most
notably, our decision to position the portfolio meaningfully toward
gold exposure has so far delivered pleasing rewards. Many of our
core investments in the technology space, whilst losing some
ground, are, we believe, well-placed to benefit in a post-COVID-19
world. We consider that these companies are at the forefront of
business process change and expect that, following on from recent
capital raising activities, they require little or no additional
capital. We feel that Primorus is in a strong position and we look
forward to another successful quarter ahead. The Board still sees
no requirement to raise any capital in the short to medium term and
would like to thank shareholders for their continued support.
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Forward Looking Statements
This announcement contains forward-looking statements relating
to expected or anticipated future events and anticipated results
that are forward-looking in nature and, as a result, are subject to
certain risks and uncertainties, such as general economic, market
and business conditions, competition for qualified staff, the
regulatory process and actions, technical issues, new legislation,
uncertainties resulting from potential delays or changes in plans,
uncertainties resulting from working in a new political
jurisdiction, uncertainties regarding the results of exploration,
uncertainties regarding the timing and granting of prospecting
rights, uncertainties regarding the Company's ability to execute
and implement future plans, and the occurrence of unexpected
events. Actual results achieved may vary from the information
provided herein as a result of numerous known and unknown risks and
uncertainties and other factors.
For further information, please contact:
Primorus Investments plc: +44 (0) 20 7440 0640
Alastair Clayton
Nominated Adviser: +44 (0) 20 7213 0880
Cairn Financial Advisers LLP
James Caithie / Sandy Jamieson
Broker: +44 (0) 20 3657 0050
Turner Pope Investments
Andy Thacker / Zoe Alexander
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END
UPDMZGMRRZKGGZG
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August 12, 2020 04:19 ET (08:19 GMT)
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