News & Analysis

Emerging Metals Ltd (EML: AIM) review and analysis

By PSQ Analytics

Emerging Metals Limited (EML) is focused on investing in metals and bulk commodities where there is an anticipated imbalance in supply and demand.

- Initial Investment: The company’s initial investment was the Tsumeb Slag Stockpiles Project in Namibia, where Emerging Metals is working to potentially extract germanium, zinc and gallium.

- Diversification: More recently, Emerging Metals diversified its exposure by acquiring an interest in a company focused on the development of the recently discovered Rossing South Uranium Project in Namibia. The value of this investment increased 246% to GBP 34.7 mn in the 12 months ended 30 September 2009.

- Acquisition plans: The company plans to acquire strategic stakes in publicly traded companies that have a focus on investment metals in addition to pursuing its strategy of investing in minor metals and minor metal projects.

- Target Metals: The investment metals for which the company plans to target exposure include all metals other than base metals (such as copper and lead) and bulk commodities metals (such as iron, potassium and aluminium).

- Strategy: The company’s exposure to investment metals will be achieved by the purchasing of physical quantities of such commodities for the trading portfolio; the acquisition of additional complementary investment metals projects; and the acquisition of strategic minority stakes in publicly traded companies focused on investment metals.

- Experienced Management: The Directors believe that their experience in mining, acquisitions, accounting and corporate and financial management -- together with the opinion of expert consultants in the evaluation and exploitation of investment metals opportunities -- will enable the company to achieve its objectives.

- Positive Results: For the six-months ended 30/09/09, the company grew equity shareholder funds 52% and current assets 65%. Net profits totalled GBP13.9 mn, versus a loss of GBP0.24 mn in the year-ago period.

Key recent news

24 December 2009: The company announced its interim results for the six-months ended 30 November 2009. Highlights included a net profit versus a prior-period loss. Management expressed optimism about the Kalahari Minerals and Extract Resources investment. According to Co-Chairman Dattels, “Not only is uranium an emerging metal with a very favourable long-term supply-demand outlook, the interests also allow Emerging Metals to leverage its existing platform and operations.”

14 July 2009: The company announced that CEO Mitch Alland stepped down from his position to become a Non- Executive Director. Stephen Dattels and James Mellon have taken on the roles of Executive Co-Chairmen.