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Friday, 25 March 2016

Anchor Resources Limited

This is for information only. I am not spending too much time on this as it is already listed.

Anchor Resources Limited ("Anchor Resources" or the "Company") placed out 28.8m shares at $0.25 each. The market cap is ~$69.9m based on the IPO price.

The Company is engaged in the business of exploration, mining and production of gold for sale in Malaysia. It is headquartered in Malaysia with concession rights to the Lubuk Mandi Mine and the Bukit Panji Property in Terengganu.

Competitive Strengths (per the prospectus)

Prospects (per the prospectus)

Future Plans (per the prospectus)

My Views

I was pretty surprised to read about the Company's listing in March. Even the more promising Deskera postponed its listing due to poor market sentiments. The share price tumbled from 25 cents at launch to 14.3 cents yesterday, a whopping drop of 42.8%! I pity the investors who took the shares (if they are not the friends and family) of Anchor Resources.

Gold price has seen a short rebound in 2016 when the global market sentiments took a whammy. I am not sure if the gold price has bottomed out but i am not a mining company fan.

One of the closet competitor was CNMC Goldmine which i blog about back in 2011. The post is here. Since its IPO, CNMC Goldmine has turned around and has made a profit from 2012 onwards. It made a profit of S$14.6m in 2015 and as of yesterday, it was trading at a PE of 5.86x and a price to book of around 1.87x. 

Similar to CNMC when it first came to market, Anchor Resources is still loss making and the losses has ballooned from RM6.8m for FY2014 to a loss of around RM12.6m for 1H 2015. The NAV per share is 5.82 cents versus the IPO price of 25 cents. That translates into a price to book of 4.3x! 

I would likely have given it a zero chilli since readers who have an interest in gold mining companies are better off buying the share of CNMC Goldmine. 

Happy Gold mining

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