Investment Matters

Company News: NSL Consolidated Ltd, HT&E and Moreton Resources

The big news for clients’ portfolios this week were the (First Samuel supported) capital raise by NSL Consolidated Ltd (NSL) to move to a third phase of its expansion of its Kurnool, India benefaction plant (from 200,000 tonnes pa to 400,000 tonnes pa). NSL has now delivered a stable (and rising) production from Kurnool phase 2, and cash flow positive.  Due to the longer term growth opportunity (the Andhra Pradesh government would like to see NSL move to 8mtpa ASAP) the company elected to move straight to stage 3 (hence requiring more equity). In addition to the capital raise the company has announced a share consolidation, and a pending name change to reflect the now production status it has achieved.  This follows from the appointment a new Non-Executive Director (Raymond Betros) in April, and now signals the company is ready to make a positive charge at the next stage of its somewhat renewed life.

Here, There and Everywhere (HT&E) responded to media speculation that a potential takeover bid was pending. The Australian reported that it believed several parties have been working together to potentially jointly take over the business and separate its two key assets (Radio and Outdoor advertising).  HT&E noted it is not aware of a bid, but that it has previously advised that it has appointed advisors (defensive advisors) and is willing to engage, but only on offers that represent compelling value for shareholders. Watch this space?

Moreton Resources (MRV) announced a successful resolution between itself and the Department of Environment and Science (DES). The DES had recently popped up seeking a much bigger (than originally agreed) Financial Assurance Bond on a reassessment of the project (which is very close to production).  Such was the size of this bond, it put the entire company in jeopardy (in our opinion).  Fortunately, the DES upon reflection has decided upon successful collaboration for a bond that is much smaller, and allows the key Granite Belt project to move forward with confidence.  This is a very unique situation (Granite Belt is the first ever project taken back from the Queensland Abandon Mines department) and as such potential for hiccups like this is possible.  It is great however to see common sense prevail, particularly due to the overwhelmingly positive benefits this project is having and will continue to have on the Township and community of Texas, Queensland.