Ghost Bites (Alphamin | Distell | MultiChoice | Pan African Resources | Stefanutti Stocks)

Drilling update at Alphamin

The good news from Mpama South continues

Drilling updates are always 95% geology, 5% finance. I focus on the 5%, usually found in the management commentary on the results.

The Mpama South project is an important part of Alphamin’s long-term growth story, so it’s encouraging to note that the latest drilling campaign has increased the indicated resource and identified significant additional resource growth potential because of the nature of the resource.

Construction of the Mpama South Mine is progressing according to plan. Once completed, Alphamin’s annual contained tin production will increase from 4% of the world’s mined tin to 6.6%.

Distell: patience still needed

The Competition Tribunal ruling remains outstanding

The champagne can’t be popped just yet. The Heinekens need to stay in the fridge for a little bit longer. Distell has had to delay any updates on the transaction with Heineken because the Competition Tribunal hasn’t released its ruling yet.

The hearings were held from 18 to 24 January 2023. That was only a few weeks ago, so I’m not overly surprised that Distell’s self-imposed deadline wasn’t met. The company will update the market once the ruling is released.

French connection

The stake in MultiChoice continues to be built…

If you’ve been following MultiChoice closely in recent times, you’ll know that French media outfit Groupe Canal+ has been building up a substantial stake. Given the legal limitation on voting rights for a foreign company in a local broadcaster (capped at 20%), the additional shares are purely for economic value rather than voting influence.

Still, the French group now owns 30.27% of MultiChoice. They can only get to 35% before triggering a mandatory offer and I have no idea how that would ever work out based on the voting limitation.

The African assets are a different story. It’s not impossible that Canal+ is looking to do something in Africa with MultiChoice, with this stake as a way to bring strategic alignment between the parties.

Stay tuned! (sorry – I couldn’t resist)

Pan African Resources cools off

There’s been a drop in production and the average price of gold sold

Pan African Resources has released a trading statement for the six months to December. HEPS went firmly in the wrong direction, down by between 31% and 41%.

The market knew this was coming, as the company had released an operational update for this period back in December. In that update, the production challenges at Barberton Mines were discussed, with the company hoping for an improvement in the second half of the financial year.

Although production is down 15.6% year-on-year, the company reminds shareholders that the comparable period was a record for production levels.

To add insult to injury, the average US$ gold price received decreased by 4.4%. The company reports in US dollars, so the falling rand wasn’t as flattering for this result as it was for many other mining companies.

Schwegmanns. Schwegmanns everywhere.

What is brewing at Stefanutti Stocks?

To help investors keep an eye on significant changes in a shareholder register, the Companies Act requires a company to disclose shareholding changes under certain circumstances.

In this case, Stefanutti Stocks disclosed that the register is now swarming with the Schwegmann family. MJ Schwegmann now owns 8.1% in the company, up from 6.6%. J Schwegmann holds 1.3% and HF Schwegmann holds 1.1%. The Windsor Drive Property Trust now owns 4.4% as well and it’s not clear from the announcement whether this trust is related to the family.

A quick search on Google reveals that the Managing Director of the Building Business Unit at Stefanutti Stocks is Howard Schwegmann. It’s hard to believe that this is a coincidence, so this is essentially more buying by insiders at Stefanutti. I included it here rather than under director dealings because these parties aren’t directors of the listed company.

Little Bites:

• Director dealings:
  • In addition to the buying by the Schwegmanns, there was a director of a subsidiary buying shares in Stefanutti Stocks. With a purchase of R66k, this adds to the recent spate of insider buying.

• Acsion Limited is currently trading under cautionary because the company is considering a cash offer to shareholders and delisting. This isn’t stopping them from doing deals, with news of the acquisition of an unoccupied industrial property in Greece for €9.2 million. The property was acquired on auction from a company that was liquidated, with Acsion managing to pay the reserve price. This is a significant discount to replacement cost. Discount or not, it seems that the price was in line with the value of the company, so it’s not obvious what the appeal would be of a random property in Greece. Diversification for the sake of diversification?

• As part of the significant recent management changes at Sygnia, a new Financial Director has now been appointed. Carmen Le Grange comes to the group with substantial prior experience at PricewaterhouseCoopers and Denel.

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